Exploration and Production The first onshore well was drilled in 1950

Exploration and Production The first onshore well was drilled in 1950 in the Ras Al Sadr area. but was abandoned. Drilling resumed in 1958 in the Bab area and oil was discovered. Owing to the encouraging results produced by the first four wells drilled, it was decided to develop the Bab field which came on stream in 1962. While the development of the Bab field was underway, work began on the construction of a 113 km 61 cm pipeline to a site at Jebel Dhanna, northwest of the field which was chosen as the most suitable loading terminal. Work on the pipeline and terminal was completed in 1963 and the first cargo of Bab crude was shipped at the end of the year After the discovery of oil in the Bab field and the conclusion of exploratory work, oil was discovered at Bu Hasa in 1962 oil was also discovered in one of four wells drilled in the Asab region Subsequently two extensions of the Asab field were proven, one to the south named Shah, and the other named Sahil to the north. The Asab field came on stream in 1973, after the drilling of five producing wells which were linked to the pipeline system to Jebel Dhanna by a 200 km, 61 cm pipeline from Asab to Habshan. Following the discovery of the Bab and Asab fields, ADPC started to relinquish parts of its original concession to the govemment in 1965 By the end of 1976, the company’s total concessionary area was reduced to around 32,000 km all onshore. During the 1970s, ADPC’s efforts were directed primarily towards the maintenance of the total productive capacity of the three main onshore fields Bab, Bu Hasa and Asab which reached 1.28 million barrels per day(mbpd) in 1973-74 Main Onshore Oil Fields: Bab: This field was discovered in 1953 and by 1958 its potential had been established. The Bab field is located 80 km southwest of Abu Dhabi city.

The field is 45 km long wide and has an area of about 120 km It produces a high quality 39 40o API crude. In 1974 its average rate of production was already 100,000 barrels per day(bpd) and its production capacity was subsequently increased.

ABu Hasa: This field, which lies some 80 km southwest of Bab and 160 km southwest of Abu Dhabi city was discovered 1962. The field is 35 km long and 19 km wide. Work on its development began at the beginning of 1964 and in 1965 it was connected to the export terminal at Jebel Dhanna. By 1974, Bu Hasa was producing 500,000 bpd from 37 wells whose production rates varied between 6,500 and 40,000 bpd. Asab: This field, which lies 225 km south of Abu Dhabi city was discovered in 1965 and development began during the second half of 1971. Initial production at the beginning of 1974 was 460,000 bpd from 28 producing wells. Asab field is 25 km long, 10 km wide and has a surface area of 250 km3. It produces a high quality 40° API crude Initial offshore Exploration and Production Intensive offshore exploration in Abu Dhabi started in 1953 when a 65-year exploration and production concession was granted by Sheikh Shakhbut to the Darcy oil Exploration Company Ltd. The concession only covered Abu Dhabi’s marine territory, including all submerged lands over which Abu Dhabi exercised sovereignty except for the territorial waters and islands already covered by the PDOTC)- later to become the concession Abu Dhabi Marine Areas Limited(ADMA) was established on May 18, 1954. Initially, two-thirds of ADMA was owned by BP and one-third by CFP, and the Darcy concession was transferred to it on March 22, 1955. Later, in 1972, BP sold 45 percent of its shares in ADMA to the Japan oil Development Company[28] wel les Zak me disc terr fie  Pet the this  rel Jap dril.
As a result of various survey tests. ADMA was successful in locating several promising geologic structures. The first offshore well was drilled in 1958 on the crest of the Umm Shaif structure, around 97 kilometers from the mainland and in a water depth of 18.3 meters.

The well produced 40° API oil in one limestone zone and natural gas in another. Because of the company’s belief that the Zakum structure was less important than Umm Shaif, the drilling of its first well a zakum was delayed until April 1963. After drilling down to 3558.8 meters, oil was discovered in the a zone and gas in the Thamam Araej zone. In further exploratory drilling between 1962 and 1964. ADMA discovered the small Bundle field on the Qatar-Abu Dhabi territorial waters boundary. ADMA then discovered a number of new but relatively small fields, including the Abu Al Bukhoosh field north of Umm Shaifon the boundary with Inan. Following demarcation of the offshore areas between Abu Dhabi and Qatar in 1970, the Bunduq company was established with a shareholding of one-third each by BP, CFP and the United Petroleum Development of Japan group to develop and operate the Bunduq field which came on stream in 1976. Revenues from this field, which produced 20,000 bpd in 1977. have been shared equally between Abu Dhabi and Qatar. Subsequently, another company, Total Abu Al Bukhoosh, was established to develop and operate the Abu Al Bukhoosh field which came on stream in 1974. On December 6, 1967, a 45-year offshore concession was granted to Abu Dhabi Oil Co. Japan Ltd. ADOCo in an area relinquished by ADMA. The company is owned by a consortium of Japanese companies. On May 4, 1969 the company commenced drilling its first well on the Mubarraz structure and struck 33eAPI oil in the Thamama formation with a production rate of 3,000 bpd.

PETROLEUM EXPERIENCE for A. Dilan

PETROLEUM EXPERIENCE for A. Dilan become increasingly significant in the last fifteen years” H remarked that the region’s oil reserves were estimated, in n at percent of the world’s oil reserves, adding: “Not only estimated reserves, however but also in actual production Middle East has emerged in the last dozen years as an factor in the world oil markets.” He concludes his remarks by stating: “Since 1950 the Middle East has become the mai single supplier of oil in the international market. Similarly, Stephen Longrigg, in his authoritative book o wliddle East. Its Discovery and Development, stresses the signifi in the late 1960s of oil reserves and production in the M by stating: “In the matter of proved reserves the re unshakably its dominating position; it possesses more than 60 of the world’s discovered and available stocks.”

He conclude”The main task of providing the world with the next century’s demand for energy, that is, for fuel, seems therefore ineluctably to bel the Middle Eastern Oilfields Proved oil reserves are by far the greatest in the world, oil containing structures extraordinarily large 8 and productive individual and average production per w remarkably high The continued importance of Middle Eastern oil reserves production throughout the twentieth century and early t first century, is illustrated in Tables 1.3 and 1.4, both publish by OPEC. Table 1.3 shows world proven crude oil reserves region(1970-2005), while Table 1.4 shows world crude production by region for the same period.

Both tables testin the ongoing importance of the Middle East in terms of reserves and production. The emirate of Abu Dhabi contint be one of the major players in the region’s petroleum indusn.
The Rise of National Oil Companies in the Middle East’6 National oil companies in the producing countries of the Middle East were created in order to meet the aspirations of those countries for”permanent sovereignty over their national resources; to provide them with an appropriate instrument for securing more direct national involvement in their petroleum industries; and as a reaction to the dominant position of the Majors under the old-style concessions When the underdeveloped countries of the Middle East gained or consolidated their political independence in the post-second World War period, their economic independence remained incomplete. It was clear to these states that without economic independence a comprehensive plan for economic development based on their natural resources could not be implemented Regarding the exploitation of their main natural resource, petroleum the source of 60-95 percent of the revenues of each country these states realized that this field was fully dominated and controlled by foreign concessionaires operating under the old-style concession agreements. UN Resolutions on Permanent Sovereignty Underdeveloped countries’ desire for economic independence, coupled with their frustration with the major oil concessions(and similar forms of agreements covering other national resources in some countries) prompted these countries to raise the issue of permanent sovereignty over natural resources at the United Nations as early as 1952. “The United Nations was asked to play a major role in helping developing countries to attain their economic independence.

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THE PETROLEUM INDUSTRY IN ABU DHABI Subsequent Takeovers in Some Countries of the Region

 

THE GRowTH or THE PETROLEUM INDUSTRY IN ABU DHABI

THE GRowTH or THE PETROLEUM INDUSTRY IN ABU DHABI

The Kuwait National Petroleum Company(KNPC) was established in 1960; the General Petroleum and Mineral Organization(PETROMIN) was established in Saudi Arabia in 1962; and the Iraq National Company was established in 1965. The emirate of Abu Dhabi would wait until November 1971 to establish its Abu Dhabi National Oil Company(ADNOC) Nationalization of the Oil Industry in the Middle East Al Chalibi writes: The attempt at nationalization made by the Mossadegh Government in Iran in the early fifties was the first world event which, despite its failure, had a far-reaching political impact on the concession system and which led to its first shake-up In Algeria some independent US companies holding small concessions were seized by the government in 1967, and in December 1971 Libya nationalized the British Petroleum(BP) share in the joint venture with Bunker Hunt. Al Chalibi continues: However, the successful radical experiment in nationalization which completely reversed oil relationships in the Middle East was the nationalization by the Iraqi government of IPC(Iraq Petroleum Company Ltd., covering the northern fields) in th summer of 1972, followed by the nationalization of the Basrah Petroleum Company(covering the southern fields) whi in turn led by 1975 to total nationalization of all Inaqi oil New Investors in the Oil Industry of the Middle East One of the major developments in the postwar period was the appearance on the international scene of oil companies outside the Majors and their entry to the oil industry in the producing countries.

The Italian national oil company, Enter Nationalize ldrocarburi (ENI) was the pioneer in this respect, followed by the French Company Enterprise des Researcher et activities Petrologist(ERAP) and the Japanese Petroleum Trading Company.
These companies concluded agreements with the governments certain producing countries that were more favorable to tho countries, in the form of joint ventures and serv contracts subseq A number of American independent oil companies, like occidenta and Pan American, also entered the industry. The Arab particip the are operati and Gas Directory 2005 notes: Kuw The entry of these new investors into regions dominated by the Cartel created a new situation that fed national aspirations to be rid of the companies’ control and to resort to taken began independent companies for securing technological expertise operati crude oil marketing outlets and capital needs to meet investmen but wh Amino risks Star of its Participation in Existing Concessions the Q The concept of participation of the host countries in existing Shell i concessions gained increasing support among the major oil operatic producing countries in the 1960s and was soon to receive the produc blessing of the newly established forum of the oil produce In S OPEC. The first formal approbation of OPEC came in 1968. L Aramce in September 1971, OPEC called on members to establish negotiations to achieve effective participation.” Negotiati effectively began in May 1972 between the producers(as a group) and the and a group of the oil companies, leading to the General Agreement assets 5, 19 exploit on Participation which was signed in Riyadh on October lt was initially signed by Saudi Arabia and Abu Dhabi, followed pursue by Qatar and Kuwait. concern In view of the importance of participation which repr Arabia a radical change in the oil industry of the Middle East-the su to Dh feature will be dealt with later in some detail, outlining its main upstream and the practical manner in which it has been implemented in t Abu Dhabi oil industry.

Subsequent Changes in the Ownership and Control of the Oil Industry

Subsequent Changes in the Ownership and Control of the Oil Industry

The relationships between the producing countries of the region and the international oil companies,  under the traditional oil concession system,  underwent a series of changes in the 1950s,  1960s and 1970s.  These successive changes led finally to the collapse of the traditional concession system and ultimately to state control over the oil industries in producing countries.  In his excellent study entitled OPEC and the International Oil Industry:  A Changing Structure,  Fadhil Al Chalabi describes this process of structural change in the Middle East oil industry:  This system of complete domination by the cartel of upstream investment and extraction operations lasted a long time and effectively remained fully operational until the early seventies.  The developments which led eventually to the total collapse of the whole system,  involved the radical changes of the last seven years,  which brought about a complete reversal in oil investment relationships and eventually the replacement of the foreign companies in the wnership and management of the oil industry by the governments of the producing countries.

The main factors,  developments and events behind this radical change in the relationships between international oil companies and the producing countries of the Middle East were:  UN Resolutions on Permanent Sovereignty over National Resources The most important of these resolutions was UN General Assembly(GA)  Resolution No.  2158 of 1966,  which”advised”  host countries to exercise their permanent sovereignty,  and to accelerate acquisition of full control over production operations as well as management and marketing.  These resolutions provided considerable political and moral support to the growing complaints and claims made by Middle Eastern oil-producing countries.

The main objectives of this institution when it established was we to defend the legitimate common interests of its members and present those members as a unified front of producers in their interaction with foreign oil companies.  OPEC provided the members with collective bargaining power.  In a few years it became a strong,  unified force for advancing governmental aspirations wi tangible achievements to its credit:  it successfully resisted any lowering of the posted prices of crude oil affected many substantial changes in favor of the producing countries in terms of the fiscal regime applicable to oil operations and prompted some improvements in the structure of the oil industry.  OPEC played a prominent role in introducing the principle of state”participation’  in the industry and in incorporating it into the concession agreements of its member states.  The Establishment of National Oil Companies The establishment of national oil companies in certain countries o the Middle East was a significant step towards effective state participation in their respective oil industries.  According to Al Chalibi:  Perhaps the most significant development which contributed to the shake-up of the concession system,  and which played a great role later on in radically changing the structure of the industry,  was the growing trend in the producing countries towards the establishment to be the oil companies.  These were designed from the beginning instruments through which the state could exercise its rights over national resources.  The first national oil company in the Middle East was the National Iranian oil Company (NIOC),  which was esta during the dramatic nationalization of Iranian oil in 1951 by the government of Prime Minister Mohammed Mossadegh.

The Growth of the Petroleum Industry in Abu Dhabi he petroleum industry in the UAE

The Growth of the Petroleum Industry in Abu Dhabi he petroleum industry in the UAE is an integral part of the oil industry in the Middle East.  Like the other major oil-producing countries in the region the UAE is a member of the Organization of the Petroleum Exporting Countries(oPEC),  and like the other Arab oil producers it is also a member of the Organization of Arab Petroleum Exporting Countries(OAPEC).  The UAE is affected in its policies,  practices and activities by the objectives,  polices and decisions of both of these organizations.  It is a member of the Gulf Cooperation Council(GCC)  which also includes Saudi Arabia,  Kuwait,  Bahrain,  Qatar and Oman and works towards consolidating the relationships between member countries and coordinating their policies and positions in a variety of different fields(political,  economic,  social,  cultural,  etc.).  Like the other players in the Middle East oil industry,  the UAE has been affected,  in terms of the rise and development of its national oil industry,  by the same circumstances and events as the other producers of the Middle East and has undergone a similar evolution.  It is therefore appropriate to begin with a brief description of the growth of the oil industry in the region to serve as an historical background to the study of the Abu Dhabi petroleum industry.

month of the Middle East Industry ntualeum opsna emecueimary agreements teached with concessionary agreements developed in the Middle East the rights and obligations of the concessionaires and governme The terms of the agreements varied from one and even from one agreement to another in the same general they had a number of common features.  the d were granted for extremely long periods(the average despan four main concessions in Iran,  Iraq,  Kuwait and Saudi Arabia g2 years)  without any provision for possible modification.  covered very large areas of the host country(sometimes the territory of the country concerned without specific relinquishment:  before 1950 they provided for the paymem hont government of an extremely low royalty made at a per ton in the Abu Dhabi agreements,  three rupees(75 c ton(about 10 cents per barrel;  and while the concessi company was granted exorbitant privileges and great manager freedom in the development of the concession area,  the host was excluded from any direct participation in the inte decision making process of the operating companies.  Finally,  under the anneessionary system,  the oil industry had been operated as a whole foreign economic enclave,  almost completely isolated from seators of the national economy.  Tie growing demand for petroleum in industrialized countres ombined with their lack of oil deposits,  stimulated petrolom mporaine inanumber of distant regions.  Several attempts were ma Before die First World War to obtain rights for the use of oil.

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Study of the petroleum experience of the emirate of Abu Dhabi