The agreement brings together two leading energy producers and harnesses their world-class talent and technologies to unlock value in areas of strategic importance to both companies while reinforcing their existing partnerships across the oil and gas value chain. It also builds on ADNOC’s recently announced sustainability goals, particularly its commitment to decrease its greenhouse gas (GHG) intensity by 25 percent by 2030, enabled by its industry-leading CCUS program.
The framework agreement was signed by His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO and Claudio Descalzi, CEO of Eni.
H.E. Dr. Al Jaber said: “We are pleased to sign this strategic framework agreement with Eni that builds on our successful partnerships across the oil and gas value chain. Importantly, the agreement underscores ADNOC’s targeted approach to value-add partnerships that is enabling us to unlock and maximize value from Abu Dhabi’s substantial hydrocarbon resources as we deliver our 2030 smart growth strategy.
“We look forward to swiftly developing this framework agreement to another new mutually beneficial partnership with Eni as the agreement offers significant potential for exciting and sustainable growth opportunities.”
Under the terms of the agreement, ADNOC and Eni will jointly explore opportunities for collaboration in relation to innovative geomechanical and geochemical workflows for CCUS programs as well as in advanced analysis and modeling of thermally induced fractures in oil and gas reservoirs.
Geomechanics refers to the study of how subsurface rocks deform or fail in response to changes in stress, pressure, and temperature, while geochemistry relates to the study of the chemical composition of the earth’s crust. Both geomechanics and geochemistry relate to the development of CCUS programs.
Descalzi said: “This MoU further demonstrates Eni’s strong commitment to strengthening our important partnership with ADNOC, such an important actor, and generating positive impact across our value chain. Both companies will collaborate to pursue new mid-term solutions aimed at leading the current energy transition in line with Eni’s decarbonization strategy aimed to achieve net zero emissions in its upstream business by 2030 and ADNOC’s recently announced sustainability goals. This is a holistic collaboration that will further strengthen the alliance between the two companies by designing technological trajectories for the evolution and transformation of the upstream and downstream businesses.”
The two partners also agreed to assess additional strategic opportunities for collaboration in R&D that can potentially optimize performance, drive efficiencies and unlock greater value for both companies. This potential for collaboration in R&D closely aligns with ADNOC’s strategy to drive innovation and seek new advanced technologies to enable it to maximize value from every barrel of oil it produces and deliver the greatest possible returns to the United Arab Emirates (UAE).
The potential for collaboration in CCUS by ADNOC and Eni complements ADNOC’s CCUS program which has seen the company establish the Al Reyadah facility, the first commercial-scale CCUS facility in the Middle East. Currently, the facility has the capacity to capture 800,000 tonnes of carbon dioxide (CO2) annually and ADNOC plans to expand the capacity of this program six-fold by capturing CO2 from its own gas plants, with the aim of reaching 5 million tonnes of CO2 every year by 2030 – the equivalent of the annual carbon capture capacity of over 5 million acres of forest.
ADNOC and Eni’s partnership has been growing over the past two years since Eni was awarded a 10 percent stake in the Umm Shaif and Nasr Offshore concession and a 5 percent stake in the Lower Zakum concession in 2018. Both awards marked the first time an Italian energy company was granted concession rights in Abu Dhabi’s oil and gas sector.
ADNOC also awarded Eni a 25 percent stake in its Ghasha offshore ultra-sour gas concession in 2018. And in January 2019, ADNOC awarded two offshore blocks – Offshore 1 and Offshore 2 – to a consortium led by Eni and Thailand’s PTT Exploration and Production Company Limited (PTTEP) as part of Abu Dhabi’s highly successful debut competitive exploration and production bid round.
In the downstream, ADNOC struck a strategic equity partnership with Eni and Austria’s OMV in its refining business in 2019. Under the terms of the deal, Eni and OMV acquired 20 percent and 15 percent shares respectively in ADNOC Refining. The deal also covered a new trading joint venture, ADNOC Global Trading, established by the three partners.
ADNOC is one of the world’s leading diversified energy and petrochemicals groups with a daily output of about 3 million barrels of oil and 10.5 billion cubic feet of natural gas. With 14 specialist subsidiary and joint venture companies, ADNOC is a primary catalyst for the UAE’s growth and diversification.
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