ABU DHABI, 4th August, 2023 (WAM) — Abu Dhabi National Oil Company (ADNOC), the State Oil Company of Azerbaijan (SOCAR) and TotalEnergies today announced a strategic transaction that will see ADNOC acquire a 30% equity stake in the Absheron gas and condensate field in the Caspian Sea.
ADNOC’s investment into the Caspian region aims to create a substantial growth position as it enters the international gas market and reinforces the energy partnership between the UAE and Azerbaijan. Financial details of the transaction are not being disclosed.
Upon completion of the transaction, which is subject to customary regulatory approvals, ADNOC will own a 30% participating interest in Absheron, with SOCAR and TotalEnergies holding 35% stakes, respectively.
Entering into a strategic partnership with SOCAR also elevates ADNOC’s long-standing partnership with TotalEnergies, who until now had held a 50% share alongside SOCAR in Absheron.
The partnership will enable ADNOC to build a major footprint in a region with prolific natural resources and significant growth potential, facilitating a route into attractive international growth markets for gas in Europe and Central Asia.
The landmark transaction further solidifies the strategic bilateral energy partnership between the UAE and Azerbaijan. As the world transitions to a low-carbon energy system, natural gas will play a crucial role as a key transition fuel, with this investment further cementing ADNOC’s leading position as a reliable supplier of lower-carbon energy.
The transaction also complements ADNOC’s investment through Masdar to develop 10 GW of renewable energy capacity from solar, onshore and offshore wind, and green hydrogen in collaboration with SOCAR, supporting both nations’ shared energy transition agenda.
Commenting on the transaction, Musabbeh Al Kaabi, Executive Director of Low Carbon Solutions and International Growth at ADNOC, said, “With global gas demand expected to steadily increase over the coming decades, ADNOC will continue to responsibly meet the world’s energy needs by developing and producing natural gas from world-class assets such as Absheron.
“We believe this strategic partnership with SOCAR and TotalEnergies, unlocks the potential of the Caspian region for decades to come and complements a broader energy collaboration between the UAE and Azerbaijan that will accelerate the growth of the global renewable energy sector as both countries take bold steps to transition towards a lower-carbon future.”
SOCAR President Rovshan Najaf said, “Azerbaijan’s favourable investment climate offers conducive conditions for foreign investors in the energy sector. This deal underscores our commitment to strengthening the relations with our partners and reaffirms Azerbaijan’s position as a reliable partner in the energy sector. We are excited to embark on this journey with ADNOC and TotalEnergies, building upon our shared vision and complementary strengths.”
“TotalEnergies is pleased to welcome ADNOC, one of its strategic partners, into the Absheron gas field, where production of the first phase started in early July and which offers a significant further development potential to meet the growing gas demand,” said Nicolas Terraz, President, Exploration & Production at TotalEnergies.
The strategic investment in this world-class natural gas basin and asset base underpins ADNOC’s growth strategy and will leverage its strong track record of successfully and responsibly developing large gas projects to meet growing global demand for lower-carbon energy. The first gas from Absheron was successfully delivered in early July 2023.
As part of their expanding partnership, ADNOC and SOCAR also signed a Memorandum of Understanding that will see both companies evaluate potential areas of collaboration across renewable energy, low-carbon solutions and upstream projects in the UAE, Azerbaijan and internationally.