Indian Firms Buy Stake in UAE Oil Concession

Natural Gas Corp. and two other companies will pay $600 million to pump crude from the Lower Zakum field

- Mahmoud Habboush & Anthony Dipaola

Indian companies have agreed to pay $600 million for a stake in one of Abu Dhabi’s biggest offshore oil concessions, securing a share in the emirate’s crude production for the first time.

State-owned Oil and Natural Gas Corp. and two other Indian companies will take a 10 percent share of the concession to pump crude from the Lower Zakum field, under a 40-year contract in partnership with Abu Dhabi National Oil Co., according to an Adnoc statement. Adnoc signed the deal during a visit of Indian Prime Minister Narendra Modi to the capital of the United Arab Emirates on Feb. 10.

Abu Dhabi, which holds most of the U.A.E.’s oil reserves, is looking for new partners at its offshore fields in the Arabian Gulf as the current production concession for some deposits expires in March. Partners in Abu Dhabi’s fields generally receive an amount of crude oil commensurate with their stakes in return for tax and royalty payments and investment to boost output.