* Exxon pulls out staff, decides not to bid, sources say
* Chinese, Korean and Japanese firms vying for a stake
* Onshore fields produce over half of UAE oil
* UAE leaders consider whether to let in Asian firms
By Rania El Gamal and Stanley Carvalho
ABU DHABI, July 21 Asian and western firms have
bid to help operate the UAE's biggest oilfields after a deal
with oil majors expired this year but the Gulf Arab state is yet
to decide whether to let Asian oil buyers in for the long haul,
A final decision on the winning firms is unlikely before
early 2015 as political leaders in Abu Dhabi, the capital of the
United Arab Emirates, weigh whether to bring in Asian firms or
stick with old partners, industry and diplomatic sources said.
At least one oil major, ExxonMobil, appears to have
decided against bidding, the sources told Reuters.
ExxonMobil, Royal Dutch Shell, Total and
BP - have each held 9.5 percent equity stakes in the Abu
Dhabi Company for Onshore Oil Operations (ADCO) concession since
the 1970s. Portugal's Partex had a 2 percent stake, and the rest
was held by state run Abu Dhabi National Oil Company (ADNOC).
After the deal expired in January, ADNOC took 100 percent of
the concession. Shell, Total and BP have made their new bids,
which are being evaluated by Abu Dhabi, the sources said.
Exxon, however, did not bid for the ADCO concession after it
renegotiated a better deal for the Upper Zakum offshore
oilfield, which it has been operating with ADNOC and Japan's
Inpex since 2006, two sources said.
The U.S. major pulled out its staff from the ADCO fields
earlier this year, a sign that it has dropped out of the race,
"Exxon has pulled its folks out while others kept their
people. (It is) 95-percent (sure) Exxon has decided not to bid,"
one source told Reuters.
"They are going to make what? $2 or $3 dollars a barrel? So
they probably said: 'why have two projects in the UAE?'," the
Exxon said its ADCO concession expired on Jan.10 but
declined to comment about its staff and future plans.
Exxon's exit may improve the chances for the other three
former partners and pave the way for newcomers to join in.
U.S. firm Occidental Petroleum Corp, Italy's ENI
, China National Petroleum Corp. (CNPC), Norway's
Statoil, Japan's Inpex and Korea National Oil Corp have
bid for the new deal, three sources told Reuters.
Rosneft has been invited to bid, but it was not
clear whether Russia's top oil company has submitted an offer,
two industry sources said.
"Abu Dhabi's new partners are expected to be selected in
early 2015. The evaluation process is underway," one industry
The onshore fields produce 1.6 million barrels per day
(bpd), over half UAE's oil output.
The UAE oil minister said in January Abu Dhabi has received
strong interest from international firms to participate in the
ADCO fields with revised terms.
ADNOC did not respond to Reuters emails and calls for
comment. A CNPC official said the Chinese company has bid to
operate the ADCO fields, but he knew no further details.
None of the remaining companies vying to be part of the next
phase of development would comment on the situation.
Western oil majors have partnered Abu Dhabi for decades but
several Asian energy companies are keen to secure stakes in
fields that supply the growing Asian market.
That would offer a chance for UAE to strengthen political
ties with its biggest oil buyers such as China, South Korea and
"The (UAE) leadership is turning eastwards more than
before," said Valérie Marcel of think tank Chatham House.
"We also know that the leadership wants new types of
contracts, which encourage oil companies to invest more of their
technology. These forces push Abu Dhabi towards new partners and
Industry observers say any changes in the concessions would
be made at the highest decision-making body for the oil and gas
industry, the Supreme Petroleum Council. They say there is a
difference in opinion inside the SPC over whether to stick with
western companies, or make room for newcomers from Asia, while
some would like to see ADNOC operating the fields alone.
"At the end of the day it will be the political decision of
the leadership in Abu Dhabi on which company will take what," a
diplomatic source said.
(Addition reporting by Gwladys Fouche in Oslo, Chen Aizhu in
Beijing, Meeyoung Cho in Seoul, Olesya Astakhova in Moscow and
Dmitry Zhdannikov in London; writing by Rania El Gamal; editing
by Keiron Henderson)