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Dec. 6 (Bloomberg) -- Exxon Mobil Corp., the world’s biggest company by market value, expects Abu Dhabi to change the terms for the Persian Gulf emirate’s main oil producing concession when the current agreement expires in 2014, its chief executive officer said.
“The concession structure and terms that served all parties well in the past are just no longer appropriate in today’s environment, both in terms of cost and prices,” Rex Tillerson said today at the World Petroleum Congress in Doha. “Everyone is committed to finding that new structure that allows us to continue to work together.”
Exxon, Royal Dutch Shell Plc and BP Plc produce oil at onshore fields in Abu Dhabi under a concession agreement that dates back to 1939. The fields began commercial production in 1960 and Abu Dhabi’s state-run oil company joined as a partner in the 1970s, forming the current operating venture Abu Dhabi Co. for Onshore Oil Operations, or ADCO. ADCO holds the concession for six main onshore fields until 2014.
The joint venture agreement is “under very active discussion with the national oil company and government of Abu Dhabi,” Tillerson said, without giving further details. Shell’s Chief Executive Officer Peter Voser, also attending the Doha conference, declined to comment on the concession.
Abu Dhabi holds more than 90 percent of crude in the United Arab Emirates, one of the few Middle East states that allow foreign companies to explore for and produce oil within its borders. State-owned Abu Dhabi National Oil Co., or Adnoc, holds 60 percent of ADCO, with the international oil companies Exxon, Shell, BP, Total SA and Partex Oil & Gas holding the rest.
Abu Dhabi is the largest sheikhdom of the United Arab Emirates.
--With assistance from Robert Tuttle and Wael Mahdi in Doha. Editors: Rachel Graham, Randall Hackley
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