BP has signed an agreement with the Supreme Petroleum Council of the Emirate of Abu Dhabi and the Abu Dhabi National Oil Company (ADNOC) that grants BP a 10% interest in Abu Dhabi’s ADCO onshore oil concession, which has a life of 40 years.

In addition to the interest in the ADCO concession, BP becomes a 10% shareholder in ADCO, the Abu Dhabi Company for Onshore Petroleum Operations Limited, which operates the concession. The agreement includes BP becoming asset leader for the Bab asset group within the concession.

In connection with the transaction, BP p.l.c. has agreed to issue new ordinary shares representing approximately 2% of BP’s issued share capital (excluding treasury shares), to be held on behalf of the Abu Dhabi Government. The issuance of the new ordinary shares is subject to certain listing requirements and is expected to be completed shortly.

The agreement was signed in Abu Dhabi by Bob Dudley, BP Group Chief Executive, and H.E Dr. Sultan Ahmed Al Jaber, ADNOC Group Chief Executive Officer, and member of the Supreme Petroleum Council of the Emirate of Abu Dhabi.

Bob Dudley says, “Today’s agreement marks a new phase in BP’s long relationship with Abu Dhabi and, in particular, ADNOC. BP will work closely with ADNOC to realise the full potential of these world-class resources and I welcome Abu Dhabi as an important investor in BP. This agreement will provide BP with long-term access to significant and competitive resources that we already understand very well. We will bring our people, cutting-edge technology and experience of managing mature giant fields around the world to help maximise recovery from these assets.”

BP becomes a 10% shareholder of ADCO and the concession alongside Total of France, INPEX Corporation of Japan, and GS Energy of South Korea who hold interests of 10%, 5% and 3% respectively. ADNOC continues to look for partners to take up the remaining 12% stake of the 40% earmarked for foreign partners.

H.E Dr Al Jaber says, “BP has long been a strategic partner to Abu Dhabi and ADNOC. Alongside our other partners, BP has played an important role in the development of our oil and gas assets. This agreement marks a milestone in our efforts to forge new partnership models that bring technology, expertise and financing aimed at maximising the value of our resources and supporting the transfer of knowledge. We look forward to working with value-add partners that share a mutual interest in advancing the industry and applying innovative technology that improves operational efficiency and recovery.”

The ADCO concession, including the Bab, Bu Hasa, Shah and Asab fields, has total resources of between 20-30 billion barrels of oil equivalent over the term of the concession. The overall production in 2016 is expected to average around 1.66 million barrels of oil per day (bpd). The concession, put in place in January 2015, is valid until the end of 2054.

Brian Gilvary, BP chief financial officer, further comments, “We have worked closely with ADNOC to structure an agreement that is attractive and strategic for both parties. It is consistent with our aim of delivering competitive returns from a portfolio with a balance of resource types, geographies and resilient pricing models. The lower cost characteristics of this already-producing conventional onshore oil development will be accretive to earnings and cash flow, while providing BP with another building block of long-term growth.”

In support of its interest in the ADCO concession and asset leadership of the Bab assets, BP expects to second up to 50 technical staff to ADCO, bringing technology, expertise and experience to support the ongoing efficient operation and development of the assets.

BP has been present in Abu Dhabi since 1939. Since the 1970s, BP held a 9.5% interest in the ADCO onshore concession that expired in late 2014. It also holds a 14.67% interest in the offshore concession and ADMA-OPCO which operates this concession, and 10% interests in both the Abu Dhabi Gas Liquefaction Company (ADGAS) and the National Gas Shipping Company (NGSCO). BP’s net share of oil and gas production from Abu Dhabi is currently around 95,000 barrels of oil a day and is expected now to grow to approximately 260,000 barrels of oil a day in 2017.