We will simplify our set up, facilitate enhanced operational performance and deliver strategic benefits by establishing a scalable operating model that could be used for any future offshore concession agreements.

Yaser AL MAZROUEI CEO ABU DHABI MARINE OPERATING COMPANY (ADMA-OPCO) AND ZAKUM DEVELOPMENT COMPANY (ZADCO)

Offshore altogether

June 5, 2017

Yaser Al Mazrouei, CEO of Adma-Opco and Zadco, talks to TOGY about the consolidation of the two companies, the effects of lower oil prices, predictions and goals for new projects, and their effects and outcomes for shareholders.

Adma-Opco operates the Zakum, Umm Shaif, Nasr, Umm Lulu and SARB fields with an industrial base on Das Island. Zadco operates the Upper Zakum, Umm Al Dalkh and Satah fields. The combined companies are targeting significant production increases in order to help meet Abu Dhabi’s goal for 2018 of 3.5 million bopd in production capacity.

• On the search for partners: “We are looking for companies that add value to us and our assets, complement other partners and help optimise overall shareholder return. From a holistic perspective, we want to see added technological, operational and wider strategic value to the ADNOC Group. From the operational viewpoint, we are especially focused on partners that add technological and operational value to the company.”

• On potential projects:
“We have potential in various projects, including Umm Shaif Field and the Zakum field, and the new fields’ potential can definitely be realised once we operate them. We have forecasts of how much we can expect from some of them, but all that will be properly studied and delivered in time, in alignment with the shareholders.”

Al Mazrouei also discussed operational highlights and strategies going forwards. Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with Yaser Al Mazrouei below.

What were the operational highlights for Adma-Opco and Zadco in 2016?
ADNOC has adopted a new operating model that can more quickly execute on our strategic imperatives. For upstream, this means a more profitable business. Against this backdrop, it was critical for us to effectively demonstrate sustained delivery and meet our target to produce some 1.4 million bopd. In addition, we announced the Adma-Opco and Zadco consolidation as part of a plan to join all offshore activities under one umbrella within the ADNOC Group. The step will yield significant financial, operational and strategic benefits.
We are very proud that we sustainably and safely delivered against our targets and plans and operate with zero fatalities and zero oil spills. We are progressing on schedule with all projects and contracts and addressed the challenges the current market environment poses without delaying our project progress. Nor did we stop our drilling activities or the progress of our facilities.
Different projects have different timeframes. For example, we have the SARB field, which should start the commissioning process by the end of December. It will build up after that in 2018.

How do you think the Adma-Opco – Zadco consolidation will affect operations?
I look at our people and the operations associated, and everybody is very committed. We have an excellent operational philosophy, standards and safety. With the consolidation we will improve further. Instead of having two different entities operating in the same environment, we will simplify our set up, facilitate enhanced operational performance and deliver strategic benefits by establishing a scalable operating model that could be used for any future offshore concession agreements.
The consolidation is expected to be completed around year end. Abu Dhabi’s current offshore concessions in Adma-Opco and Zadco will then be operated by one company. It will be easier and more focused for all parties involved and dealing with the offshore sites. Even from a processing point of view, it is going to be more efficient, both internally and externally.

 

What is going to happen after the concession expires in 2018?
We remain focused on working effectively with our shareholders until the last day to ensure effective operations and maximised value. What happens beyond that will be determined by ADNOC and the SPC [Supreme Petroleum Council].

Whom would you like as a partner or a shareholder after 2018?
We are looking for companies that add value to us and our assets, complement other partners and help optimise overall shareholder return. From a holistic perspective, we want to see added technological, operational and wider strategic value to the ADNOC Group. From the operational viewpoint, we are especially focused on partners that add technological and operational value to the company.

What are your aims, how do you want to lead this company through this consolidation, and what projects will you prioritise?
Starting with the projects, they all have their schedules and commitments and we have integrated project management teams working on our and on the contractors’ side with close follow-up and continuous communication between shareholders so they are aware and up to date.
Our commitment clearly is to deliver our projects on time, because we definitely contribute to the production build-up. Every project has its own time schedule that we are committed to meet, in line with the standards set and the estimated cost that we planned for.
In terms of production for Adma-Opco and Zadco, we are around 1.4 million bopd. For ADNOC Group, the target is a production capacity of 3.5 million bopd over the course of 2018, and our portion of that is the wider range of 1.7 million-1.8 million bopd.
We also have aspirations to work with our shareholders and be flexible if a higher production capacity can leverage potential future market upside. That will require a collaborative effort.

What projects have potential for increased output?
We have potential in various projects, including Umm Shaif Field and the Zakum field, and the new fields’ potential can definitely be realised once we operate them. We have forecasts of how much we can expect from some of them, but all that will be properly studied and delivered in time, in alignment with the shareholders.

What is your development strategy for 2017?
Our current strategic focus is to finalise the consolidation process, turn ourselves into a single offshore operating company and drive efficiency to maximise value to our shareholders. The sooner we do that, the sooner we enable enhanced value.
As I said, our committed target will go from 1.4 million bopd to the wider range of 1.7-1.8 million bopd by 2018. Part of our commitment is to significantly contribute to the 2018 total production capacity of 3.5 million bopd across ADNOC Group.
The aim for the consolidation is to deliver our current and future production in a more efficient way through improving performance, maximising the utilisation of resources, making sure we effectively develop talent and deliver optimal returns.
It builds back to maximising value to the shareholders. We are not bringing Adma-Opco and Zadco together because of a production increase. Our production target is already set and defined and we are not adding any fields with the consolidation. The focus is on performing in a more efficient and profitable way.

For more information on Adma-Opco and Zadco, including additional details on their merger, see our business intelligence platform, TOGYiN.
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