Historic shift as Abu Dhabi looks to Asia for oil concession

Gulf emirate Abu Dhabi seems likely to choose Asian firms when it renews a decades-old major oil concession, sources and analysts said, in a historic shift for the global energy market.
Powerful Western companies have dominated the Middle East oil industry for nearly a century but are facing increasing competition from energy-hungry Asia.
Now Asia appears set to win its first major concession in the Middle East after the expiry of a World War II-era contract to exploit Abu Dhabi's main onshore oil fields.
"The Far East is 'the' market for Gulf oil and energy-based products like chemicals," Jean-Francois Seznec, a Georgetown University professor and oil expert, told AFP.

Experts believe it is inevitable that, after seeing huge boosts in oil exports to Asia, Middle East producers like the United Arab Emirates will seek to attract Asian companies as production partners as well.
This will "help the UAE secure a market share in the Far East at this time of ample supplies and relatively weak demand," Seznec said.

Industry sources tell AFP that global giant China National Petroleum Corporation (CNPC) is the top contender for the Abu Dhabi bid, along with firms from South Korea and Japan.
The 75-year-old concession ran out in January and state-owned Abu Dhabi National Oil Company (ADNOC) is reviewing bids from nine international majors to award new long-term production-sharing agreements.

The ultimate decision will be taken by the Abu Dhabi Supreme Petroleum Council, the emirate's highest decision-making body on energy issues.
An industry source said a decision is expected by the end of the year or early 2015, barring any last-minute hurdles.
The previous concession, granted in January 1939, was operated by Western companies ExxonMobil, Royal Dutch Shell, BP and Total, with 9.5 per cent each, in addition to Partex Oil and Gas with two percent.
The Abu Dhabi Company for Onshore Oil Operations (ADCO), which currently operates production, had the remaining 60 percent.
The new concession will be for 40 years, local media reported and the goal is to raise output from the current 1.5 million barrels per day to 1.8 million by 2017.

As well as China's CNPC, the Korean National Oil Corporation (KNOC) and Japan's Inpex Corporation are among the nine companies bidding for the concession.
The former partners -- US giant ExxonMobil, Anglo-Dutch Shell, Britain's BP and Total of France -- are also bidding, along with newcomers Statoil of Norway and Russia's Rosneft.
"There is certainly a natural fit for Asian oil companies interested in these concessions," Victor Shum, vice president at IHS Energy Insight, told AFP.
The Middle East is the primary supplier of crude oil to Asian nations and Asia's importance in the energy market has risen in recent years amid fundamental changes in production, exports and prices, he said.