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BP Awarded Abu Dhabi Concession as Emirate Gets 2% BP Stake

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The deal replaces one that expired in 2014 that gave BP a 9.5pc stake in the state-owned Abu Dhabi National Oil Company, of which ADCO is a subsidiary.

BP becomes the second Western oil major to renew a 40-year onshore concession in Abu Dhabi after nearly two years of negotiations to improve terms to help operate the United Arab Emirates' biggest oilfields.

The British company said the new shares will be priced at 447 pence a share.

Treasury shares are not taken into consideration in relation to voting at shareholder meetings.

BP will pay Kosmos USD162.0 million on completion, and then carry Kosmos on exploration and appraisal costs of USD221.0 million, plus a further USD533.0 million worth of development costs, which includes the front end engineering and design work.

"BP becomes a 10 percent shareholder in ADCO", ADNOC said in a statement. It is not yet clear whether Abu Dhabi will seek BP board representation.

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In a statement, BP's chief executive Bob Dudley said: "This agreement will provide BP with long-term access to significant and competitive resources that we already understand very well".

French giant Total owns a 10% stake in the Abu Dhabi National Oil Co, INPEX Corp of Japan holds a 5.0% stake and GS Energy of South Korea holds a 3.0% stake. More major oil companies could come in, he said.

"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 overall production in 2016 is expected to average around 1.66 million barrels of oil per day (bpd).

"Today's agreement marks a new phase in BP's long relationship with Abu Dhabi and, in particular, ADNOC". Adco's parent, Adnoc, negotiated the deal that included the BP stake as well as terms for its participation in Adco and operation of Bab, one of the six main oilfields in the concession.

That would put Abu Dhabi among the company's top 10 shareholders and ahead of Kuwait, which owns a 1.7% stake.

The Arabian Gulf deal will dramatically raise BP's share of oil and gas production in the emirate, from 95,000 barrels of oil a day to 260,000 barrels a day next year.

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