Oil Exploration Developments: IOC and BPCL Subsidiary Awarded Abu Dhabi Production Concession

Oil Exploration and Security

Oil exploration initiatives are shaping the future of energy as the wholly owned subsidiary of Bharat Petroleum Corp. and Indian Oil Corp. have secured a crucial production concession in Abu Dhabi. The Supreme Council for Financial and Economic Affairs awarded this concession, according to an exchange filing by BPCL.

Key Details of the Concession

Bharat PetroResources Ltd. (BPRL), in partnership with IOC, has established a 50:50 special purpose vehicle named Urja Bharat Pte. This award follows a successful exploration phase that commenced in March 2019, involving an investment nearing $164 million. The concession agreement encompasses up to 6,162 square kilometres, where UBPL has been granted full concession rights.

• Initial exploration in Onshore Block 1, located in the 38 sq km Ruwais area, has revealed significant positive outcomes.
• Conventional undeveloped oil and gas resources were identified during this exploration.

Impact on Financial Markets

This marks the first full production concession awarded to an international company from Abu Dhabi's exploration blocks bid rounds. Consequently, this production concession provides UBPL with equity oil rights, supporting India's energy security initiatives.

Stock Market Reactions

In the market, shares of BPCL concluded at 1.65% lower at Rs 340.25 per share, reflecting a broader market trend with a 0.49% decline in the NSE Nifty 50 index. On the year-to-date basis, BPCL shares have appreciated by 87.08%, with a 51% increase over the past year.

On the other hand, IOC shares ended at 3.31% lower at Rs 169.74 per share, also demonstrating growth with a 78.30% increase year-to-date and a 30.72% rise over the last year.