German oil and gas producer Wintershall says Abu Dhabi a platform for growth in Arabian Gulf

The company expects the Arabian Gulf will account for 50,000 barrels per day for it within six years.

Rainer Seele, the chief executive of Wintershall, said its Abu Dhabi office will increase in size as the region gains more importance. Uwe Zucchi / EPA

Germany's biggest oil and gas producer plans to use Abu Dhabi as a launching point for expansion in the Arabian Gulf, a region it expects to become a key pillar of its business by 2020.

Wintershall forecasts that the oil-rich region will produce 50,000 barrels a day for it in six years’ time to put it on par with its other core regions, Rainer Seele, chief executive at Wintershall, said at a conference at the company’s headquarters in Kassel yesterday.

So far the company has focused its efforts on Europe, Russia, North Africa and South America, but it is expected that its Abu Dhabi office will increase in size as the region gains more importance for Wintershall, Mr Seele said.

Wintershall will start to drill in Abu Dhabi this year at the Shuwaihat gas and condensate field, which it is appraising with its Austrian partner OMV. Should the search for so-called sour gas and condensate be successful, the two companies will form a concession with Abu Dhabi National Oil Company (Adnoc).

Once the appraisals are completed, Wintershall, which is taking the lead on the project, will be in a better position to estimate hiring requirements, Mr Seele said.

Wintershall’s partnership with Abu Dhabi also includes a cooperation agreement with Mubadala that was struck in January to engage in energy projects in the Middle East and North Africa.

“Our partner in Abu Dhabi is Adnoc. With all the opportunities you can find there, Mubadala is an international partner,” Mr Seele said. “We have clearly defined the region [with Mubadala], it’s the Middle East and North Africa. As we speak, there is a huge overlap of interest between Mubadala and Wintershall. We are very much interested in North Africa and Qatar, where Mubadala is already.”

Wintershall is planning to invest €4 billion (Dh20.49bn) globally in the next five years and Abu Dhabi is expected to get the lion’s share of the Middle East spending, the chairman said. He did not give a precise regional breakdown of planned expenditure, except to say that Norway would get half of the total projected investment. He said exact investment in Abu Dhabi, where the lack of rig availability may be a potential bottleneck to future growth, will also depend on fast-changing rig rate prices.

“You really have a shortage of rigs availability. We have to better co-ordinate with the companies so we have a better rig availability in the region, especially if we are going through a growth story in Abu Dhabi,” he said. “We definitely have to think about how we can improve the service infrastructure.”

Wintershall, a unit of the global chemical giant BASF, said that its 2013 net income rose 48 per cent to a record €1.8bn in 2013, the biggest profit in its history even after its oil production in Libya stopped because of political instability.

The company’s sales rose 16 per cent to €14.8bn as oil and gas production reached 132 million barrels of oil equivalent (boe). At the end of 2013, its total crude oil and natural gas deposits totalled 1.5 billion boe, 20 per cent more than in the previous year, it said.

“The good results in 2013 form part of a continuing successful decade in which we have increased oil and gas production by 4 per cent a year on average,” Mr Seele said. “That is more than twice the industry average. In 2015, the company plans to further extend oil and gas production to more than 160 boe.”

The energy company also announced at the media conference in Kassel yesterday that it had signed an agreement with BP to co-operate in North Africa on new and existing projects.

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