Abu Dhabi: Abu Dhabi is believed to be in advanced talks to award contracts to international oil companies to develop its onshore oilfields after French energy giant Total was awarded a 10 per cent stake in late January this year, experts said.

A number of Asian and western oil companies are bidding for stakes in the concession after a deal with western oil majors dating back to the 1970s expired in January last year.

In the fray are Royal Dutch Shell, BP, Occidental Petroleum from the US, Statoil from Norway, China National Petroleum Corporation (CNPC), Japan’s Inpex, South Korea’s Korea National Oil Corporation and Italy’s ENI.

Total won a 10 per cent stake to develop land based oilfields in January. The company is said to have paid $2.2 billion to win the contract.

Other bidding companies were asked to match the amount paid by Total to win the contracts.

Alex Schindelar, Dubai bureau chief of Energy Intelligence said this is an extremely important decision for Abu Dhabi and they will take as much time as they need to get it right.

“There is no official timetable of when a decision will be reached. It is strategic for Abu Dhabi as the company selected would be in the country for 40 years,” he said.

“Abu Dhabi needs to decide whether it will accommodate the requests by international oil companies to adjust the commercial terms, which several, if not all of the bidders have said will result in rates of return that are far below acceptable levels, even for low-cost, low-risk reserves like in Abu Dhabi.”

According to him, BP and Royal Dutch Shell have requested an adjustment to the terms in order to make the $2.2 billion bonus more palatable.

When contacted BP refused to comment while Royal Dutch Shell said it is keen to continue its long cooperation and partnership with Abu Dhabi and the Adnoc Group of companies.

Meanwhile, a report in Korea Herald said Korean company GS Energy is seeking to buy a five per cent stake in the Abu Dhabi Company for Onshore Oil Operations, (Adco), a subsidiary of Adnoc at an estimated cost of $1.1 billion.

The report said the if GS Energy secures a 5 per cent stake, the company’s daily crude oil production capacity will jump to 90,000 barrels, surpassing the 77,000 barrels via overseas oilfields by SK Innovation, the nation’s top crude oil producer.

Another Korean company Korea National Oil Corporation is also in the fray to win the bid.

The UAE, which holds about six per cent of global oil reserves is intending to increase the production capacity to 3.5 million barrels of oil per day by 2017 from the present capacity of around 2.8 million barrels of oil per day.

The country is not planning to reduce its investment in the energy sector despite drop in oil prices, which went down by more than 50 per cent since June last year.