XRG, a wholly-owned subsidiary of the UAE’s Abu Dhabi National Oil Company (ADNOC), has signed a production sharing contract (PSC) with Malaysian energy giant Petronas and Turkmenistan’s Hazarnebit and Turkmennebit for a block in the Caspian Sea.
Under the terms of the new PSC, XRG will get a 38% stake in Block 1 in the Caspian Sea holding gas and condensate fields. Petronas will have a 57% participating interest as the operator, with Hazarnebit holding the remaining 5%.
As stated by the Malaysian player, a long-term gas sales agreement (GSA) was also signed with the state-owned Turkmengas as part of the transaction.
XRG believes this strategic investment will provide it with immediate volumes for its growing integrated gas portfolio. Furthermore, the acquisition is expected to strengthen the firm’s international gas portfolio and expand its footprint in the Caspian Sea.
XRG President, International Gas, Mohamed Al Aryani , noted: “This agreement marks an important milestone in XRG’s global growth strategy and builds on the strengthening relationship between the UAE and Turkmenistan. It strengthens XRG’s presence in the Caspian region, expands our resource base, and reflects our ambition to be a reliable supplier of cleaner energy to meet the world’s evolving needs.”
According to Petronas, the Block 1 concession currently produces approximately 400 million cubic feet of natural gas per day. The block is said to offer significant long-term potential, with access to over 7 trillion cubic feet of natural gas resources and future opportunities to expand production capacity.
“As the first international operator in Turkmenistan’s energy sector close to three decades ago, this milestone reinforces our presence and signifies our continued expansion in the Upstream sector,” said Mohd Jukris Abdul Wahab , Executive Vice President and Chief Executive Officer of Upstream at Petronas.
The collaboration is envisaged to support Turkmenistan in ensuring energy supply stability and export diversification. All partners also expect the deal to help them achieve sustainable growth and provide economic value amid rising regional and global demand for natural gas.
Described as a low-carbon energy, natural gas, and chemicals investment company, XRG was launched in late 2024 by ADNOC.
The investment firm recently acquired Galp’s 10% stake in the Area 4 concession offshore Mozambique. Thanks to this, it now has access to the Rovuma supergiant gas basin, holding what is said to be one of the world’s largest gas discoveries in the past fifteen years.
On the other side of the globe, Petronas and its partners in Block 64 offshore Suriname, TotalEnergies and QatarEnergy, are getting ready to drill the Macaw-1 exploration well by mid-May.