ABU DHABI - The Abu Dhabi National Oil Co.

In the early 1980s, as ADNOC's management was dominated by Algerians, the national company sought to become an operator on its own. Its then Algerian CEO, Mahmoud Hamra-Krouha, was backed by then ADNOC Chairman Shaikh Tahnoun Bin Mohammed Al Nahyan. Krouha brought in upstream experts from the Algerian state concern Sonatrach, where he used to be a high-ranking executive, to undertake the whole range of operations. Among other things, Krouha took the highly risky initiative of getting the Upper Zakum field to be developed by ADNOC-hired contractors in the 1970s. Eventually, ADNOC had to spend $7 bn on Upper Zakum, a very complex structure which required highly qualified companies and advanced technology but which ADNOC did not secure. The field's production declined considerably in the first half of the 1980s and Abu Dhabians blamed Krouha for the huge loss. The Algerians' work was suspended in 1987/88, partly because of power struggles and partly in view of a world oil glut that developed from 1982.

In the late 1980s, as Abu Dhabians took over from Krouha and fellow Algerians, a number of new oil and gas fields were discovered by ADNOC. Some of the fields were taken up by Japanese interests in partnership with the national company, such as the Satah offshore discovery.

Fields retained by ADNOC are small relative to those already developed. They might be opened to foreign partnership if ADNOC gets attractive offers and if the SPC decides on their development. Test operations by ADNOC have included work to generate stratigraphic and structural prospects.

ADNOC in 1980 was given the right to explore and produce hydrocarbons in three offshore and two onshore blocks, totalling 34,750 sq km, at its own risk. A five-year exploration plan, including 3-D seismic surveys, was launched to cover 5,000 km onshore and 3,500 km offshore, using the most advanced geophysical vessels in the industry. Interpretation of data obtained was completed in-house, and led to the drilling of ADNOC's first sole-risk exploration well, offshore, in 1981. Most of the large and medium sized pay zones have been detected since then, and the company has decided that further discoveries will require more sophisticated approaches.