While addressing a large gathering of the Indian community in Dubai today, Modi referred to the major deal and said it was the "beginning of a bright dimension in our partnership".
OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and a unit of Bharat Petroleum Corp Ltd (BPCL), paid a signing amount of $600 million for a 10 per cent stake in Abu Dhabi National Oil Co's (ADNOC) 40-year Lower Zakum Concession, Offshore Abu Dhabi.
“The current production of this field is about 400,000 barrels of oil per day (20 million tonnes per annum) and Indian consortium's annual share shall be about 2 million tonnes," the OVL said.
The field is to achieve plateau target of 450,000 barrels of oil per day by 2025.
The concession, which has a term of 40 years with an effective date of March 9, 2018, was signed by ONGC Group Chairman Shashi Shanker and ADNOC Group Chief Executive Sultan Ahmed Al Jaber.
“ADNOC is finalising the potential partners for the remaining 30 per cent of the available 40 per cent stake in the Lower Zakum Concession earmarked for international oil and gas companies,” the statement said.
The deal "will help India meet its growing demand for energy and refined products, create opportunities for ADNOC to increase its market share in a key growth market, and build a solid foundation as ADNOC explores potential international investments, particularly focused on downstream opportunities," Sultan al-Jaber said.
Shanker hoped that the historic agreement will lead to further opportunities for Indian oil and gas companies
to participate in the UAE's energy sector.
"The agreement reflects the vision of the Prime Minister of India towards strengthening hydrocarbon linkages with the UAE on a win-win basis," he said.
ADNOC chief executive said the pact supports company's strategy to maximise economic value and recovery from its offshore oil and gas resources. "This is an attractive and strategic agreement for both parties that will deliver competitive returns and long term growth opportunities."
ADNOC had in August last year said that it would split its ADMA-OPCO offshore concession into three areas - Lower Zakum, Umm Shaif and Nasr, and Sateh Al Razboot and Umm Lulu - with new terms to unlock greater value and increase opportunities for partnerships.
"The present transaction marks entry of OVL in highly prospective UAE region and is consistent with its stated strategic objective of adding high quality producing assets to its existing oil and gas exploration and production portfolio," the statement said.
OVL is India's largest international oil and gas company, having 39 projects in 18 countries, including Azerbaijan, Bangladesh, Brazil, Colombia, Kazakhstan, Mozambique, Myanmar, Russia, South Sudan, Sudan, Namibia, Venezuela, Vietnam and New Zealand.
It currently produces about 277,000 barrels of oil and oil equivalent gas per day and has total oil and gas reserves (2P) of about 704 million tonnes of oil equivalent as on April 1, 2017.
ADNOC will have 60 per cent stake in the existing ADMA- OPCO concession, which produces around 700,000 barrels per day of oil and is projected to reach about 1 million barrels per day 2021.
Existing shareholders in ADMA-OPCO are BP plc with 14.67 per cent, Total SA with 13.33 per cent and Japan Oil Development Co with 12 per cent.
Alongside the concession award, ADNOC and the Indian Strategic Petroleum Reserves Ltd (ISPRL) exchanged agreements, to implement the strategic crude oil storage facility in Mangalore.
The partnership with ISPRL, an Indian government- owned company mandated to store crude oil for strategic needs, covers the storage of 5.86 million barrels of ADNOC crude oil in underground facilities, at the Karnataka facility.
The oil storage facility will help ensure India's energy security, as well as enable ADNOC to efficiently and competitively meet market demand in India and across the fast developing south east Asian economies.
The decision to establish the strategic reserve was announced in January 2017 during a visit to India by Sheikh Mohamed bin Zayed.