State-owned company Abu Dhabi National Oil Company (Adnoc) has signed an agreement to offload a 20% stake in the city’s offshore SARB and Umm Lulu concession to Spanish company Cepsa in a AED5.5bn ($1.5bn) deal.

Under the agreement, Cepsa will have access to the concession for a term of 40 years.

The proposed transaction is in line with Adnoc’s strategy to maximise returns from its resources, expand the downstream business, and retain value for the UAE.

In addition to SARB and Umm Lulu, the concession area contains two smaller fields in Bin Nasher and Al Bateel.

Adnoc group CEO Dr Sultan Ahmed Al Jaber said: “This long-term agreement is a milestone in the development of Abu Dhabi’s integrated oil and gas sector and in the delivery of ADNOC’s 2030 smart growth strategy.

“This partnership ensures we continue to maximise value from our hydrocarbon resources, in line with the leadership’s directives, by capturing that value and financial return here in the UAE.

“The agreement reflects Adnoc’s new partnership approach, as we expand and diversify our partner base across Adnoc’s integrated value chain.”

“The agreement also reflects Adnoc’s new partnership approach, as we expand and diversify our partner base across Adnoc’s integrated value chain.”

The company’s partnership with Cepsa also includes pursuing expansion opportunities in its downstream business, in the UAE and overseas.

Cepsa noted that the transaction will enable it to strengthen its energy model and long-term strategy.

In addition, the agreement is expected to increase Cepsa’s footprint in the UAE.

The remaining 60% stake in the concession will be operated by ADNOC Offshore, a subsidiary of Adnoc.

Earlier this month, the company reached a deal to sell a 10% participating interest in its offshore Lower Zakum concession in the UAE to an Indian consortium led by ONGC Videsh for a total consideration of AED2.2bn ($600m).

ADNOC is engaged in finalising agreements for the remaining stakes in the SARB and Umm Lulu, the Lower Zakum, the Umm Shaif and Nasr concessions.