Abu Dhabi National Oil Company (ADNOC) has agreed to award China National Petroleum Corporation (CNPC) an 8% interest in Abu Dhabi’s onshore oil concession.
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The onshore concession is operated by the Abu Dhabi Company for Onshore Petroleum Operations (ADCO).
Under the agreement, which carries a term of 40 years backdated to 1 January 2015, CNPC has paid a sign-up bonus of AED 6.5bn ($1.77bn) to enter the concession.
ADNOC Group CEO Dr Sultan Ahmed Al Jaber said: “Our agreement with CNPC strengthens and deepens the strategic and economic relationship between the United Arab Emirates and China.
“With our common vision for value add partnerships, we see tremendous opportunity in working together to optimise our energy resources, by achieving maximum economic value, in support of ADNOC’s long-term growth objectives.”
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By GlobalData“This will be a mutually beneficial partnership that will enable us to maintain strong production levels, as, together, we maximise the returns from what is a very attractive, long-term and sustainable opportunity in our onshore oilfields.”
CNPC is one of the largest oil and gas producers in China, which is the second largest energy consumer in the world and provides nearly 52% of the country’s crude oil, as well as 71% of its natural gas requirement.
CNPC owns oil and gas assets in 37 countries located worldwide.
CNPC chairman Wang Yilin said: “This landmark agreement marks an important new phase in CNPC’s strategic relationship with ADNOC and we hope it will lead to further opportunities to participate in the UAE’s energy sector.
“As part of the agreement to enable the optimal, efficient and sustainable development of the concession, CNPC will play an active role in defining and developing technology applications in mature oil fields by planning to establish a tailor-made technology hub in ADCO.”
In addition to CNPC, BP (10%), Inpex Corporation (5%), Total (10%) and GS Energy (3%) also hold stakes in ADCO.
Image: CNPC Headquarters in Beijing, China. Photo: courtesy of Charlie fong / Wikipedia.
