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Wed 21 Mar 2018 01:59 PM

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China's CNPC pays nearly $1.2bn for Abu Dhabi offshore oil concessions

China National Petroleum Corporation takes stakes in Umm Shaif and Nasr and Lower Zakum

China's CNPC pays nearly $1.2bn for Abu Dhabi offshore oil concessions

The China National Petroleum Corporation (CNPC), the world’s third largest oil company, has been awarded stakes in two of Abu Dhabi’s offshore concession areas following the signing of agreements with the Abu Dhabi National Oil Company (ADNOC).

CNPC, through its majority-owned listed subsidiary PetroChina, has been granted a 10 percent interest in the Umm Shaif and Nasr concession and a 10 percent interest in the Lower Zakum concession.

PetroChina contributed a participation fee of AED2.1 billion ($575 million) to enter the Umm Shaif and Nasr concession and a fee of AED2.2 billion ($600 million) to enter the Lower Zakum concession, a statement said.

Both concessions, which will run for 40 years, will be operated by ADNOC Offshore, on behalf of all concession partners.

Dr Sultan Ahmed Al Jaber, ADNOC Group CEO, said: “Energy cooperation is an increasingly important aspect of the UAE’s relations with China, the number one oil importer globally and a major growth market for our products and petrochemicals.

"These agreements are new milestones in ADNOC’s thriving partnership with CNPC and also represent an important platform upon which we can explore opportunities further downstream."

China's largest oil and gas producer and supplier, CNPC, through PetroChina, produces 52 percent of China’s crude oil and 71 percent of its natural gas production, and has exploration and production activities in more than 30 countries in Africa, Central Asia-Russia, America, the Middle East and the Asia-Pacific.

In February 2017, CNPC was awarded an 8 percent interest in Abu Dhabi’s onshore concession, operated by ADNOC Onshore. It also has a 40 percent stake in the Al Yasat concession with ADNOC.

Wang Yilin, CNPC chairman, said: “We are honoured to participate in the Umm Shaif and Nasr, and Lower Zakum concessions. These agreements strengthen our growing relationship with ADNOC, and will help to meet China’s expanding demand for energy and contribute to asset portfolio optimization and profitability enhancement of PetroChina.”

The Umm Shaif and Nasr concession, and the Lower Zakum concession have been created from the former ADMA offshore concession, with the aim of maximising commercial value, broadening the partner base, expanding technical expertise, and enabling greater market access.

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