Agreements are for 40 years and backdated to March 9, 2018
The Abu Dhabi National Oil Company (ADNOC) has signed agreements with China National Petroleum Corporation (CNPC), which award the latter stakes in two of Abu Dhabi’s offshore concession areas.
As per the terms of the deal, CNPC through its subsidiary PetroChina has been given a 10% interest in the Umm Shaif and Nasr concession and a 10% interest in the Lower Zakum concession. PetroChina is said to have contributed a participation fee of $575m to enter the Umm Shaif and Nasr concession and a fee of $600m to enter the Lower Zakum concession. Both concessions will be operated by ADNOC Offshore, on behalf of all the concession partners.
The agreements were signed, in Abu Dhabi by Dr. Sultan Ahmed Al Jaber, ADNOC Group CEO and Wang Yilin, CNPC Chairman.
“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 represent an important platform upon which we can explore opportunities further downstream,” said Dr. Al Jaber.
Dr. Al Jaber said the collaboration with CNPC ‘further strengthens and deepens the strategic and economic relationship between the UAE and China, the world’s second largest economy’.
“CNPC’s involvement in our offshore concession areas will help to maximise the returns from what are very attractive, stable and long-term opportunities. At the same time these agreements further underline the international energy markets’ confidence in ADNOC’s 2030 growth strategy as we accelerate delivery of a more profitable upstream business and generate strong returns for the UAE,” added Dr. Al Jaber.
In February 2017, CNPC was awarded an 8% interest in Abu Dhabi’s onshore concession, which is operated by ADNOC Onshore. CNPC also has a 40% stake in the Al Yasat concession with ADNOC.
Wang Yilin 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 optimisation and profitability enhancement of PetroChina. To promote development of the assets, we will closely collaborate with ADNOC to deploy world class engineering solutions and advanced technology to maximise recovery from these two concessions.”
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.