The Abu Dhabi National Oil Company (Adnoc) said on Monday it has awarded a 4 per cent stake in the Adco concession to CEFC China Energy in a US$888 million deal, a day after it also said China’s state-controlled China National Petroleum Corporation (CNPC) would be a partner in the emirate’s prized onshore oilfields.
Together with CNPC’s 8 per cent stake, the award to CEFC means that Chinese interests account for the largest foreign holding in the Adco, paying a combined $2.65bn to enter the concession.
“CEFC will complement the technical strengths of our existing partners and bring a new dynamic with their financial, commercial and investment experience,” said the Adnoc chief executive Sultan Al Jaber.
The addition of CEFC, a private conglomerate, closes out the more than three-year hunt for partners for the 40-year renewal of the concession which includes an family of 15 oilfields – responsible for more than half of the emirate’s production of 3.1 million barrels of oil per day.
The Abu Dhabi Company for Onshore Petroleum Operations (Adco), in which Adnoc has a 60 per cent stake, is the concession operator and the other foreign partners are Total of France, BP, Inpex of Japan and South Korea’s GS Energy.
CEFC has been working to gain more assets in the Middle East, particularly in Abu Dhabi, for the past couple of years and will look to integrate Adnoc’s onshore oil reserves with its storage facilities in China and Southeast Asia. “By building an energy corridor, linking China, the Middle East and Europe, we can connect the Chinese market with the upstream resources of Abu Dhabi and the terminals in Europe,” said Ye Jianming, CEFC chairman.
The company said that it had focused its investments in this direction to speed up its overseas exploration and leverage the 10 million tonnes of crude oil a year it has been receiving from Abu Dhabi.
“Through a strategic cooperation agreement with Abu Dhabi, the company has secured its long-term and stable oil rights and interests, engaged in the exploration of upstream oil and gas in Abu Dhabi and formed collaboration in energy reserves and open market trading,” it said.
CEFC has been increasing its investment portfolio with revenue nearly doubling to RMB263.1bn over the three years to 2015.
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