Abu Dhabi National Oil Co. (ADNOC) has awarded China National Petroleum Corp. (CNPC) 8% interest in Abu Dhabi’s onshore oil concession in exchange for a signup bonus of $1.77 billion.
The concession is operated by Abu Dhabi Co. for Onshore Petroleum Operations (ADCO). The agreement covers a 40-year term backdated to Jan. 1, 2015.
The concession—including Bab, Bu Hasa, Shah, and Asab fields—has total resources of 20-30 billion boe over the term of the concession. As of December, overall production in 2016 was expected to average 1.66 million b/d of oil.
“This will be a mutually beneficial partnership that will enable us to maintain strong production levels, as, together, we maximize the returns from what is a very attractive, long-term and sustainable opportunity in our onshore oil fields,” said Ahmed Al Jaber, ADNOC director general.
CNPC Chairman Wang Yilin said, “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.”
ADNOC notes the UAE is China’s second-largest trading partner in the Middle East with trade between the UAE and China estimated to have increased to $60 billion in 2016, up from $54.8 billion in 2015. About 60% of China’s total trade passes through the UAE, where it is then re-exported to Africa and Europe.
Participants in the onshore concession and shareholders of ADCO are BP PLC 10%, Total SA 10%, Inpex Corp. 5%, and GS Energy Corp. 3%. BP was awarded its stake in December 2016 (OGJ Online, Dec. 19, 2016).
ADNOC says it will continue to explore opportunities with potential partners for the remaining 4% of the overall 40% stake in the concession earmarked for foreign companies.