Adnoc Signs Offshore Concessions With Cnpc Strengthening Ties With World’S Number One Oil Importing Country

date

25-Mar-2018

Abu Dhabi, United Arab Emirates –(AETOSWire)– March 21, 2018: 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) today. Under the terms of the agreements, CNPC, through its majority-owned listed subsidiary PetroChina, has been granted a 10% interest in the Umm Shaif and Nasr concession and a 10% interest in the Lower Zakum concession. PetroChina contributed a participation fee of AED 2.1 billion (US $575 million) to enter the Umm Shaif and Nasr concession and a fee of AED 2.2 billion (US $600 million) to enter the Lower Zakum concession. Both concessions will be operated by ADNOC Offshore, on behalf of all concession partners. The agreements were signed, in Abu Dhabi, by His Excellency Dr Sultan Ahmed Al Jaber, ADNOC Group CEO and His Excellency Wang Yilin, CNPC Chairman. The agreements have a term of 40 years and are backdated to March 9, 2018. H.E. Dr Al Jaber said the expanded collaboration with CNPC further strengthens and deepens the strategic and economic relationship between the United Arab Emirates and China, the world’s second largest economy. “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. “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.” China's largest oil and gas producer and supplier, CNPC, through PetroChina, produces 52% of China’s crude oil and 71% 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 2016, PetroChina produced 772.9 million barrels of crude oil and 3,464 billion cubic feet of natural gas in China. In February 2017, CNPC was awarded an 8% interest in Abu Dhabi’s onshore concession, operated by ADNOC Onshore. It also has a 40% stake in the Al Yasat concession with ADNOC. H.E. 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 optimization 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. The Umm Shaif field’s Arab reservoir is characterised by a huge gas cap – one of the largest in the region – with reserves rich in condensates. The gas cap overlays an oil rim which, in combination with Nasr field, has a crude production capacity of 460,000 bpd. ADNOC plans to process 500 million standard cubic feet of gas per day from Umm Shaif’s gas cap to help meet Abu Dhabi’s growing domestic demand for energy. The condensates, from the gas cap, will be refined to extract higher value products that can be used in a variety of petrochemical applications. CNPC joins Eni (10%) and Total (20%) as participants in the Umm Shaif and Nasr concession; and an ONGC Videsh led consortium (10%), INPEX Corporation (10%), Eni (5%) and Total (5%) as participants in the Lower Zakum concession. ADNOC retains 60% majority shares in both concessions. China is the world’s largest oil importer, with the UAE ranking tenth in supplies to the country. While China grows its domestic refining capacity and fills its strategic inventories, the country continues to secure global crude supplies. By 2020, China’s oil consumption is expected to reach 12 million barrels per day. China and the UAE have made a number of co-investments in the energy sector in the past year. In February 2017, the China National Petroleum Corporation (CNPC) was awarded minority stakes in the UAE's onshore oil reserves. And, in November of 2017, ADNOC and CNPC signed a framework agreement covering various areas of potential collaboration, including offshore opportunities and sour gas development projects. Meanwhile, ADNOC is also focusing on downstream expansion in China and Asia, where demand for petrochemicals and plastics, including light-weight automotive components, essential utility piping and cable insulation, is forecast to double by 2040. China is the largest export customer in Asia, for Borouge, a petrochemicals joint venture between ADNOC and Borealis, accounting for 1.2 million tons per year of polyolefins, equal to one third of its sales worldwide. Note to editors The former ADMA offshore concession, which expired on 8 March 2018, has been split into three separate offshore concessions, each operated by ADNOC Offshore. Offshore concessions awarded or to be awarded are: Concession Name ADNOC Share Partner Share Target Production Oil Gas Lower Zakum 60% 10% - ONGC Videsh-led consortium 10% - INPEX CORPORATION 5% - Eni 5% - Total 10% - China National Petroleum Corporation 450,000 bpd Nil Umm Shaif& Nasr 60% 10% - Eni 20% - Total 10% China National Petroleum Corporation 460,000 bpd 500 million scfd SARB & Umm Lulu/ 60% 20% - Cepsa 20% - to be announced 215,000 bpd Nil
About ADNOC ADNOC is a major diversified group of energy and petrochemical companies, that produces about 3 million barrels of oil and 9.8 billion cubic feet of raw gas a day. Its integrated upstream, midstream and downstream activities are carried out by 14 specialist subsidiary and joint venture companies. To find out more visit www.adnoc.ae
 

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