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China firm buys stake in Adnoc onshore concession

Issac John /Dubai
issacjohn@khaleejtimes.com Filed on December 9, 2018 | Last updated on December 9, 2018 at 05.53 pm
China firm buys stake in Adnoc onshore concession
Dr Sultan bin Ahmad Sultan Al Jaber and Liu Yijiang at the signing ceremony in Abu Dhabi on Sunday.

(Supplied photo)

Access to capital's concessions paves way for exchange of technology, operational experience, capital and market access

A bu Dhabi National Oil Company (Adnoc) on Sunday announced that a subsidiary of China ZhenHua Oil acquired a four per cent stake in its onshore oil concession that was previously held by CEFC China Energy Company.

In a statement, the state-owned oil conglomerate said Abu Dhabi's Supreme Petroleum Council has approved the transfer of a 4 per cent stake to North Petroleum International Company.

China ZhenHua Oil is 100 per cent indirectly owned by the Assets Supervision and Administration Commission of the State Council, a Chinese government agency that supervises and manages over a hundred state-owned assets and enterprises in a variety of sectors, including oil and petrochemicals and transport, it said.

Adnoc said the ownership change is in line with the UAE leadership's directives to grant access to Abu Dhabi's oil and gas concessions to partners who offer technology, operational experience, capital or market access.

Dr Sultan bin Ahmad Sultan Al Jaber, UAE Minister of State and Adnoc Group CEO, and Liu Yijiang, chairman of China Zhenhua Oil, endorsed the transfer.

"China ZhenHua Oil's acquisition of the 4 per cent stake in the onshore concession underlines the continued pull of the UAE as a leading global energy and investment destination, backed by a strong, stable and secure commercial environment. With China ZhenHua Oil, we will pursue mutually beneficial cooperation, share business growth opportunities and work together as we deliver on our 2030 smart growth strategy," said Dr Al Jaber.

Yijiang said China ZhenHua Oil, as a new partner in the UAE's upstream sector, is honuored to join the operating concession and will contribute its capabilities in technology, management and supply chains, which may maximise the benefits and value for all.

ZhenHua Oil operates 11 oil and gas upstream projects in six countries, with gross production of close to 10 million metric tons per year. It is also in the fuel storage, transportation and refining business, with a trading desk in Singapore.

China ZhenHua Oil joins BP of the UK (10 per cent), Total of France (10 per cent), China National Petroleum Corporation (8 per cent), Inpex Corporation of Japan (5 per cent), and GS Energy of South Korea (3 per cent) as participants in the onshore concession and shareholders of Adnoc Onshore.

Adnoc retains a majority 60 per cent share in the concession.

Adnoc, a diversified energy and petrochemicals group that produces about three million barrels of oil and 10.5 billion cubic feet of raw gas per day currently, said recently that it would accelerate plans to increase its oil production capacity to four million and five barrels per day by 2020 and 2030, respectively.

- issacjohn@khaleejtimes.com

author

Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.


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