Adnoc in stakes transfer deal to add new Chinese partner


Issac John

Published: Mon 27 Jul 2020, 7:10 PM

Last updated: Mon 27 Jul 2020, 9:14 PM

The Abu Dhabi National Oil Company (Adnoc) announced on Monday a deal allowing the transfer of some stakes in its offshore concessions held by China National Petroleum Corporation to China National Offshore Oil Corporation's subsidiary CNOOC.
The transfer has been approved by Abu Dhabi's Supreme Petroleum Council and marks the first time that a Chinese offshore oil and gas company joins Adnoc's concessions.
The transfer of concession rights in Lower Zakum and Umm Shaif and Nasr offshore concessions to another key Chinese company reinforces the strong and strategic bilateral ties between the UAE and the world's second-largest economy, the Abu Dhabi-based oil giant said.
The transfer comprises of CNOOC - the largest producer of offshore crude oil and natural gas in China - acquiring (through its holding company, CNOOC Hong Kong Holding (CNOOC HK)), a 40 per cent interest in CNPC's majority-owned subsidiary PetroChina Investment Overseas (Middle East).
Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc Group CEO, said: "The transfer of part of CNPC's share in two of Adnoc's major offshore concessions to CNOOC reflects the long-standing strategic and economic bilateral relations between the UAE and China, and highlights the continued pull of the UAE as a leading global energy and investment destination, backed by a stable and reliable business environment. The transfer also illustrates Adnoc's strengthened access to international markets and partners and our commitment to generating sustainable returns for the UAE."
"CNOOC joins our other international partners in the Lower Zakum and Umm Shaif and Nasr concessions and bring world-class expertise and technology to help us continue to maximize value from the concessions as we create a more profitable upstream business and deliver our 2030 strategy," said Adnoc, which is pressing ahead with a drive to invest $45 billion in downstream activities.
PetroChina holds a 10 per cent interest in the Lower Zakum concession and a 10 per cent interest in the Umm Shaif and Nasr concession. As a result of the transfer, CNOOC will hold a four per cent interest in the Lower Zakum concession and a four per cent interest in the Umm Shaif and Nasr concession, while PetroChina will retain a six percent stake in the concessions.
Dai Houliang, chairman of CNPC, said his company would leverage the strengths of the two Chinese companies, which will help reinforce the development of these two concessions.
Wang Dongjin, chairman of CNOOC, said the deal would further strengthen the strategic relationship with Adnoc and PetroChina.
CNOOC joins an ONGC Videsh-led consortium (10 per cent), Inpex Corporation (10 per cent), CNPC (six per cent), Eni (five per cent), and Total (five per cent) as participants in the Lower Zakum concession; and Eni (10 per cent), Total (20 per cent), and CNPC (six per cent) as participants in the Umm Shaif and Nasr concession. Adnoc retains a 60 per cent majority ownership interest in both concessions.

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