State-owned Abu Dhabi National Oil Company awarded four per cent of an onshore concession held by CEFC China Energy Company to a subsidiary of China ZhenHua Oil Company.
The transfer of ownership was approved by Abu Dhabi's Supreme Petroleum Council, Adnoc said in a statement on Sunday. North Petroleum International Company is the China ZhenHua Oil subsidiary that will now operate the concession stake. The company did not transfer the value of the transaction.
Last year, China Energy took a four per cent stake in Adnoc Onshore, formerly known as Adco, a subsidiary of the Abu Dhabi state firm that operates onshore concessions.
"China ZhenHua Oil’s acquisition of the four percent 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," Adnoc group chief executive Dr Sultan Al Jaber said.
China ZhenHua Oil is fully owned by the Assets Supervision and Administration Commission of the State Council, a government agency that oversees a number of assets across sectors such as telecoms, energy, and petrochemicals.
The company operates 11 oil and gas upstream projects in six countries, with around 10 million metric tonnes annually of total production. The entity also has interests in fuel storage, transportation, and refining business, with a trading desk based out of Singapore.
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Chinese energy firms have steadily increased their participation in concessions operated by Adnoc. Chinese President Xi Jinping led a delegation to the UAE earlier this year, as the world's second-largest oil consumer looked to diversify its offtake of Middle East crude, ahead of US sanctions against Iran.
Adnoc also awarded a Dh5.8 billion seismic survey agreement to BGP, a unit of China National Petroleum Corporation, during the July visit. The company will acquire 2D and 3D data on 30,000 square kilometres acreage offshore as well as 23,000 sq km onshore.
The governments also signed a strategic partnership agreement to collaborate on polymers, technology, and market access.
China, an explorer for oil and gas in Iran and Iraq, is looking for more stable, secure, and lower-cost barrels in Abu Dhabi.
Adnoc last year awarded CNPC subsidiary, China Petroleum Engineering & Construction Corporation, an engineering, procurement and construction contract to expand production capacity at the onshore Bab field to 450,000 barrels per day from its present capacity of 420,000 bpd. CNPC also took an eight per cent stake in Adnoc Onshore, making China one of the largest foreign investors in the Abu Dhabi oil and gas sector.
Other partners in Adnoc Onshore include BP and France's Total with 10 per cent interest each, Japan's Inpex Corporation with a five per cent stake and South Korea's GS Energy with a three per cent participation. Adnoc retains the majority 60 per cent holding across the concession.