State-run Abu Dhabi National Oil Company (ADNOC) said on Sunday it had signed an agreement giving China National Petroleum Corporation (CNPC) an 8 per cent stake in a 40-year onshore oil concession.
CNPC contributed a sign up bonus of Dhs6.5bn ($1.8bn) to enter the concession, ADNOC said in a statement. The onshore concession is operated by the Abu Dhabi Company for Onshore Petroleum Operations (ADCO).
Oil industry executives told Reuters on Friday that CNPC, China’s top state energy group, was set to sign the concession agreement after having obtained state regulatory approval for the investment.
The deal follows a similar pact BP struck with ADNOC in December for a 10-per cent stake in the ADCO concession.
The ADCO concession, including the Bab, Bu Hasa, Shah and Asab fields, has total resources of 20-30 billion barrels of oil equivalent over the term of the concession. The fields produce 1.6 million barrels per day (bpd) and are expected to reach 1.8 million bpd from 2017.
“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,” Wang Yilin, CNPC’s chairman, was quoted in the statement.
Total was the first major oil company to renew the concession, securing a 10 per cent stake in January 2015 and putting its rivals under pressure to improve terms after ADNOC said the French company made the best offer.
Other Asian energy companies were granted smaller stakes. INPEX Corp of Japan, and GS Energy of South Korea received 5 per cent and 3 per cent stakes respectively.