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Abu Dhabi says CEFC’s 4% onshore stake transferred to China ZhenHua Oil Co

Abu Dhabi says CEFC’s 4% onshore stake transferred to China ZhenHua Oil Co

CEFC is being restructured after facing debt troubles

Abu Dhabi National Oil Company (ADNOC) has announced that a 4 per cent in its onshore concession previously held by CEFC China Energy Company Limited has been acquired by a subsidiary of China ZhenHua Oil Co

The acquisition comes as troubled CEFC looks to raise cash after the company saw state funding pulled following bribery acquisitions against top executives including chairman Ye Jianming.

Reuters reported in April that state-run CITIC Group was conducting due diligence on the stake, which was purchased for $900m in February 2017 as CEFC looked to expand its energy assets.

Read: China’s CITIC group conducting due diligence on CEFC’s Abu Dhabi oil stake

ADNOC said the ownership change was approved by Abu Dhabi’s Supreme Petroleum Council.

Read: Abu Dhabi awards China’s CEFC 4% of oil concession for $900m

“China ZhenHua Oil’s acquisition of the four percent stake in the onshore concession underlines the continued pull of the United Arab Emirates as a leading global energy and investment destination, backed by a strong, stable and secure commercial environment,” said ADNOC Group CEO Sultan bin Ahmad Sultan Al Jaber.

“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.”

China ZhenHua is 100 per cent owned indirectly by Chinese government agency the Assets Supervision and Administration Commission of the State Council.

The company operates 11 oil and gas upstream projects across six countries with gross production close to 10 million metric tonnes per year, according to the announcement.

The company joins BP of the UK (10 per cent), Total of France (10 per cent), China National Petroleum Corporation (CNPC) (8 per cent), Inpex Corporation of Japan (5 per cent) and GS Energy of South Korea (3 per cent) as a stakeholder in ADNOC Onshore.

ANDOC retains the other 60 per cent of the concession.

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