Adnoc signs strategic agreement with China National Offshore Oil Corporation
The deal covers downstream assets as well as LNG sales and purchases
Abu Dhabi National Oil Company and state-owned China National Offshore Oil Corporation have signed an agreement to collaborate in the energy sector with the world’s largest oil importer.
The agreement covers ultra-sour gas development in Abu Dhabi, exploration for offshore hydrocarbons and the sale and purchase of liquefied natural gas, of which China is the largest buyer in the world.
It was signed as part of the official visit to Beijing by Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces.
“The future collaboration opportunities agreed today with CNOOC reinforce Adnoc's strategic approach to partners that offer technology, capital or market access to maximise value from Abu Dhabi’s vast oil and gas resources,” said Dr Sultan Al Jaber, Adnoc group chief executive and UAE Minister of State.
The Emirates accounts for 4 per cent of the world’s crude production, much of it from fields owned and operated by Adnoc in Abu Dhabi. China, which imports just about half of its oil from the Middle East, is playing an increasingly prominent role in the exploration and production of hydrocarbon resources in the UAE.
CNOOC will help Adnoc manage its ultra-sour gas field development in the segments of gas processing, treatment, drilling and field improvement and reservoir development plans.
Chinese energy services firm Offshore Oil Engineering company as well as China Oilfield Services could be tapped by both parties for possible offshore Abu Dhabi opportunities, the companies said.
Adnoc and CNOOC will also explore “potential LNG sales and purchase opportunities” including partnership and joint investment opportunities across the entire value chain of the super-chilled gas segment.
Abu Dhabi, which announced discovery of new reserves of natural gas amounting to an increase of up to 7.1 per cent last year, is looking to develop LNG export capabilities.
The emirate could have significant export capacity for LNG by 2024 on the back of new discoveries, consultancy Wood Mackenzie said in a report last year.
China is the world’s top importer for gas, which is deployed as a transitional fuel to help navigate the country’s switch from polluting coal to cleaner forms of energy.
In their pact, Adnoc and CNOOC looked to tap integrated refining and petrochemical opportunities in China, particularly in the state firm’s existing refining assets.
Adnoc, which has embarked on an ambitious downstream strategy, is looking for downstream assets abroad and has already signed an agreement with Saudi Aramco to develop an integrated refining and chemicals complex in India.
Over the last couple of years, several Chinese state-backed companies have won concessions offshore and onshore in Abu Dhabi with contractors undertaking significant energy services works in Adnoc-owned fields.
The agreements build on a visit by Chinese Premier Xi Jinping to the UAE in July last year, when Adnoc signed a wide-ranging agreement with China National Petroleum Company to explore partnership opportunities downstream.
Adnoc also awarded CNPC one of the world’s largest seismic surveys for hydrocarbons worth Dh5.8 billion during that visit.
Updated: July 22, 2019 08:51 PM