A Chinese petroleum producer is partnering with a UAE oilfield services company to exploit oil and gas assets.
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Petrofac, an oil services provider with headquarters in Sharjah, has formed a joint venture with the engineering unit of China National Petroleum Company (CNPC) to cater to China's needs. "CNPC has invested heavily in expanding its overseas portfolio, and it's got a lot of projects now," said Tom Grieder, the energy analyst for Asia at IHS Global Insight.
"It tends to rely on its own oilfield services subsidiaries to try to develop those projects, [but now] it's going into new areas where it has not as much technical experience."
Ensuring a steady flow of oil is key for China, which became the world's biggest energy consumer last year and relies on oil to help drive its 9.5 per cent annual economic growth.
It is redeveloping mature fields within its borders, auctioning challenging shale gas blocks and diversifying into offshore drilling - all areas that require specialised technology. CNPC, one of China's three biggest state oil producers, assembled a wide-ranging portfolio of oil and gas assets in Canada, Central Asia and the Middle East during a time of low oil prices, said Mr Grieder.
"They really splashed the cash around," he said.
"There will be more of an emphasis on rates of return on big investments going forward in order to preserve the long-term financial stability of [national oil companies]."
CNPC has also made inroads in Abu Dhabi, where in 2007 a subsidiary secured a US$3.2 billion (Dh11.75bn) contract to build the emirate's strategic pipeline to bypass the Strait of Hormuz. The joint venture is to be 51 per cent-owned by the CNPC subsidiary and 49 per cent-owned by Petrofac.
The companies have also worked together on other projects including Iraq's Rumaila field.
"Our collaboration should enable us to capitalise on the significant opportunities in China and internationally," Maroun Semaan, the chief operating officer of Petrofac, said in a company statement yesterday.
Shares of Petrofac on the London Stock Exchange were down more than 2 per cent at 1,371 pence.
