• Agreements deepen further the
strategic and economic relationships between UAE and the world’s second
largest economy
• CNPC awarded 10% interest in Umm Shaif and Nasr concession and 10% interest in Lower Zakum concession
• Concession entry fees valued at AED 4.3 billion
• Expanded partnership with CNPC will enhance ADNOC’s ability to
generate greater returns from its offshore fields as it accelerates
delivery of its 2030 growth strategy
Abu Dhabi, United Arab Emirates.-Wednesday, March 21st 2018 [ AETOS Wire ]
The former ADMA offshore concession, which expired on 8 March 2018, has been split into three separate offshore concessions, each operated by ADNOC Offshore. Offshore concessions awarded or to be awarded are:
The
China National Petroleum Corporation (CNPC), the world’s third largest
oil company, has been awarded stakes in two of Abu Dhabi’s offshore
concession areas following the signing of agreements with the Abu Dhabi National Oil Company (ADNOC) today.
Under the terms of the agreements, CNPC, through its majority-owned listed subsidiary PetroChina, has been granted a 10% interest in the Umm Shaif and Nasr concession and a 10% interest in the Lower Zakum concession.
PetroChina
contributed a participation fee of AED 2.1 billion (US $575 million) to
enter the Umm Shaif and Nasr concession and a fee of AED 2.2 billion
(US $600 million) to enter the Lower Zakum concession. Both concessions
will be operated by ADNOC Offshore, on behalf of all concession
partners.
The
agreements were signed, in Abu Dhabi, by His Excellency Dr Sultan Ahmed
Al Jaber, ADNOC Group CEO and His Excellency Wang Yilin, CNPC Chairman.
The agreements have a term of 40 years and are backdated to March 9,
2018.
H.E.
Dr Al Jaber said the expanded collaboration with CNPC further
strengthens and deepens the strategic and economic relationship between
the United Arab Emirates and China, the world’s second largest economy.
“Energy cooperation is an increasingly important aspect of the UAE’s
relations with China, the number one oil importer globally and a major
growth market for our products and petrochemicals. These agreements are
new milestones in ADNOC’s thriving partnership with CNPC and also
represent an important platform upon which we can explore opportunities
further downstream.
“CNPC’s
involvement in our offshore concession areas will help to maximise the
returns from what are very attractive, stable and long-term
opportunities. At the same time these agreements further underline the
international energy markets’ confidence in ADNOC’s 2030 growth strategy
as we accelerate delivery of a more profitable upstream business and
generate strong returns for the UAE.”
China's
largest oil and gas producer and supplier, CNPC, through PetroChina,
produces 52% of China’s crude oil and 71% of its natural gas production,
and has exploration and production activities in more than 30 countries
in Africa, Central Asia-Russia, America, the Middle East and the
Asia-Pacific. In 2016, PetroChina produced 772.9 million barrels of
crude oil and 3,464 billion cubic feet of natural gas in China.
In
February 2017, CNPC was awarded an 8% interest in Abu Dhabi’s onshore
concession, operated by ADNOC Onshore. It also has a 40% stake in the Al
Yasat concession with ADNOC.
H.E. Wang Yilin said: “We are honoured to participate in the Umm Shaif and Nasr, and Lower Zakum concessions. These
agreements strengthen our growing relationship with ADNOC, and will
help to meet China’s expanding demand for energy and contribute to asset
portfolio optimization and profitability enhancement of PetroChina. To
promote development of the assets, we will closely collaborate with
ADNOC to deploy world class engineering solutions and advanced
technology to maximise recovery from these two concessions.”
The
Umm Shaif and Nasr concession, and the Lower Zakum concession have been
created from the former ADMA offshore concession, with the aim of
maximising commercial value, broadening the partner base, expanding
technical expertise, and enabling greater market access.
The
Umm Shaif field’s Arab reservoir is characterised by a huge gas cap –
one of the largest in the region – with reserves rich in condensates.
The gas cap overlays an oil rim which, in combination with Nasr field,
has a crude production capacity of 460,000 bpd.
ADNOC plans to process 500 million standard cubic feet of gas per day
from Umm Shaif’s gas cap to help meet Abu Dhabi’s growing domestic
demand for energy. The condensates, from the gas cap, will be refined to
extract higher value products that can be used in a variety of
petrochemical applications.
CNPC joins Eni (10%) and Total (20%)
as participants in the Umm Shaif and Nasr concession; and an ONGC
Videsh led consortium (10%), INPEX Corporation (10%), Eni (5%) and Total (5%) as participants in the Lower Zakum concession. ADNOC retains 60% majority shares in both concessions.
China
is the world’s largest oil importer, with the UAE ranking tenth in
supplies to the country. While China grows its domestic refining
capacity and fills its strategic inventories, the country continues to
secure global crude supplies. By 2020, China’s oil consumption is
expected to reach 12 million barrels per day.
China and the UAE have made a number of co-investments in the energy sector in the past year. In
February 2017, the China National Petroleum Corporation (CNPC) was
awarded minority stakes in the UAE's onshore oil reserves. And, in
November of 2017, ADNOC and CNPC signed a framework agreement covering
various areas of potential collaboration, including offshore
opportunities and sour gas development projects.
Meanwhile,
ADNOC is also focusing on downstream expansion in China and Asia, where
demand for petrochemicals and plastics, including light-weight
automotive components, essential utility piping and cable insulation, is
forecast to double by 2040. China is the largest export customer in
Asia, for Borouge, a petrochemicals joint venture between ADNOC and
Borealis, accounting for 1.2 million tons per year of polyolefins, equal
to one third of its sales worldwide.
Note to editorsThe former ADMA offshore concession, which expired on 8 March 2018, has been split into three separate offshore concessions, each operated by ADNOC Offshore. Offshore concessions awarded or to be awarded are:
|
Concession Name |
ADNOC Share |
Partner Share |
Target Production
|
|
|
Oil
|
Gas
|
|||
|
Lower Zakum |
60% |
10% - ONGC Videsh-led consortium 10% - INPEX CORPORATION 5% - Eni 5% - Total 10% - China National Petroleum Corporation |
450,000 bpd |
Nil
|
|
Umm Shaif & Nasr |
60% |
10% - Eni 20% - Total 10% China National Petroleum Corporation |
460,000 bpd |
500 million scfd
|
|
SARB & Umm Lulu/ |
60% |
20% - Cepsa 20% - to be announced |
215,000 bpd |
Nil
|
About ADNOC
ADNOC
is a major diversified group of energy and petrochemical companies,
that produces about 3 million barrels of oil and 9.8 billion cubic feet
of raw gas a day. Its integrated upstream, midstream and downstream
activities are carried out by 14 specialist subsidiary and joint venture
companies. To find out more visit www.adnoc.ae
Contacts
Abu Dhabi National Oil Company (ADNOC)
Moath Kasasbeh, +97127075994
