ADNOC adds new Chinese partner to Lower Zakum, Umm Shaif, Nasr concessions
The Abu Dhabi National Oil Co. (ADNOC) has agreed to the transfer of rights in its Lower Zakum and Umm Shaif and Nasr offshore concessions from China National Petroleum Corp. (CNPC) to China National Offshore Oil Corp. subsidiary CNOOC Ltd. (CNOOC). The transfer has been approved by Abu Dhabi’s Supreme Petroleum Council (SPC) and marks the first time that a dedicated Chinese offshore oil and gas company joins ADNOC’s concessions.
The transfer comprises of CNOOC acquiring (through its holding company, CNOOC Hong Kong Holding Ltd., a 40% interest in CNPC’s majority-owned subsidiary PetroChina Investment Overseas (Middle East) Ltd. (PetroChina).
PetroChina holds a 10% interest in the Lower Zakum concession and a 10% interest in the Umm Shaif and Nasr concession (OGJ Online, Mar. 22, 2018). As a result of the transfer, CNOOC will hold a 4% interest in the Lower Zakum concession and a 4% interest in the Umm Shaif and Nasr concession, while PetroChina will retain a 6% stake in the concessions.
This agreement follows the signing of a comprehensive framework agreement between ADNOC and CNOOC in July 2019 to explore new opportunities for collaboration in both the upstream and downstream sectors as well as in LNG.
CNOOC joins an ONGC Videsh-led consortium (10%), INPEX Corp. (10%), CNPC (6%), Eni (5%), and Total (5%) as participants in the Lower Zakum concession; and Eni (10%), Total (20%), and CNPC (6%) as participants in the Umm Shaif and Nasr concession. ADNOC retains a 60% majority ownership interest in both concessions.
Chinese energy companies have steadily increased their participation in ADNOC’s upstream and downstream operations. At the same time, ADNOC has identified China – the world’s second-largest oil consumer – as an important growth market for its crude oil and petrochemical products.
