Wang Yilin (L), Chairman of China National Petroleum Corporation (CNPC), and Sultan Ahmed Al Jaber, CEO of Abu Dhabi National Oil Company (ADNOC), sign deals for China's national oil company to acquire stakes in two UAE offshore concessions in Abu Dhabi, the United Arab Emirates, on March 21, 2018. (Xinhua/ADNOC)
The United Arab Emirates (UAE) and China on Wednesday signed two deals for China's national oil company to acquire stakes in two UAE offshore concessions, in a bid to enhance bilateral economic cooperation.
The deals were signed by Sultan Ahmed Al Jaber, CEO OF Abu Dhabi National Oil Company (ADNOC), and Wang Yilin, chairman of China National Petroleum Corporation (CNPC), the UAE state news agency WAM reported.
Under the deals, which have a term of 40 years, the CNPC , through its majority-owned listed subsidiary PetroChina, acquires stakes in two Abu Dhabi's offshore concession areas.
PetroChina is granted a 10 percent stake in the Umm Shaif and Nasr concession, and a 10 percent stake in the Lower Zakum concession.
PetroChina paid 2.1 billion dirhams (575 million U.S. dollars) to enter the Umm Shaif and Nasr concession, and 2.2 billion dirhams to enter the Lower Zakum concession.
Both concessions will be operated by ADNOC Offshore on behalf of all concession partners.
Al Jaber said ADNOC's collaboration with the CNPC, China's largest oil and gas producer and supplier, will further deepen the strategic and economic relationship between the UAE and China.
Wang said the agreements will strengthen the CNPC's "growing relationship with ADNOC, and will help to meet China's rising demand for energy and contribute to asset portfolio optimization and profitability enhancement of PetroChina."
Through PetroChina, the CNPC produces 52 percent of China's crude oil and 71 percent of its natural gas.
In 2016, crude oil output from PetroChina's domestic operation was 763.8 million barrels, while domestic marketable natural gas output was 3,008.3 billion cubic feet, the company said on its official website.
In February 2017, the CNPC was awarded an 8 percent interest in Abu Dhabi's onshore concession, operated by ADNOC Onshore. It also has acquired a 40 percent stake in the Al Yasat concession.
Al Jaber added that "energy cooperation is an increasingly important aspect of the UAE's relations with China, the No. 1 oil importer globally and a major growth market for our products and petrochemicals."
The Umm Shaif field's Arab reservoir is characterized by a huge gas cap, one of the largest in the region, with rich reserves in condensates.
The gas cap overlays an oil rim, which in combination with Nasr field has a crude oil production capacity of 460,000 barrels per day.
The 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.
Abu Dhabi harbors 90 percent of the oil reserves in the UAE, which accounts for 7 percent of the world's known oil reserves, the WAM reported.