CEFC China Awarded 40-year Concession for Abu Dhabi’s Largest Oil BlockCEFC China
On Feb 20, CEFC China Energy Company Limited (CEFC China) signed an agreement with the Abu Dhabi National Oil Company (ADNOC) that grants CEFC China a 4% interest in Abu Dhabi’s ADCO onshore oil concession. The agreement has a term of 40 years and involves a total investment of USD 1.8 billion. This is the first time that a Chinese company has been awarded a stake in an Abu Dhabi onshore oil and gas concession.
According to the agreement, a 4% stake would give CEFC China access to over 3.2 million tons of oil per year at the current level of production. The number will exceed 4 million tons per year when the fields reach their production plateau. On top of this, CEFC China has also signed a long-term supply agreement with ADNOC that would secure another 10 million tons of oil per year. These two deals combined will provide China with stable access to an additional 13.2 million tons of high quality crude oil every year.
The agreement was signed by Mr. Ye Jianming, Chairman of the Board of Directors of CEFC China and His Excellency Dr. Sultan Ahmed Al Jaber, ADNOC Group Chief Executive Officer and member of Abu Dhabi’s Supreme Petroleum Council. CEFC China now joins BP of the UK, Total of France, Inpex Corporation of Japan, GS Energy of South Korea, and China National Petroleum Corporation (CNPC) as shareholders of the onshore concession.
The onshore concession covers 14 oil-fields located in the hydrocarbon-rich Rub' al Khali Basin in the Middle East, well known for its integrated structure, good reservoir properties and high quality oil. The concession area is the largest block ever developed in Abu Dhabi, accounting for half of the country’s oil and gas resources, both in terms of reserves and production. The block is currently in a period of steady production growth, and its newly drilled wells are featured by high yield and low production cost. The overall production now averages around 1.6 million barrels of oil per day (bpd), or 80 million tons per year, and is on track to reach 1.8 million bpd within 2017. In the next 5 years, the output will grow to and remain at 2 million bpd of oil. The block will be jointly managed by all shareholders. CEFC China will participate in the decision-making and management of the oil fields. Total and BP will bring technology and expertise to support the operation and development of the asset. Industry leading operational procedures and best practices will be applied to ensure every link of the production is managed in accordance with the highest industry standards.
Mr. Ye Jianming attended the signing ceremony and met with H.E. Dr. Al Jaber. Mr. Ye said: “This marks an important milestone in our strategic cooperation. Long-term and stable onshore oil rights and interests will allow us to further cooperate with Abu Dhabi on the exploration of upstream oil and gas resources, oil storage and open market trading.”
H.E. Dr. Al Jaber said: “We are pleased to be entering into this strategic partnership with CEFC China. This agreement demonstrates the innovative and strategic approach we are bringing to our business partnerships. As ADNOC embarks on implementing its 2030 growth strategy, we intend to continue to work closely with value-add partners that can contribute world-class technology, industry experience, financial resources and market access to compliment us in priority areas across the value chain.”
CEFC China and ADNOC have built a stable cooperative relationship as strategic partners over the past few years. Going forward, both companies will seek to promote closer cooperation between China, the Middle East and Europe in the energy sector across the industry chain and seek further cooperation between China and Abu Dhabi in areas including finance and infrastructure construction. CEFC China’s shareholding has secured long-term and stable crude oil rights and interests, expanded its presence in the upstream oil and gas industry in the Middle East, and established itself as a global player in the upstream of the industry chain. CEFC China will continue to expand investment in oil and gas stations in Europe and upstream resources in the Middle East, Central Asia, and Africa. In the meantime, the company will integrate its domestic oil storage and refinery facilities with overseas upstream resources and downstream terminals to strengthen its global competitiveness.
|Next: CEFC Shanghai Charity Fund Honored with Three Awards at China Charity Festival|