China's CNPC pays $1.18 billion for concessions in Abu Dhabi

DUBAI and HONG KONG (Bloomberg) -- China boosted its hold on Middle Eastern crude supply in a $1.18 billion deal for stakes in two oil and natural gas concessions in Abu Dhabi.

State-run China National Petroleum Corp. agreed to take 10% stakes in the Lower Zakum field and in the Umm Shaif and Nasr concession, Abu Dhabi National Oil Co. said Wednesday. The deal adds to the amount of crude CNPC produces in the United Arab Emirates after last year joining the partnership that pumps from the emirate’s biggest onshore fields. CNPC also produces at Iraq’s largest deposit, Rumaila.

Abu Dhabi, the UAE’s capital and biggest sheikhdom, is expanding partnerships with companies based in Asia as its seeks to boost sales in its largest regional market. The emirate aims to attract investment from oil-consuming countries eager for direct access to supplies. Adnoc brought Indian companies into Abu Dhabi’s oil fields for the first time in a deal last month. The company said it also wants to develop refineries in Asia and will seek partners for crude-processing and petrochemical plants at home.

“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,” Adnoc CEO Sultan Al-Jaber said in the statement. CNPC Chairman Wang Yilin said the deal “will help to meet China’s expanding demand for energy,” according to the statement.

These are the offshore concessions awarded or to be awarded by Adnoc:

Lower Zakum 60% -10% ONGC-led group 10% Inpex-10% CNPC-5% Total-5% Eni 450,000 bopd Nil Umm Shaif and Nasr 60% -20% Total-10% Eni-10% CNPC 460,000bopd 500MMscfpd SARB and Umm Lulu 60% -20% Cepsa-20% TBA 215,000 bopd Nil.