Chinese Cnooc Enters Abu Dabhi Concessions

State-run Abu Dhabi National Oil Company (Adnoc) has agreed to transfer rights in its Lower Zakum and Umm Shaif and Nasr offshore concessions from China National Petroleum Corp to Cnooc, it said July 27. The transfer has been approved by Abu Dhabi’s Supreme Petroleum Council.  

“The transfer of concession rights to another key Chinese company reinforces the strong and strategic bilateral ties between the United Arab Emirates and the world’s second-largest economy, China,” Adnoc said. The transfer comprises of Cnooc acquiring a 40% interest in CNPC’s majority-owned subsidiary PetroChina Investment Overseas (Middle East). 

PetroChina holds a 10% interest in the Lower Zakum concession, an oil play; and a 10% interest in the Umm Shaif and Nasr concession, which hold gas and condensate. 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 India’s ONGC Videsh-led consortium (10%), Japan’s Inpex (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.