By Daniel Fineren and Chen Aizhu
DUBAI/BEIJING, April 29 China National Petroleum
Corporation (CNPC) has secured the rights to produce and export
oil from Abu Dhabi, helping China secure more fuel for its rapid
State-run CNPC has expanded over the past decade to over 30
countries around the globe to help secure supplies of the oil
and gas that China needs to sustain its economic growth.
Under the latest deal granted by the president of the United
Arab Emirates (UAE), China's biggest energy company will help
develop several onshore and offshore fields in Abu Dhabi and
take a share of any oil produced, UAE state news agency WAM
"It's a typical concession, meaning you pay the royalty and
then you get the JV (joint venture) share of production," a
senior source at CNPC told Reuters.
The UAE concession system allows oil companies to acquire
equity in hydrocarbon resources, with state-run Abu Dhabi
National Oil Company (ADNOC) holding a 60 percent stake in each
joint venture and foreign partners usually sharing the other 40
Under the new joint venture, called the Al Yasat Company
for Petroleum Operations, the Chinese energy giant will be the
sole foreign partner with 40 percent, and ADNOC will hold the 60
percent controlling stake.
The new concession comes after ADNOC and CNPC signed a
strategic partnership in January 2012 to work on upstream
projects in the UAE.
The joint venture will drill for crude and build the
processing and transport infrastructure needed to export it,
WAM reported, without giving details on the fields covered by
the new concession.
Western oil and gas giants Exxon Mobil, Royal Dutch
Shell, Total and BP have been the
dominant foreign players in the UAE concession system for
But in the 50 years since they made the first commercial UAE
oil discoveries, western oil use has waned, while demand in Asia
Asian energy companies are keen to take stakes in fields
that mostly supply the Asian market, and some in Abu Dhabi say
the Gulf OPEC member should allow more Asian companies to help
run its fields.
When the concession for Abu Dhabi's biggest onshore fields
expired early this year, Abu Dhabi was unable to agree whether
to stick with the four western oil giants that had been running
ADNOC has been forced to take full control of the Abu Dhabi
Company for Onshore Oil Operations (ADCO) while authorities
weigh decide whether to extending the deal with western
companies or welcome in new Asian oil companies.
The CNPC agreement has no direct impact on any of the
decades-old concessions. But it is another sign that the
government is seeking to cement political and commercial ties
with its biggest customers in Asia.
"It really shows that Abu Dhabi is clearly pivoting towards
Asia," Valerie Marcel, associate fellow of energy at the Royal
Institute of International Affairs in London, said.
"It doesn't mean that the old partners won't get anything,
but it does point once more to the fact that their gaze is
(Writing by Daniel Fineren; editing by Jane Baird)