Amid the Covid-19 crisis, china has signed an oil deal with ADNOC, a UAE-based oil company, media reports said. The move by china marks a strong presence in the offshore oil business.
The deal comes at a time when ADNOC plans to transfer its owner ship rights of the offshore concessions from the existing holding of the China National Petroleum Corporation (CNPC) to CNOOC Limited, an arm of China National Offshore Oil Corporation’s (CNOOC). The oil fields are located in the following sectors: Lower Zakum, Umm Shaif and Nasr.
As a part of the agreement, CNOOC will acquire 40 percent stake through its holding company CNOOC Hong Kong Holding Limited (CNOOC HK) in CNPC’s majority-owned subsidiary, PetroChina Investment Overseas (Middle East). The deal is expected to be approved Abu Dhabi’s Supreme Petroleum Council (SPC).
Once the deal is finalised, CNOOC will join a consortium comprising oil companies such as Japan’s INPEX Corporation, India’s ONGC Videsh, China’s CNPC, and Italy’s Eni. In addition, CNOOC will also join another consortium in the Umm Shaif and Nasr concession comprising Eni and CNPC where majority of the stakes will be acquired by CNOOC.
It’s surprising to see how China’s oil company has taken the step amid the Covid-19 crisis where majority of the oil companies in Saudi Arabia have been struggling to make profits and recover deficits. The move by China will also strengthen ties with oil companies in the UAE which are looking for international opportunities during the pandemic.