International Finance
Oil & Gas

After India, Adnoc enters China to explore oil and gas investments

Adnoc and China's Cnooc will assess opportunities for partnerships and co-investments in the LNG sector

UAE’s state-controlled Abu Dhabi National Oil Company (Adnoc) and the China National Offshore Oil Corporation (Cnooc) signed a framework agreement this week to explore strategic oil and gas investments in upstream and downstream sectors. 

Under the terms of the agreement, both companies have mutually agreed to exchange knowledge, best practices and advanced technologies in ultra-sour gas development, local media reported. 

They will also explore opportunities in LNG purchase and sales, while simultaneously exchanging specific knowledge and expertise in these markets. Additionally, Adnoc and Cnooc will assess other opportunities for partnerships and co-investments in the LNG sector. 

Dr Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc Group CEO, told the media, “This far-reaching framework agreement underpins the close economic ties between the UAE and China, and offers exciting new growth opportunities as well as mutually beneficial investment initiatives between Adnoc and Cnooc, while enabling wider potential for strategic collaboration in both the upstream and downstream.”

The UAE represents 4 percent of the world’s crude production, which is largely produced from fields owned and operated by Adnoc in Abu Dhabi. 

Before entering China through Cnooc, Adnoc, in the last two years, has broadened the scope for its strategic partnership and joint investment across several areas of value chain. Adnoc aims to increase its oil production capacity to 5 million barrels per day by 2030.

Half of China’s oil imports are produced from the Middle East, where there are significant activities carried out in hydrocarbon production and exploration. Yang Hua, chairman of Cnooc, said, “The agreement will further deepen China’s energy cooperation with countries along the Belt and Road route, building a closer community of shared future in the energy sector.”

Last month, the state of Maharashtra in India identified a new site for Adnoc-Aramco’s joint development of a $44 billion oil refinery which will be located at Raigad district. The new joint venture called Ratnagiri Refinery is expected to produce 1.2 million barrels per day. Aramco and Adnoc will own 50 percent stake in the refinery, while the remaining stake will be acquired by Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation.

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