ZhenHua Oil subsidiary buys 4% stake in Adnoc onshore concession

China ZhenHua Oil’s subsidiary North Petroleum International Company has purchased a 4% interest in Abu Dhabi National Oil Company’s (Adnoc) onshore oil concession in the UAE.

The acquired interest was previously owned by CEFC China Energy Company. Adnoc awarded the 4% stake in the concession to CEFC last year.

CEFC sold its stake as part of a sale of its assets after the company’s chairman Ye Jianming was arrested by the Chinese Government earlier this year over corruption allegations.

Operated by Adnoc Onshore, the concession is 60% owned by Adnoc. Other participants in the concession include BP (10%), Total (10%), China National Petroleum (CNPC) (8%), Inpex (5%), and GS Energy (3%).

It covers 14 oilfields located in the Rub’ al Khali Basin in the Middle East. Oil production from the block is expected to increase to 2Mbpd over the next four years.

Adnoc Group CEO Dr Sultan Ahmed Al Jaber said: “China ZhenHua Oil’s acquisition of the 4% stake in the onshore concession underlines the continued pull of the United Arab Emirates as a leading global energy and investment destination, backed by a strong, stable and secure commercial environment.

“With China ZhenHua Oil, we will pursue mutually beneficial cooperation, share business growth opportunities and work together as we deliver on our 2030 smart growth strategy.”

Established in 2003, China ZhenHua Oil is an oil and gas exploration and production division of state-owned defence firm Norinco with operations in several countries, including Egypt, Myanmar, Kazakhstan and Iraq.

With an annual gross production of around ten million metric tonnes, ZhenHua Oil is engaged in fuel storage, transportation and refining business.