ADNOC has entered into an agreement for the transfer of rights in its Lower Zakum and Umm Shaif and Nasr offshore concessions from the China National Petroleum Corporation (CNPC) to China National Offshore Oil Corporation’s subsidiary CNOOC Limited.

The transfer has been approved by Abu Dhabi’s Supreme Petroleum Council (SPC) and marks the first time that a dedicated Chinese offshore oil and gas company joins ADNOC’s concessions, ADNOC said in a statement on Monday.

ADNOC explained that the transfer comprises of CNOOC acquiring (through its holding company, CNOOC Hong Kong Holding Limited (CNOOC HK)), a 40 per cent interest in CNPC’s majority-owned subsidiary PetroChina Investment Overseas (Middle East) Ltd (PetroChina).

Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said: “The transfer of part of CNPC’s share in two of ADNOC’s major offshore concessions to CNOOC reflects the long-standing strategic and economic bilateral relations between the UAE and China, and highlights the continued pull of the UAE as a leading global energy and investment destination, backed by a stable and reliable business environment.”

PetroChina holds a 10 per cent interest in the Lower Zakum concession and a 10 per cent interest in the Umm Shaif and Nasr concession.

As a result of the transfer, CNOOC will hold a 4 per cent interest in the Lower Zakum concession and a 4 per cent interest in the Umm Shaif and Nasr concession, while PetroChina will retain a 6 per cent stake in the concessions.

Dai Houliang, Chairman of CNPC, said: “We will leverage the strengths of the two Chinese companies, which will help reinforce the development of these two 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 liquified natural gas (LNG).

CNOOC joins an ONGC Videsh-led consortium (10 per cent), INPEX Corporation (10 per cent), CNPC (6 per cent), Eni (5 per cent), and Total (5 per cent) as participants in the Lower Zakum concession; and Eni (10 per cent), Total (20 per cent), and CNPC (6 per cent) as participants in the Umm Shaif and Nasr concession. ADNOC retains a 60 per cent majority ownership interest in both concessions.