BEIJING/DUBAI: Privately-run CEFC China Energy is in advanced talks to secure a stake to develop onshore oilfields in the United Arab Emirates under a 40-year deal, two industry sources with knowledge of the discussions said on Monday.
CEFC is in discussions with state-owned Abu Dhabi National Oil Co. (Adnoc) to try to acquire 10 per cent of the Abu Dhabi Company for Onshore Petroleum Operations (Adco), one of the sources said. Adco operates onshore oil concessions with total resources of between 20 billion and 30 billion barrels of oil equivalent.
The source added that it was not clear how much of a stake CEFC would ultimately win, but estimated a 10 per cent stake would cost around $2.2 billion (Dh8.08 billion).
ADNOC said on Saturday it struck a $2.2 billion deal with BP for a 10 per cent stake in the Adco concession.
Adnoc is also discussing stake sales with other Asian companies from China, India and South Korea as well as European companies like Shell and Statoil, the sources said.
A spokesman for Adnoc, which holds 60 per cent in the concession, said: “Discussions with a number of international partners are ongoing for the remaining 12 percent stake in the Adco onshore concession.”
A CEFC spokesman said he was unable to comment immediately.
The ADCO concession, including the Bab, Bu Hasa, Shah and Asab fields, produces 1.6 million barrels per day (bpd) of oil, with output expected to reach 1.8 million bpd from 2017. The UAE produced 3.1 million bpd in November, according to a Reuters survey.
Total was the first oil major to renew the concession, securing a 10 per cent stake in January 2015 and putting its peers under pressure to improve terms after ADNOC said the French company made the best offer.
The companies bid for the Adco fields after the old concession expired in January 2014.
Little-known CEFC has over the past couple of years lined up preliminary oil production deals in Kazakhstan, Russia and West Africa. In September it closed its first upstream acquisition in Chad for $110 million.
