Abu Dhabi: Chinese companies are expected to gain stakes in Abu Dhabi’s onshore oil concession operated by Adco, the Abu Dhabi Company for Onshore Petroleum Operations (Adco), as ties between the two strengthen, analysts say.

Privately run Chinese firm CEFC China Energy is in advanced talks to secure a stake to develop onshore oilfields, according to a report by Reuters this week.

“While the deal with BP shows that Abu Dhabi wants to continue its relationship with traditional partners, as we have seen with Inpex and GS Energy, from Japan and Korea, respectively, Abu Dhabi wants to broaden its strategic outreach to other partners. It seems likely that Abu Dhabi will choose a Chinese partner for the remaining stake,” Justin Dargin, an energy expert at Oxford University, told Gulf News.

“China is an important trading partner for Abu Dhabi and allowing one of its energy companies to own stakes in Adco would serve to advance Abu Dhabi plan to engage more fully with China.”

On Saturday, the Abu Dhabi government awarded a 10 per cent stake to British Petroleum for a 2 per cent stake in the British company valuing about $2.2 billion.

BP joins other companies like French oil giant Total, South Korea’s GS energy and Japan’s Inpex Corporation as shareholders of the prestigious onshore oil concessions for forty years.

So far, 28 per cent of the concession has been awarded with 12 per cent still remaining for the potential partners. China National Petroleum Corporation, Shell, Norway’s Statoil and Italy’s ENI have bid for the concessions and are waiting for the decision from Abu Dhabi government.

Dargin, however, noted that Chinese oil companies do not have the expertise and technology for output maximisation that Western companies have but the leading choice would be a Chinese energy company because of growing ties between the two countries.

According to Chinese Embassy in Abu Dhabi, UAE is China’s second largest trading partner and the largest export market in the Middle East and North African region, and an important trading hub for Chinese products.

The total bilateral trade between the two countries totalled about $48.55 billion in 2015 and foreign direct investment from China to the UAE amounted to $390 million from January to September this year.

The UAE also granted visa on arrival facility for Chinese nationals in September this year in order to boost trade and tourism. There is also a concession agreement with the China-based Cosco Shipping Ports Limited to build and operate a terminal at Khalifa Port for 35 years.

Last year, His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, visited China and the two countries signed a number of agreements opening a new chapter in the bilateral relations between the two countries.

Adnoc, which holds 60 per cent in the concession, said discussions with a number of international partners are ongoing for the remaining 12 per cent stake in the Adco onshore concession.

Indian government too evinced keen interest to take part in Adco concession. India’s Petroleum Minister Dharmendra Pradhan told Gulf News earlier this year four Indian energy companies are bidding for the remaining onshore oilfield concession but did not provide full details.