China Huaxin Energy Co., Ltd. signed an agreement with the government of Abu Dhabi and the state oil company of Abu Dhabi (ADNOC) to acquire 4% interest in the land lease contract block of Abu Dhabi. It is the first time that a Chinese company has taken part in equity interests in an onshore oil and gas block in Abu Dhabi.
Dr Sultan ahmed abdul-jabbar, UAE minister of state and CEO of Abu Dhabi national petroleum corporation, and Mr Ye jian, chairman of China huaxin board of directors signed the agreement.
Under the agreement, China huaxin would receive a 4 per cent interest in the project, with annual output of more than 3.2m tonnes and a stable peak of more than 4m tonnes a year.In addition, China huaxin has reached a long-term crude oil supply agreement of 10 million tons per year with ADNOC, which can provide a stable supply of quality crude oil of over 13.2 million tons per year for the Chinese market.
It is reported that the land lease contract block is located in the lubhari basin where oil and gas are abundant in the Middle East.The contract within the block oilfield is the biggest block, Abu Dhabi has developed so far accounted for about half of the country's oil and gas reserves and production, and in the golden age of increasing production, new wells yield is high, the production cost is low, the current daily output of about 1.6 million barrels, equivalent to the annual output of 80 million tons, in 2017 the project output will increase to 1.8 million barrels, and plan in the next five years to improve oil production to more than 2 million barrels, and continuously stable yield.The contract block is jointly operated, and China huaxin will participate in the decision-making and management of oilfield production, among which total of France and bp provide technical support, adopt high standard production and operation procedures and norms, and the oilfield production and management level is world-class.
As a strategic partner, China huaxin has established a stable cooperative relationship with ADNOC in recent years.In the future, the two sides will further promote the linkage between the upstream and downstream energy markets of China, the Middle East and Europe, and carry out the interactive cooperation between ABU dhabi and the Chinese market in the fields of finance and infrastructure construction.This time, China huaxin has become a shareholder of ADCO, and acquired long-term stable interest in crude oil. It has expanded the company's oil and gas upstream in the Middle East region, and established the company's position in the international upstream oil and gas field.In the future, the company will further expand the oil and gas terminals in Europe and the upstream resources investment in the Middle East, central Asia and Africa, and integrate and promote the cooperation between the upstream abroad, the terminal market and the domestic oil reserves and the refining capacity, so as to enhance the international competitiveness of the company.