Chinese companies are big winners in the competition among foreign bidders for stakes in Abu Dhabi's largest oil concession, snatching a combined 12 per cent of the venture as the Middle Eastern emirate looks increasingly to Asia, its biggest market, for investment.
Abu Dhabi National Oil Co. awarded a 4 per cent stake in the onshore venture -- the last share of the project that was still up for grabs -- to Shanghai-based CEFC China Energy Co., Adnoc said Monday in an e-mailed statement. CEFC is paying an US$888 million signing bonus, Adnoc said. The announcement came one day after China National Petroleum Corp. agreed to buy 8 pe rcent of the same concession for US$1.8 billion.
The dual awards mark China's debut as a major shareholder in the biggest oilfield operator in the United Arab Emirates, OPEC's fourth-largest member. Together, the stakes held by state-run CNPC and energy investor CEFC exceed the 10 per cent shares that both BP Plc and Total SA own. BP signed on to the project in December, and Total in January 2015.
Asia will show the fastest growth in energy demand over the next two decades, according to the International Energy Agency. Abu Dhabi is among Persian Gulf oil producers including Saudi Arabia and Iraq that are tapping Asia for energy investments. While European and U.S. companies have pumped oil in the Middle East for more than a century, their Asian counterparts are relative newcomers. Japanese and Korean companies are also investors with Adnoc in the deposits.
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"You can see the attraction for Abu Dhabi and for China on both sides of this deal," Richard Mallinson, an analyst with Energy Aspects Ltd. in London, said Monday by phone. "In China, Abu Dhabi sees a huge and growing importer. China's gone to great lengths to establish supply footholds, so there's a real benefit in tapping large and stable reserves."
Elsewhere in the region, CNPC is developing Iraq's biggest oil field, together with BP. China Petroleum and Chemical Corp. is a partner in a refinery in Saudi Arabia, and Chinese firms are developing crude deposits in Iran.