State-run Abu Dhabi National Oil Company (ADNOC) has awarded 8% interest in Abu Dhabi’s onshore oil concession to China National Petroleum Corporation (CNPC).

As part of the 40-year deal, CNPC contributed a AED6.5bn ($1.77bn) of sign up bonus to enter the concession.

CNPC chairman Wang Yilin said: “This landmark agreement marks an important new phase in CNPC’s strategic relationship with ADNOC and we hope it will lead to further opportunities to participate in the UAE’s energy sector.

“As part of the agreement to enable the optimal, efficient and sustainable development of the concession, CNPC will play an active role in defining and developing technology applications in mature oil fields by planning to establish a tailor-made technology hub in ADCO.”

In December 2016, British oil and gas giant BP has signed a $2.2bn deal with ADNOC to buy 10% interest in Abu Dhabi’s onshore oilfield concession.

Upon completion of the latest deal, the onshore concession participants include CNPC with 8% interest, UK’s BP with 10% stake, France’s Total 10%, Inpex 5%, and GS Energy with 3% share.

ADNOC Group CEO Dr Sultan Ahmed Al Jaber said that the agreement with CNPC is expected to strengthen the strategic and economic relationship between the two countries.

“With our common vision for value add partnerships, we see tremendous opportunity in working together to optimize our energy resources, by achieving maximum economic value, in support of ADNOC’s long-term growth objectives.”

The ADCO concession comprises the Bab, Bu Hasa, Shah and Asab fields, reported Reuters.

According to estimates, the concession has total resources of 20-30 billion barrels of oil equivalent.

ADNOC said it intends to seek other potential partners for the remaining 4% stake of the 40% interest assigned for foreign oil and gas companies in the onshore concession.

Image: Officials from Abu Dhabi National Oil Company and China National Petroleum Corporation. Photo: courtesy of Abu Dhabi National Oil Company.