The Abu Dhabi National Oil Company, ADNOC, today signed a Strategic Framework Agreement with China National Offshore Oil Corporation, CNOOC, to explore new opportunities for collaboration in both the upstream and downstream sectors as well as in Liquefied Natural Gas, LNG.
The exchange of the signed agreement was witnessed by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Xi Jinping, President of the People’s Republic of China.
The agreement was signed by Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Yang Hua, Chairman of CNOOC.
ADNOC and CNOOC have also agreed to share knowledge, best practices and latest proven technologies in the area of ultra-sour gas development with the aim of improving operational efficiency in sour gas processing and treatment; delivering efficiency, performance, and reliability for sour gas drilling operations; and improving field and reservoir development plans.
The parties will furthermore consider including Offshore Oil Engineering Co., (COOEC) as a qualified contractor for engineering, procurement and construction opportunities, and China Oilfield Services as a qualified supplier of oilfield services and explore potential opportunities to collaborate with both companies in existing and future offshore oil and gas field assets in Abu Dhabi.
In addition, they have agreed to jointly explore potential LNG sales and purchase opportunities, sharing specific knowledge and expertise in LNG markets, and evaluate potential partnerships and joint-investment opportunities across the entire LNG value chain.
In the downstream space, ADNOC and CNOOC have agreed to analyse the potential of certain mutually beneficial business opportunities, including the potential collaboration in new integrated refining and petrochemical assets in China; cooperation in CNOOC’s existing refining assets; as well as a broader partnership and joint-investment across the refining and petrochemical value chain.
Commenting on the partnership, Dr. Al Jaber said, "This far-reaching framework agreement underpins the close economic ties between the UAE and China, and offers exciting new growth opportunities as well as mutually beneficial investment initiatives between ADNOC and CNOOC, while enabling the wider potential for strategic collaboration in both the upstream and downstream.
"The future collaboration opportunities agreed today with CNOOC reinforce ADNOC’s strategic approach to partners that offer technology, capital or market access to maximise value from Abu Dhabi’s vast oil and gas resources. In addition, the collaboration opportunities underpin our 2030 smart growth strategy as well as our focus on key economies and Asian growth markets such as China."
In turn, Hua stated, "The agreement will further deepen China’s energy cooperation with countries along the Belt and Road route, building a closer community of shared future in the energy sector. Both CNOOC and ADNOC will embrace broadened opportunities for future cooperation and enjoy the fruit of this mutually-beneficial partnership."
The agreement, he noted, is of great significance for CNOOC to promote the development of its overseas oil and gas business, to diversify import resource and to optimise the integrated industrial chain of upstream, mid and downstream. CNOOC will continue to implement the Belt and Road Initiative, strengthen energy cooperation and contribute more value to the China-Arab friendship as well as regional development.
Over the last two years, ADNOC has significantly expanded its strategic partnership and co-investment model and created new investment opportunities across all areas of its value chain, while at the same time, more proactively managing its portfolio of assets and capital.
ADNOC’s planned oil production capacity increase to five million barrels per day by 2030, its drive towards gas self-sufficiency and becoming a potential gas net exporter, as well as its substantial downstream expansion plans, offer new opportunities for international partnerships.
As part of its downstream ambitions, ADNOC will create greater flexibility, resilience and product diversity, as it optimizes its performance and stretches the dollar from every barrel of oil it produces. In addition, the company’s downstream strategy will also act as another catalyst for Abu Dhabi’s economic growth and diversification plans, attracting new foreign and domestic investment, creating numerous specialised employment and career opportunities, and significantly boosting ADNOC’s in-country value creation initiatives.
China is the world’s second-largest economy and largest oil importer, with the UAE representing one of the key suppliers. While China grows its domestic refining capacity and fills its strategic inventories, the country continues to secure global crude supplies.
ADNOC continues to focus on its downstream expansion in China and Asia, where demand for petrochemicals and plastics, including light-weight automotive components, essential utility piping, and cable insulation, is forecast to double by 2040.