ADNOC open for business

In February 2017, CNPC was awarded a minority stake in the UAE's onshore oil reserves and in March of this year CNPC, through its majority-owned subsidiary PetroChina, was also granted a 10 percent interest in each of the Umm Shaif and Nasr and Lower Zakum offshore concessions. In addition, CNPC has been awarded a substantial engineering, procurement and construction contract enabling ADNOC to sustain and grow production capacity from its giant Bab field, in support of the company's production capacity target of 3.5 million barrels of oil per day by the end of 2018.

Further opportunities for cooperation with China's upstream energy sector have been opened up with the announcement of a new licensing strategy, which will see six offshore and onshore exploration, development and production blocks made available for competitive bidding.

"The release of the six blocks for competitive bidding represents a rare and exciting opportunity to invest in the UAE's stable and secure exploration and production sector, as we accelerate delivery of a more profitable upstream business and generate strong returns for the UAE," said Sultan Ahmed Al Jaber, CEO of ADNOC.

In the downstream area, market expansion in China is an important part of ADNOC's international growth strategy, as the company ramps up refining and petrochemical capacity in response to expanding demand, particularly in Asia.

Today, China is the largest export customer in Asia for Borouge, a joint venture between ADNOC and Austria's Borealis. This accounts for over one million tons per year of polyolefins, equal to one third of all sales worldwide. Borouge's compound manufacturing plant in Shanghai produces up to 90,000 tons of value-added polymer compounds annually for China's automotive industry.

To support its downstream objectives, ADNOC will invest $45 billion with partners to transform Ruwais into the world's largest fully integrated refining and petrochemicals complex. Planned projects include a world scale, mixed liquid feedstock Naphtha cracker, as well as investments in new refinery capacity that will enable ADNOC to expand its petrochemical production three-fold to 14.4 million tons per annum by 2025.

According to Al Jaber this investment, along with planned growth in its upstream operations, will lead to valuable new partnerships that will add a new layer to the UAE's strategic relationship with China. "Our growth plans will allow partners who contribute finance, share technology and knowledge and facilitate market access to invest and benefit, with us, from the growing demand for energy, particularly in Asia," Al Jaber said.

As ADNOC begins the next phase of its transformation, the message is clear – ADNOC is open for business, and existing Chinese partners and newcomers are welcome to join it in further developing the UAE's significant hydrocarbon resources for long-term mutual benefit.