The Strategist

China bought 8% in Abu Dhabi's largest oil company

02/20/2017 - 13:53

China National Petroleum Corporation (CNPC) on Sunday bought an 8% share in Abu Dhabi National Oil Company (ADNOC), the biggest concession for production of hydrocarbons on the land, for $ 1.8 billion.

basrawii via flickr
basrawii via flickr
Chinese state company CNPC became the third Asian partner of the oil company, along with Japan and South Korea. In addition, among the partners are listed British BP (joined in December) and French Total (got in early in 2015).

"This will be a mutually beneficial partnership that will allow us to maintain a high level of production", - said Executive Director of ADNOC Sultan Ahmed Al Jaber.

CNPC is the largest oil and gas producer and supplier of Asia. The company accounts for more than half of the oil production in China and 71% of natural gas production.

According to Bloomberg referring to forecast of the International Energy Agency (IEA), Asia will experience the fastest growth in energy demand in the next two decades.

Abu Dhabi is one of the major oil producers in the Persian Gulf, including Saudi Arabia and Iraq. Recall that the two country are going to attract Asian companies to invest in the energy sector.

Net profit of China National Petroleum Corporation (CNPC), the largest oil and gas producer in China, in 2016 can number nearly 35.65 billion yuan ($ 5.1 billion). This is 70% lower than in 2015, according to the company's website.

Negative dynamics is explained by fall in hydrocarbon prices and sluggish demand in the oil and gas markets. The company encountered particular difficulties in the first six months, when price of oil fell below $ 30 per barrel.

Last year, the company produced 260 million tons of hydrocarbons, including 192 million tons of oil. Sales volume of refined oil reached 172 million tons and 139 billion cubic meters of gas.

As previously reported, CNPC also recorded the decrease in profit in 2015. Then, the figure decreased by 52% compared to 2014 - up to $ 12.7 billion.

ADNOC is the largest in the UAE and 11th in the world oil production company. Every day, its enterprises are extracting 3.1 million barrels of oil, according to Forbes magazine. Size of recoverable reserves of this raw material in the United Arab Emirates takes the seventh place in the world.