China strikes deal with Adnoc on Abu Dhabi oil exploration



China is set to secure oil exploration rights in Abu Dhabi, giving the world’s top oil importer access to one of the world’s most stable oilproducing countries.

China National Petroleum Company has established a joint venture with Adnoc to develop crude in the emirate, the state news agency Wam said without specifying any concessions that have been awarded. Since 2012, CNPC has been appraising the technical potential of five onshore and two offshore undeveloped blocks covering much of the area west of Abu Dhabi’s legacy fields.

For China, the award marks a breakaway from its role as a cheap go-to for construction projects – such as the Fujairah pipeline that bypasses the Strait of Hormuz – and a producer willing to go where others did not dare: Iraq, Sudan, Afghanistan.

“The real strength of Chinese upstream oil companies is that they appear to have an unlimited appetite for political risk,” said Chris Gunson, an oil and gas lawyer at Pillsbury in Abu Dhabi. “In Abu Dhabi there is no political risk, which means that everyone can get involved and the margins are extremely low.

“So when you think about why China would want to be involved, it’s an interesting diversification away from politically messy places to one of the most stable and reliable producers.”

The new joint venture, which has been named Al Yasat and will be 40 per cent owned by CNPC, comes as Abu Dhabi ponders the future of its legacy contracts and its relationships with western powers.

A source with knowledge of Abu Dhabi’s oil industry said that it would be “extremely unlikely” that Al Yasat would be given fields that are already producing oil but instead would be awarded riskier, less developed assets.

The legacy players – Total, ExxonMobil, BP, Partex and Royal Dutch Shell – lost the rights to an onshore concession responsible for half of the emirate’s output at the end of its 75-year run in January.

Since it began producing oil half a century ago, Abu Dhabi has gradually diversified its partners, bringing in the Japanese) and Austria’s OMV, Germany’s Wintershall, and Korea National Oil Company.

Adnoc even floated the possibility of granting small fields to Mubadala Petroleum, the government-owned company that explores for oil and gas outside the country, in an agreement signed late last year.

New partners must be approved by the Supreme Petroleum Council, the emirate’s top energy decision-making body that includes members of the ruling family. aAmong the considerations are technical skills as well as alignment with the world’s growing economic and political powers in Asia.

CNPC had originally hoped to launch drilling in Abu Dhabi in early 2013, but progress on Abu Dhabi-China energy cooperation stalled as delays arose with the strategic Fujairah pipeline built by a CNPC subsidiary.

The pipeline, which allows all of the emirate’s current onshore production to bypass the Strait of Hormuz bottleneck by connecting to Fujairah, was plagued by technical problems stemming from late payments.

“Adnoc is very happy with their Chinese partner,” Suhail Al Mazrouei, the Minister of Energy, said late last year. “They are keen on the exploration and doing the work in the ground to test their credibility on the ground, rather than just being a partner.”

Adnoc is expected to send its recommendation for the onshore concession, operated by Abu Dhabi Company for Onshore Oil Operations (Adco), to the Supreme Petroleum Council within weeks.

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Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
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WHAT IS GRAPHENE?

It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were experimenting with sticky tape and graphite, the material used as lead in pencils.

Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But when they repeated the process many times, the flakes got thinner.

By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment led to graphene being isolated for the very first time.

In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. 

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AT4 Ultimate, as tested

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Gertrude Bell's life in focus

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At one point, two feature films were in the works, but only German director Werner Herzog’s project starring Nicole Kidman would be made. While there were high hopes he would do a worthy job of directing the biopic, when Queen of the Desert arrived in 2015 it was a disappointment. Critics panned the film, in which Herzog largely glossed over Bell’s political work in favour of her ill-fated romances.

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Books, letters and archives

Two biographies have been written about Bell, and both are worth reading: Georgina Howell’s 2006 book Queen of the Desert and Janet Wallach’s 1996 effort Desert Queen. Bell published several books documenting her travels and there are also several volumes of her letters, although they are hard to find in print. Original documents are housed at the Gertrude Bell Archive at the University of Newcastle, which has an online catalogue.
 

UAE v Gibraltar

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Online: The match will be broadcast live on Dubai Exiles’ Facebook page

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Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

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On sale: Later in 2025 or early 2026, depending on region

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Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
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ARSENAL

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SPAIN

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How much sugar is in chocolate Easter eggs?
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Name: Brendalle Belaza

From: Crossing Rubber, Philippines

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Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.