Sources say that China's Zhenhua Oil has doubled its crude oil purchases from the UAE as part of a new agreement.
Three Chinese sources claim that China's Zhenhua Oil will double its oil purchases from Abu Dhabi National Oil Co, to 200,000 barrels a day. This is after the company took on a new leadership role in developing one of Abu Dhabi's most important oilfields.
Sources said that in January, China's smallest state oil company replaced TotalEnergies, a French major, after a bid process for the asset leadership of Bu Hasa, United Arab Emirates' largest onshore oilfield.
Sources said that Zhenhua, with its new role as the company responsible for the development of Bu Hasa and for meeting production and cost goals, has also agreed to a new deal annually from ADNOC in order to receive 5 million additional tons or 100,000 bpd.
Zhenhua’s involvement in Bu Hasa and the offtake agreement, which was finalised around April this year, were not previously reported. The sources declined to name themselves as they weren't authorised to speak with the media.
One of them stated that the total amount of crude Zhenhua contracted to receive will be increased to 200,000 bpd around the end of this year.
Zhenhua & TotalEnergies have not responded to our requests for comment. ADNOC stated that it will not comment on any commercial issues.
ADNOC opened a Beijing office in April to explore investment opportunities with Chinese partners.
Zhenhua, a state-owned defense conglomerate, was founded in 2003 and specializes in oil and gas production in countries outside China. It has assets in Iraq and Pakistan.
Zhenhua secured a 4% share in ADNOC’s onshore giant concessions. This puts them alongside other heavyweights such as BP, TotalEnergies, and CNPC.
Zhenhua will become more active in trading the main Murban grade of Abu Dhabi with increased offtake. Sources said that the company, which has trading desks in Beijing, Singapore and Abu Dhabi, will hire its first crude trader this month. Reporting by Chen Aizhu, Additional reporting in Dubai by Yousef SABA; Editing and Tony Munroe by Jan Harvey.
(source: Reuters)
