DUBAI/ABU DHABI: China National Petroleum Corp (CNPC) bought a stake in Abu Dhabi’s largest oil concession as the Middle Eastern emirate with 6% of global crude reserves looks increasingly to Asia, its biggest market, for investment to raise output capacity.

Abu Dhabi National Oil Co (Adnoc) awarded CNPC an 8% stake in the onshore venture in return for a US$1.8 billion (RM8.03 billion) signing bonus, Adnoc said in a statement. State-run CNPC is the venture’s third Asian partner, joining Japanese and South Korean companies alongside BP plc and Total SA. BP signed on to the project in December, and Total in January 2015.

Asia will show the fastest growth in energy demand over the next two decades, according to the International Energy Agency. Abu Dhabi is among Persian Gulf oil producers including Saudi Arabia and Iraq that are tapping Asia for energy investments. While European and US companies have pumped oil in the Middle East for more than a century, their Asian counterparts are relative newcomers.

“If you’re Abu Dhabi and looking for demand growth, China is the future, and its demand is going to continue to grow,” Chris Gunson, a Dubai-based lawyer at Amereller Legal Consultants, said on Sunday. “For the big buyers in Asia, the logical source of that future supply is the Gulf.”

CNPC is joining the Abu Dhabi Company for Onshore Petroleum Operations, or Adco. BP and Total each hold 10% stakes in the venture, while Japan’s Inpex Corp owns 5% and GS Energy Corp of South Korea holds 3%. Abu Dhabi plans to retain a 60% stake in Adco and is seeking an investor for the remaining 4%, Adnoc said in the statement.

Japanese companies are partners in at least four other oil-production ventures in Abu Dhabi, the largest sheikhdom in the United Arab Emirates. Korean and Chinese companies are exploring at smaller concessions in the emirate. CNPC’s engineering arm also helped build an export pipeline in Abu Dhabi. 

Elsewhere in the region, CNPC is developing Iraq’s biggest oil field, together with BP. China Petroleum and Chemical Corp is a partner in a refinery in Saudi Arabia, and Chinese firms are developing crude deposits in Iran.

With the deal announced on Sunday, CNPC secures supplies of Abu Dhabi’s main Murban crude grade in addition to what the Chinese company agreed to take in 2011 under long-term contracts. Adco’s international partners are responsible for funding their shares of investment in the deposits as well as paying signing bonuses.

Abu Dhabi is seeking to boost production capacity to 3.5 million barrels a day by 2018. Adco pumps about half of Abu Dhabi’s roughly three million barrels of daily crude output. — Bloomberg