From July 19th to 20th, President Xi Jinping paid a state visit to the UAE. The visit is of great significance to enhancing the level of China-UAE relations, promoting the construction of the “Belt and Road†in the Gulf region, and promoting peace and stability in the Middle East. The two sides are expected to achieve a series of important achievements in the areas of “One Belt and One Roadâ€, capacity cooperation, energy and finance. The UAE and the media are highly concerned about this visit.
Dr. Sultan Ahmed Al Jaber, Minister of State of the United Arab Emirates and CEO of Abu Dhabi National Oil Company (hereinafter referred to as “ADNOCâ€), was interviewed by the 21st Century Business Herald on July 19 (written) disclose:
“On the 19th, local time, ADNOC reached a cooperation agreement with Petr Inc., a subsidiary of PetroChina (Chinese name “Oriental Geophysical Exploration Co., Ltd.â€), with a contract amount of Dh5.88 billion (approximately RMB 10.8 billion). Through the agreement, ADNOC will award an important 3D seismic reflection survey to the latter to explore the undeveloped oil and gas resources in Abu Dhabi. The two sides also intend to continue to seek more joint investment in the downstream investment field and international scope. Opportunity."
In the interview, Sultan Jabel also stressed to the 21st Century Business Herald that there is huge potential for cooperation between the company and Chinese companies in the future. “We have seen a huge partnership with companies in various industries in China. Potential, these companies will not only come from the oil and gas industry, especially when we expand into the downstream sector."
Sultan Jabel also expressed very optimistic and positive expectations about the future cooperation between China and Arab countries in building capacity of the “Belt and Roadâ€, energy and infrastructure projects. “Because of the developed port logistics capabilities, the UAE has become an important trading hub connecting Europe, Africa and Asia. Given this unique geographical location, it is believed that the UAE will play a very important role in the implementation of the Belt and Road Initiative in the future.†Tan Jabel said.
Ability to expand production to cope with crude oil shortage
"21st Century": Influenced by US sanctions, especially after the US issued a "zero tolerance" statement, Bank of America Merrill Lynch predicts that Iran's crude oil production will fall sharply in the future. "Supply shortage may rise from 500,000 barrels per day to 1 million. Bucket/Day." In your opinion, after the decline in Iranian production in the future, what is the demand gap in the international crude oil market? How will your company deal with this situation?
Sultan Jabel: As far as Abu Dhabi National Oil Company is concerned, as a reliable and trustworthy oil supplier to the oil-consuming countries, we attach great importance to this responsibility, and we fully believe in the ability of the Organization of Petroleum Exporting Countries to balance the complex supply and demand dynamics. .
According to the International Energy Agency's monthly report, the Organization of Petroleum Exporting Countries/NPOP achieved 100% compliance with the 2016 agreement in June this year. And the two sides have recently reached an agreement to clearly increase the level of production, which will obviously help the crude oil to maintain a balance between supply and demand. Here, I reiterate that we are committed to fully comply with any supply mandate set by the Organization of Petroleum Exporting Countries and the requirements for production reduction or production increase.
Currently, we plan to increase crude oil production capacity to 3.5 million barrels per day by the end of 2018. Where necessary, we also have the ability to increase crude oil production to 3.3 million barrels per day in the short term to alleviate any potential supply shortages caused by global economic turmoil.
"21st Century": What are your plans for specific production and capital expenditures?
Sultan Jabel: Although the upstream business will remain the basic and core part of our business, we also focus on developing and driving downstream business development.
In terms of developing downstream business, we plan to double our refining capacity by 2025, double the production capacity of petrochemical products to 14.4 million tons, and add new product categories.
In May of this year, we also announced that we will invest 45 billion US dollars (about 306 billion yuan) in the next five years, accounting for about 40% of the company's $109 billion (expanded) capital expenditure plan, to build the world's largest Comprehensive refining and chemical project. This investment will enable the company to further increase its profit margin and diversify and hedge its traditional business risks while increasing revenue from traditional businesses.
Great cooperation with Chinese companies
"21st Century": In 2017, PetroChina signed a "Abu Dhabi ADCO onshore oilfield development project purchase agreement" with US$1.8 billion. Can you tell us about the latest developments in the current cooperation project with PetroChina?
Sultan Jaber: In the past four years, the relationship between ADNOC and PetroChina has been significantly strengthened. In fact, our joint venture with PetroChina, Al Yasat, just witnessed the first commission of the project earlier this year and first exported petroleum products to China in May this year. In addition to the land franchise agreement obtained in February last year, PetroChina also obtained a 10% interest in the ADNOC offshore franchise through its joint stock company. This has also made PetroChina one of our largest partners. They will have a 40-year Abu Dhabi major onshore and offshore franchise interest, which can mine more than 250,000 barrels of crude oil per day.
Just as President Xi Jinping’s state visit to the UAE, we are also pleased to announce that we have recently reached a cooperation agreement with PetroChina’s subsidiary “BGP†with a contract value of more than 5.88 billion dirhams (about 10.8 billion yuan). ).
This collaboration will grant BGP a major 3D seismic reflection survey to help unearth Abu Dhabi's untapped oil and gas resources. This will be the largest contract for the three-dimensional collection operations in the history of the global geophysical industry. We will also explore more opportunities for joint investment in the downstream investment sector and internationally.
We expect that as energy continues to be an important pillar of China's strategic relationship with the UAE, our partnership with PetroChina will continue to be strengthened and developed in the coming years.
"21st Century": In addition to the above projects, what other plans can you cooperate with Chinese companies and financial institutions in the future?
Sultan Jaber: In the past two years, we have also launched a new financial, investment and partnership strategy to gain more market opportunities to enhance the company's capital structure, performance and returns.
In the above partner expansion plan, we not only hope to find partners who can help the company to better access the market and customers, but also find partners who can help the company to obtain financing, operation and technological innovation. It should be emphasized that we have already seen the great potential of our partnership with related companies in various industrial sectors in China. These companies will not only come from the oil and gas industry, especially as we expand further downstream.
"21st Century": What are the real benefits of the Middle East countries, including the United Arab Emirates, in building the "Belt and Road" and capacity cooperation?
Sultan Jaber: Both China and the United Arab Emirates firmly believe that regional economic development has important strategic significance for achieving regional security. The “One Belt, One Road†initiative proposed by President Xi Jinping in 2013 is a testament to this common worldview.
Given the unique location of the UAE in the gateway between East and West, the UAE will play a key role in the implementation of the “Belt and Road Initiative†in the future. Our port logistics capabilities are developed, especially in Dubai and Abu Dhabi, making the UAE an important trading hub connecting Europe, Africa and Asia. At present, about 60% of China's exports to the region pass through the UAE, and we expect this trade volume to expand further. In fact, the container terminal agreement reached between Abu Dhabi Port and COSCO Shipping last year will double the throughput of the port of Abu Dhabi, which will further enhance the UAE's port logistics capabilities.
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