DUBAI/BEIJING: The Abu Dhabi National Oil Company (ADNOC) has formed a joint venture with China National Petroleum Corporation (CNPC) to develop the Gulf emirate's oil reserves, state news agency WAM said on Tuesday.
United Arab Emirates (UAE) President Sheikh Khalifa bin Zayed Al Nahyan issued a law setting up Al Yasat Company for Petroleum Operations Limited Liability Company, in which ADNOC will hold a 60 percent share and the Chinese state oil company 40 percent, WAM said.
The UAE concession system allows oil producers to acquire equity in hydrocarbon resources from the OPEC member country, with ADNOC usually holding a 60 percent stake in each joint venture.
"It's a typical concession -- meaning you pay the royalty and then you get the JV share of production," a senior source at CNPC said.
The concession award comes after state-run ADNOC and CNPC signed a strategic partnership in January 2012 to work on upstream projects in the UAE.
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