Joint energy projects already underway between China and the United Arab Emirates (UAE) are showing promise, with more projects expected in the near future.
During Chinese President Xi Jinping's upcoming visit to the UAE, the two sides are expected to announce more diverse ventures in the energy sector.
In May this year, the first China-Arab oil upstream cooperation project was completed at the UAE's Port of Das Island.
The project was launched by Al Yasat, which was formed by China National Petroleum Corporation (CNPC) and Abu Dhabi National Oil Company (ADNOC) in 2013, and was approved by the UAE government in 2014.
"The approval was followed by a precipitous drop in oil prices. By the end of 2014, 2015 and even 2016, oil prices fell to 30 to 40 U.S. dollars [a barrel]. The profits are far from what we expected when [we] reevaluated this project," said Guo Yueliang, Abu Dhabi country manager at CNPC.
Despite the lower profits, CNPC moved forward with the project and continued to optimize investment plans to access the UAE market.
"We went through five rounds of program optimization to reduce investment costs from the original estimate by about 30 percent. The project was reassessed at low oil prices and the benefits met the requirements of China National Petroleum Corporation," said Guo.
In February 2017, CNPC signed a land block cooperation project which contains a large-scale oilfield with ADNOC, with a daily production of about 1.6 million barrels.
Apart from that, CNPC is also working with other oil companies like BP and Total.
"Chinese oil and gas companies are very much now involved more and more in the exploration and production and export of oil and gas. This is very strategic. It's one of the few possibilities that's been provided for foreign companies to be able to come and go into this very important sector for us," said Sultan Bin Saeed Al Mansoori, the UAE's Minister of Economy.
Moreover, CNPC took 10 percent stakes in two Abu Dhabi offshore projects in March this year that will have a duration of 40 years.
Sources:xinhua
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