Adnoc’s crude supply to China’s Zhenhua Oil is set to double to 200k bbl/d after Zhenhua took over as lead developer of the UAE’s largest onshore oilfield, Bu Hasa, Reuters reports citing three Chinese industry sources. The company already receives 100k bbl/d offtake as an equity holder in Adnoc Onshore, after securing a 4% stake in its onshore concession in 2018, joining BP, TotalEnergies, and CNPC.

The details: Zhenhua Oil — the smallest of China’s state oil companies — will handle Bu Hasa’s development plan, production, and cost targets after replacing TotalEnergies as asset leader following a bidding process last January, the sources reportedly said. The combined 200k bbl/d of contracted crude is expected to be reached by year-end, Reuters said, citing one of the sources.

The offtake agreement, which should be reached by year-end, was finalized in April, according to the sources. Zhenhua is set to expand its trading footprint in Abu Dhabi’s flagship Murban crude and will post its first crude trader in Abu Dhabi this month, Reuters added citing the sources.

China is already digitizing the field: Adnoc has awarded a USD 920 mn contract to Chinese Jereh Oil & Gas Engineering Corporation in November for the digitization of over 2k oil wells at its Bab, Bu Hasa, and Southeast fields. Slated for completion by 2027, the program aims to boost operational efficiency and optimize the performance of the wells through remote monitoring.

Not just oil: Adnoc has signed a long-term LNG supply agreement with Zhenhua Oil last April for a supply of up to 12 cargoes annually with deliveries benchmarked to the Japan Korea Marker and Brent oil prices.

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