Subsidiary Of Chinese State Weapons Manufacturer Competing For 4% Stake In Abu Dhabi National Oil Corporation

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Subsidiary Of Chinese State Weapons Manufacturer Competing For 4% Stake In Abu Dhabi National Oil Corporation

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Zhenhua Oil, a subsidiary of Norinco, the Chinese state weapons manufacturer is competing with Hengli Group for a 4% stake in Abu Dhabi National Oil Corporation (Adnoc), according to an unnamed source familiar with the matter, cited by Reuters on September 5th.

The 4% stake is up for sale after CEFC China Energy has been selling debt-laden assets over the past few months as part of the Chinese Government’s plan to mitigate private sector debt, according to Reuters, citing unnamed sources.

CEFC’s creditors have over the past months been conducting sales of the debt-laden conglomerate’s global assets, including stakes in oil and gas fields in Abu Dhabi and Chad, and properties in Europe and Shanghai.

The most likely buyers appeared to be state-owned China North Industries Group Corporation (Norinco), through its subsidiary Zhenhua Oil and the Hengli Group, owned by the wealthiest man in Jiangsu, as reported by the South China Morning Post.

Norinco, a state-owned company based in the Chinese capital, is one of the world’s biggest defence contractors. It was put under sanctions for two years by the US government in 2003 for selling weapons to Iran. The company also has a non-military subsidiary in China Zhenhua Oil Corporation, which is engaged in oil exploration and production.

According to Reuters, Zhenhua Oil has been looking to expand its reserve base, however its activities had so far been focused on Iraq.

Norinco’s General Manager Yin Jiaxu visited Abu Dhabi in late April when he met with emirate’s Crown Prince Mohammed bin Zayed bin Sultan al-Nahyan to discuss military cooperation.

Also reported by Reuters, Hengli Group, parent of Hengli Petrochemical, started looking at the stake in the oilfields “recently” after supposedly being approached by the China Development Bank, which is leading a team of creditors to repay CEFC’s heavy debts after the arrest of chairman Ye Jiemin in early 2018. “(Hengli) is very cautious about venturing into a totally unfamiliar business, especially before the start-up of the (Dalian) petrochemical project,” said an executive with knowledge of the discussions, cited by Reuters.

Reuters further reported that Hengli Petrochemicals is slated to run tests on a new $11 billion refining and petrochemical complex in Dalian in October 2018. The polyester group, started up by Jiangsu province entrepreneur Chen Jianhua, has no experience in oil and gas exploration.

The unnamed source cited by South China Morning Post reported that Citic Group, the biggest among China’s state conglomerates, and a buyer of CEFC’s assets in the Czech Republic withdrew from making an offer, after having conducted due diligence on the Abu Dhabi company stake.

According to South China Morning Post, a 4% stake in Adnoc could entitle the buyer to more than 3.2 million tonnes of crude oil per year at the current level of production. If the output were to increase, the amount could reach 4 million tonnes per annum.

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  • Sinbad2

    I don’t know why they bother, the oil basins in the petrodollar kingdoms are almost dry.
    That’s why nobody wanted to buy into Aramco, and why the Saudis and the US are so desperate to steal the Yemeni oil reserves.

    • Jens Holm

      Again crap and stupid illiterate assumptions of the worst kind. You have no idea about world economy as well.

      USA is not desperate. They do as they have learned and invest in other ways of getting energy as well as cold and warm houses.

      If You just opened other pages, then those, You are indocdtrinated to, You will see 10.000s of windmill as well as solar electricity. They not even need oil for now. They take up oil from old sources, bacuse they have technology for it. They make thraking dirty oil too. And Trump insist in Alaska oil.

      Dont make Aramco to a stand alone as well as You as anyone else in the world can buy stockings in the world economy.

      You are so far out from the rest of the world. If Yemen oil was that important it was taken already. The conflict there is by the Saudi Wahabits, which prefared the old days King as a calmer for less or none devellopment. The other parts seemes to be Iran supported Shiit fundamentalisme. Not many in the world prefare that as well as what the Saudis do.

      And as far back as I remember, they have been killing each other in Yemen, which should be 2 countries too. And what do theyfight for: Well local oilgrabbing.

      You really dont get oil. All has to sell the oil for money, but the real money in several 1000% are, what You do with it making asvanced products and not some fuel.

      I can wide the perspective: Why cant You even produce cheep platic products Yourself.

      • Hisham Saber

        The U.S. is an opium addicted third world country now. With the most imprisoned people on the planet, and whole cities areas that resemble the slums of India. 80 million out of work or underemployed, millions disabled and hopelessness has set in. There is entrenched poverty everywhere.

  • Hisham Saber

    China also has a 80% stake in the Iranian South Pars natural gas field. The largest in the world. China will make sure Iran is not effected by U.S. sanctions and continues to grow, as it is also a pivotal , crucial part of China’s OBR Silk Roads. There already is a non-stop freight/cargo train running between China and Iran now.