July 20 (UPI) -- The state oil company in Abu Dhabi said it signed contracts with a Chinese counterpart to carry out the world's largest surveys for new hydrocarbon reserves.
The Abu Dhabi National Oil Co. awarded a subsidiary of China National Petroleum Co. with a $1.6 billion contract to conduct seismic surveys covering about 20,000 square miles onshore and offshore. ADNOC said that makes it the largest survey of its kind in the world.
"The scale of the project shows ADNOC's commitment to upstream investment and to bolstering our oil and gas reserves and production for the long-term," ADNOC CEO Ahmed al-Jaber said in a statement.
ADNOC in April opened its first bidding round to gain access to billions of barrels of oil and trillions of cubic feet in gas, after signing agreements with Asian energy companies, Italian major Eni and French supermajor Total.
ADNOC estimates that, based on existing field data, the blocks up for grabs "hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas. "Nearly all of the Emirati reserves are in Abu Dhabi. Four blocks onshore and two offshore are on the auction block with the close set for October. The conclusion, with formal result announcements, is expected by the end of the year.
"The award, following a highly competitive bid process, also represents another key milestone in ADNOC's thriving partnership with CNPC, and the UAE's strategic energy partnership with China," Jaber added.
Chinese foreign direct investment is up slightly to 3.6 percent. The country has the second-largest economy of the world, behind the United States, though growth is on pace to slow slightly in the years ahead.
The United Arab Emirates is a member of the Organization of Petroleum Exporting Countries. Secondary sources reported to OPEC economists said June production averaged 2.8 million barrels per day, down from the 2016 average of 2.97 million bpd.
Most of the focus for seismic surveys would be offshore. ADNOC's deal was signed on the eve of a Friday visit to the UAE by Chinese President Xi Jinping.