AKIPRESS.COM - State-owned China National Petroleum Corporation (CNPC) has agreed a landmark deal with Abu Dhabi government in production of oil.

Abu Dhabi, the most influential member of the United Arab Emirates (UAE), holds about 98bn barrels of proven oil reserves and is an important member of the Organization of Petroleum Exporting Countries.

The emirate has traditionally held close relationships with Western international oil companies (IOC) but experts say this latest deal will challenge the historic status quo that has existed for 40 years.

"This is a very important deal for UAE and China relations," Oliver Klaus a Dubai-based energy expert with Gulf Intelligence told the Telegraph. "It highlights the shift towards Asia by Abu Dhabi."

State authorities said Tuesday that President Sheikh Khalifa bin Zayed Al Nahyan had approved a law setting up the Al Yasat Company for Petroleum Operations, which will see Abu Dhabi National Oil Company (Adnoc) hold ac 60pc stake alongside CNPC with 40pc in the venture.

The deal will see an IOC gain access to both onshore and offshore concessions under one operating company in Abu Dhabi for the first time. The agreement has been years in the making and comes after CNPC signed a strategic partnership in 2012 to work on upstream projects in the emirates.