Abu Dhabi National Oil Company (ADNOC) said it awarded a 10 per cent stake in offshore Lower Zakum concession to Japan’s INPEX for AED 2.2 billion (US$ 600 million).
Abu Dhabi National Oil Company (ADNOC) said it awarded a 10 per cent stake in offshore Lower Zakum concession to Japan’s INPEX for AED 2.2 billion (US$ 600 million).
A wholly-owned INPEX Corporation subsidiary, JODCO Lower Zakum Limited, will hold and manage the interest in the concession on behalf of INPEX. ADNOC, which awarded a 10 per cent stake in the same concession to ONGC Videsh-led Indian consortium, will hold 60 per cent and operatorship in the concession. It has yet to award the remaining 20 per cent in the 40-year concession, which into effect on March 9.
ADNOC said it also agreed to extend INPEX’s stakes in Abu Dhabi’s Satah and Umm Al Dalkh concession for 25 years. INPEX maintains its 40 per cent stake in Satah and increases its Umm Al Dalkh share from 12 per cent to 40 per cent. INPEX has also paid AED 920 million ($250 million) to extend its interests in the Satah and Umm Al Dalkh concession.
Dr Sultan Ahmed Al Jaber, ADNOC Group CEO and member of Abu Dhabi’s Supreme Petroleum Council signed the agreement with Toshiaki Kitamura, president and chief executive officer of INPEX.
Lower Zakum is one of three new separate concession areas that make up the former ADMA offshore concession, which is being split into three separate concession areas to maximise commercial value, broaden the partner base, expand technical expertise, and enable greater market access.
Dr Al Jaber said the agreement with INPEX underscores the important strategic economic relationship between the United Arab Emirates and Japan. “For over 40 years, INPEX, along with its subsidiary JODCO, has been a strategic partner to Abu Dhabi and ADNOC. Together with our other partners, it has played an important role in the development of our offshore, and onshore, oil and gas assets. This agreement extends that long-standing partnership between one of the world’s leading oil and gas resource holding countries and the third largest global economy, and represents an attractive and strategic opportunity for both parties that will deliver mutual benefits.
“As we accelerate delivery of our 2030 smart growth strategy, ADNOC aims to seize new opportunities from increasing energy demand in Asia’s expanding economies. Once again this agreement demonstrates the international market’s confidence in ADNOC’s long-term production targets and our plans to maximise value from our offshore resources.”
JODCO's involvement in the oil and gas industry in Abu Dhabi started in 1973 with its participation in the Umm Shaif and the Lower Zakum fields, within the Abu Dhabi Marine Areas (ADMA) concession. JODCO joined in the development of three other offshore oil fields, the Upper Zakum field in 1977, Umm Al Dalkh in 1978 and Satah in 1980. Successful production from these three fields began during the 1980s. INPEX became the sole shareholder in JODCO in 2004.
Kitamura said: “This agreement ensures INPEX continues to enjoy access to significant, competitive and reliable resources that we understand very well. The agreement results, in part, from the unwavering long-term partnership that INPEX has built and maintained with Abu Dhabi over more than 40 years, and demonstrates INPEX’s long-term commitment to the further development of Abu Dhabi’s energy industry over the next several decades.”
As well as its stake in the Lower Zakum concession, INPEX has a 12 per cent stake in ADNOC’s Upper Zakum concession. In November, the Upper Zakum concession partners announced an agreement to increase production capacity of the oil field to 1 million barrels per day by 2024.
In 2015, INPEX acquired a 5 per cent participating interest in the ADCO Onshore Concession, now operated by ADNOC Onshore.
Japan is heavily reliant on crude oil imports from the Middle East, with the UAE providing 25 per cent of the country’s requirements.
Source: Pipeline ME
