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ADNOC Agreement With Japan’s INPEX |
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The Abu Dhabi National Oil Company, ADNOC, has signed an agreement with Japan’s INPEX Corporation awarding the company a 10 percent interest in Abu Dhabi’s offshore Lower Zakum concession. A wholly-owned INPEX subsidiary, JODCO Lower Zakum Limited, will hold and manage the interest in the concession on behalf of INPEX. The agreement, which comes into effect on 9th March and has a term of 40 years, was signed by Dr. Sultan Ahmed Al Jaber, ADNOC Group CEO and member of Abu Dhabi’s Supreme Petroleum Council, and Toshiaki Kitamura, President and Chief Executive Officer of INPEX. The INPEX’s stakes in Abu Dhabi’s Satah and Umm Al Dalkh concessions have been extended for 25 years. INPEX maintains its 40% stake in Satah and increases its Umm Al Dalkh share from 12 percent to 40 percent. INPEX has contributed a participation fee of AED2.2 billion (US$ 600 million) to enter the Lower Zakum concession, which will be managed by ADNOC Offshore, a subsidiary of ADNOC, on behalf of all concession partners. INPEX has also paid AED920 million ($250 million) to extend its interests in the Satah and Umm Al Dalkh concession. INPEX joins the ONGC Videsh-led Indian consortium as a partner in the Lower Zakum concession. 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 that the agreement with INPEX confirms 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," he said. "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, both in the Abu Dhabi Marine Areas (ADMA) concession. JODCO later 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 percent 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 percent 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 percent of the country’s requirements. ADNOC is finalising opportunities with potential partners for the remaining 20 percent of the available 40 percent stake in the Lower Zakum offshore concession earmarked for foreign oil and gas companies. |
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