Adnoc strikes strategic agreements with Japan

The pacts build on partnership that goes back to 1962

The world needed another 10 million bpd of oil production according to Adnoc group chief executive Dr Sultan Al Jaber. Adnoc

The Abu Dhabi National Oil Company (Adnoc) signed several agreements with Japan, which imports quarter of its crude from the group, that put in place a framework for cooperation on strategic business development; upstream technical cooperation; and training and development programs for company employees.

"The long-term energy partnership between Japan and the UAE is one that goes back to before the establishment of Adnoc, with Japanese companies playing, and continuing to play, an important role in the development and expansion of the country's oil and gas industry," Dr Sultan Al Jaber, Minister of State and Adnoc Group CEO said in a statement.

The memorandum of cooperation agreements were signed with Japan's ministry of economy, trade and industry (Meti) and the Japan Oil, Gas and Metals National Company.

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"Today we are strengthening that partnership by pursuing new opportunities that will help us unlock greater value from our resources," Dr Al Jaber said. "This is a clear example of how our expanded approach to partnerships presents unique opportunities for both new and existing partners to invest alongside Adnoc to capture growth opportunities and deliver future prosperity."

Adnoc has supplied Japan with oil, gas and refined products since its foundation in 1971. The company is Japan's second-largest supplier of crude oil and a major provider of gas and refined products. In 2016, Adnoc's crude oil exports to Japan averaged 513,000 barrels per day, or 25 per cent of Japan's crude oil imports.

In January, Japan's Meti extended its agreement with Adnoc to store crude oil at the Kiire Oil Terminal, in Kagoshima City, for two years. Under the deal, Adnoc can store up to 6.29 million barrels of crude oil, providing the UAE company with greater access to Asian markets while giving Japan priority access to reserves in times of tight supply.

The tie-up "marks a new phase in Japan's long and successful relationship with Adnoc, an important and valued energy supplier," said Hiroshige Seko, Japan's minister of economy, trade and industry. "We believe the changing oil and gas market dynamics require a smart response, one based on long-term, value add partnerships that create new opportunities and drive economic growth."

The UAE began shipping oil to Japan in 1962, from Abu Dhabi's offshore Umm Shaif oilfield. Since then, Japanese companies have partnered with Adnoc to develop the emirate's oil and gas resources with the Japan Oil Development Company (Jodco) having a 40 per cent share of the Satah concession; 12 per cent of the Umm Al Dalkh concession and 12 per cent of the Upper Zakum concession, operated by Zadco.

In addition, Jodco has a 12 per cent share of the Adma concession and 5 per cent of the Adco concession and Mitsui has a 15 per cent share of the Adgas joint venture.

Adnoc's Japanese partners also contribute to the company's training and research and development programmes.