Abu Dhabi National Oil Company (Adnoc) has appointed Japan’s Inpex Corporation as the leader of an offshore asset in which it was awarded a stake in February, the companies said on Monday.
Inpex, through the newly-established Jodco Lower Zakum entity, will oversee the ramp up in production capacity at the offshore Lower Zakum field from 300,000 barrels per day to 450,000 bpd over the next 10 years. It will operate the concession along with France’s Total, China National Petroleum Corporation and an Indian consortium led by ONGC Videsh.
“As a long-standing shareholder in both Lower Zakum and Upper Zakum, Inpex is in a unique position to leverage synergies between both concessions, including the utilisation and optimisation of infrastructure, to enhance operational efficiencies, enable substantial cost savings, and create greater value for the benefit of both partners,” said Dr Sultan Al Jaber, Adnoc group chief executive and UAE Minister of State.
The UAE accounts for around 6 per cent of the global oil production, much of it from Abu Dhabi, and supplies more than a quarter of Japan’s crude imports. Adnoc, under a new partnership model this year has invited companies from its main oil importing nations including Japan, China and India besides European majors to jointly develop offshore concessions, with the Abu Dhabi firm retaining 60 per cent interest.
In February, Inpex paid a total of $850 million for its 40-year interest in Lower Zakum as well as for an extension by 25 years of its interests in the Salah and Umm Al Dalkh fields. Its interest in Umm Al Dalkh was increased to 40 per cent from 12 per cent, under the deal.
The Japanese firm last year also entered into an agreement with ExxonMobil to boost production from Upper Zakum to a million bpd by 2024.
The announcement of Inpex taking the lead on Lower Zakum follows the visit of Japanese prime minister Shinzo Abe to the UAE capital on Monday.
Japan, the world's fourth-largest oil consuming nation after the US, China and India, according to the BP Statistical Review of World Energy, has been an early stakeholder in the development of Abu Dhabi's oilfields.
Adnoc first partnered with Japan Oil Development Company (Jodco), wholly-owned by Inpex, to develop Upper Zakum in 1977. The offshore field, discovered the same year, is the second-largest in Abu Dhabi and the fourth-largest in the world. The US oil major ExxonMobil joined Adnoc and Jodco to develop the field in 2006, when plans were drawn up to boost production capacity to 750,000 bpd from 500,000 bpd.
On Sunday, Adnoc signed the last of the offshore pacts with Austria’s OMV, which paid $1.5 billion in participating fees for stakes in two offshore concessions.
The UAE and Japan also deepened their longstanding ties on Monday with a number of commitments, especially in areas that can help the UAE diversify its economy away from oil revenues.
The Japan External Trade Organisation arranged a morning of presentations by senior executives from some of the biggest Japanese industrial companies, including Koji Kakigi, the president and chief executive officer of JFE Steel, and Shunichi Miyanaga, the chief executive of Mitsubishi Heavy Industries.
“Both sides highly praised the increased volume of trade between the two countries and stressed the importance of further enhancing trade, investments and business such as renewable energy, sustainable water desalination, advanced robotics, artificial intelligence, health care and medical equipment, aerospace and advanced vehicles,” the governments of Japan and the UAE said in a joint statement, following the trade summit.