Abu Dhabi National Oil Company (ADNOC) has appointed a subsidiary of Japan’s Inpex Corporation to manage its Lower Zakum offshore concession.
The agreement, signed during the second day of Japanese Prime Minister Shinzo Abe’s visit to the UAE, comes following Inpex’s securing of a 10 per cent interest in the field in February for $600m.
“This agreement further strengthens the economic relationship between the UAE and Japan, which is founded on the established and mutually beneficial partnerships in the energy sector,” said ADNOC group CEO Sultan Al jabber.
Inpex’s JODCO Lower Zakum subsidiary will lead the development of the Lower Zakum field to achieve the concession objectives, build up and sustain production targets and achieve agreed recovery rates and cost optimiaation goals, ADNOC said.
“Inpex will devote its human and technical resources to achieving production targets, deploying enhanced oil recovery technology most suitable for Lower Zakum, reducing development and production costs and supporting transfer of technical knowledge,” said Inpex president and CEO Toshiaki Kitamura.
“And, as the only IOC partner participating in both the Lower and Upper Zakum oil fields, we will continue to seek synergies between the two oil fields.”
Inpex has been involved in Abu Dhabi’s oil and gas industry since 1973 through the ADMA concession. The company also has a 12 per cent stake in ADNOC’s Upper Zakum concession and a 5 per cent stake in the ADCO onshore concession.
Under the February deal, the firm extended its stakes in the Satah and Umm Al Dalkh concessions for 25 years, maintaining a 40 per cent stake of the former and increasing its share in the latter from 12 per cent to 40 per cent, at a cost of $250m.
Lower Zakum is one of three new separate concessions that make up the former ADMA offshore concession, under a split designed to maximum commercial returns.
Other shareholders include China National Petroleum Corporation, an Indian consortium, led by ONGC Videsh, Italy’s ENI and France’s Total. ADNOC retains a 60 per cent stake in the field.
The UAE meets 25 per cent of Japan’s crude oil requirements and ADNOC said its was “keen to deepen its ties and partnerships with Japan’s energy and petrochemical sectors, particularly in the downstream”.
The state oil firm said it was also exploring opportunities to tap into Japan’s experience with artificial intelligence, big data and predictive analytics.