Inpex of Japan has joined Total in developing the main onshore oil deposits in the UAE as Abu Dhabi calls on new partners to pump crude from its largest fields.
Japan’s state-backed energy explorer will take a 5 per cent stake in the fields, Yoichi Miyazawa, the trade minister, said at a press conference in Tokyo on Monday. The concession will give Japan access to crude from the Abu Dhabi deposits for 40 years starting January 1, 2015, Inpex said in an emailed statement.
Abu Dhabi National Oil Company, known as Adnoc, picked Inpex from at least 10 bidders to join it and Total in the venture. Inpex agreed to pay Adnoc a signing bonus of about $1.1 billion, Japan’s public broadcaster NHK reported Monday, without saying where it got the information.
The project “is highly significant in terms of the company’s growth strategies, and also largely contributes to the long-term, stable supply of energy to Japan,” Toshiaki Kitamura, Inpex chief executive, said in the statement.
Abu Dhabi holds about 6 per cent of global oil reserves. The UAE capital plans to boost crude production capacity to 3.5 million barrels a day in 2017, from about 3 million barrels a day now. Output capacity from the onshore bloc in which Total and Inpex are partners will rise to 1.8 million barrels a day by then, from about 1.6 million barrels now, according to Adnoc and Inpex.
Total, along with BP, Exxon Mobil, Royal Dutch Shell and Partex Oil & Gas, was a shareholder in the Abu Dhabi onshore oil fields, under a 75-year concession agreement that expired in January 2014. Total became the first company awarded a stake in January, getting 10 per cent of the holding. Inpex was never involved in the onshore projects until now.
Adnoc, which plans to retain 60 per cent of the partnership, asked the remaining bidders to match the $2.2 billion signing bonus Total agreed to pay for its 10 per cent share in the fields, two people with knowledge of the situation said on February 12. The company is still in talks to assign stakes to other producers, Director General Abdullah Nasser al Suwaidi said at a conference in Abu Dhabi last week.
The UAE, a member of Opec, is Japan’s second-biggest oil supplier after Saudi Arabia, according to Japan’s trade ministry. Japanese companies already have stakes in offshore deposits in Abu Dhabi and buy most of the emirate’s liquefied natural gas.
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