ABU DHABI -- The Abu Dhabi National Oil Company (ADNOC) has signed an agreement appointing JODCO Lower Zakum Limited, a wholly-owned subsidiary of Japan’s INPEX Corporation (INPEX), as the asset leader for Abu Dhabi’s Lower Zakum concession area.
The agreement, which was announced on the second day of a visit to the UAE by His Excellency Shinzo Abe, Japan’s Prime Minister, was signed by H.E. Dr. Sultan Ahmed Al Jaber, ADNOC Group CEO and member of Abu Dhabi’s Supreme Petroleum Council, and Toshiaki Kitamura, president and CEO of INPEX.
In February, INPEX was awarded 10% interest in Abu Dhabi’soffshore Lower Zakum concession. At the same time the company’s stakes in Abu Dhabi’s Satah and Umm Al Dalkh concession were extended for 25 years. INPEX also maintained its 40% stake in Satah and increased its Umm Al Dalkh share from 12% to 40%.
As asset leader, JODCO will lead the development plans to achieve the concession objectives, including building up and sustaining production targets, achieving agreed recovery rates and cost optimization targets.
Lower Zakum is one of three new separate concession areas that make up the former ADMA offshore concession, namely Lower Zakum, Umm Shaif and Nasr and Satah Al Razboot (SARB) and Umm Lulu. The restructuring of concessions is aimed at maximizing commercial value, broadening the partner base, expanding technical expertise, and enabling greater market access.
Other international shareholders in the Lower Zakum concession area are the China National Petroleum Corporation, an Indian consortium, led by ONGC Videsh, Italy’s ENI and France’s Total. ADNOC retains a majority 60% stake in the concession.
The UAE and Japan enjoy a close and longstanding political, economic and trade relationship and strong bilateral economic relations, particularly in the oil, gas and petrochemical sectors. Around one-quarter of Japan's crude oil imports come from the UAE, making the country Japan's second-largest source of petroleum.
INPEX’s involvement in the oil and gas industry in Abu Dhabi started in 1973 with its participation in Umm Shaif and Lower Zakum fields, within the Abu Dhabi Marine Areas (ADMA) concession. They joined in the development of three other offshore oil fields, Upper Zakum field in 1977, Umm Al Dalkh in 1978 and Satah in 1980. Successful production from these three fields began during the 1980s. Today, the UAE provides 25% of Japan’s crude requirements.
On the occasion of Prime Minister Abe’s visit to Abu Dhabi, ADNOC and INPEX celebrated the long-standing relationship between Japan and the UAE, with a ‘Japan Day’ at ADNOC’s headquarters, where a traditional Japanese tea ceremony, Japanese calligraphy and origami were presented.
As it accelerates its 2030 growth strategy, ADNOC is keen to deepen its ties and partnerships with Japan’s energy and petrochemical sectors, particularly in the downstream, as the company embarks on its plans to triple production of petrochemicals and increase its refining capacity by 2025 in response to growing demand from high-growth Asian economies. ADNOC is also exploring opportunities to tap into Japan’s experience with artificial intelligence, big data and predictive analytics.