Inpex renews Abu Dhabi offshore oil field concession

February 27, 2018

Tokyo- Japan's Inpex Corp. said Monday that it has signed a 40-year agreement granting it a 10 pct interest in the Lower Zakum oil field concession off Abu Dhabi in the United Arab Emirates.

Inpex concluded the deal on Sunday with the Supreme Petroleum Council of the Emirate of Abu Dhabi and Abu Dhabi National Oil Co. for 600 million dollars, winning development rights in the oil field that will last until March 8, 2058.

The company's interest in the Lower Zakum concession will decline from 12 pct under the existing contract, which expires next month.

Speaking to reporters, however, industry minister Hiroshige Seko appreciated the new deal, saying that Inpex managed to win the largest stake as a single company after severe competition.

Inpex has participated in the Lower Zakum project since 1973. In the latest negotiations, Inpex competed with at least 14 companies, including Chinese and Indian firms.

The Japanese company also concluded a 25-year extension of its interests in the Satah and Umm Al Dalkh oil fields concession, also off Abu Dhabi, which had been set to expire next month.

Taking into account production growth in another offshore oil field and a large onshore oil field in which it has interests, Inpex's overall stakes in Abu Dhabi oil fields are seen increasing to some 280,000 barrels per day by the mid-2020s from 250,000 barrels.

The UAE is the second-biggest crude oil supplier to Japan, following Saudi Arabia.

Oil produced in fields off Abu Dhabi accounts for some 40 pct of the crude oil developed abroad by Japanese companies. Japan would lose more than 60 pct of its Abu Dhabi offshore output without the renewal of the existing concession deals.

In the negotiations, Seko repeatedly visited Abu Dhabi. Prime Minister Shinzo Abe had telephone talks with Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed Al Nahyan to ask for support for oil interest renewals.

Abu Dhabi is believed to have welcomed Japan's offer to help the Middle East country diversify its oil operations and to cooperate in the fields of education, medicine and agriculture. Jiji Press