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Japan’s Inpex Corp. extended development rights for offshore oil fields in Abu Dhabi as the Middle Eastern producer seeks to replace a concession expiring next month.
Abu Dhabi National Oil Co. awarded Inpex a 10 percent stake in the Lower Zakum offshore oil field in return for a payment of $600 million. the companies said Monday. The 40-year contract starts March 9. The Japanese producer was also awarded a $250 million. 25-year extension of the Satah and Umm Al Dalkh concession and through that agreement has been awarded an additional 28 percent interest in the Umm Al Dalkh oil field. they said.
Adnoc Extends East
Abu Dhabi`s state producer awards stake to Inpex as it seeks new contracts for 3 oil blocks
The deal is the third in as many weeks for the government of the largest sheikhdom in the United Arab Emirates. Spanish refiner Cia Espanola de Petroleos SA paid $1.5 billion for a 20 percent stake in the Sateh Al Razboot and Umm Lulu fields in a deal announced Feb. 18. and a group of Indian companies paid $600 million for rights to 10 percent of the Lower Zakum field on Feb. 10. Japan is the largest buyer of oil from Abu Dhabi. followed by India.
“We have been involved in this project for 45 years.“ Hiroshi Fujii. Inpex’s managing executive officer. told reporters in Tokyo. Lower Zakum is the largest of the fields for which Abu Dhabi is offering partnership rights and has a target output capacity of about 450.000 barrels a day. Inpex said in its statement. without providing a date for the production goal.
The field has “huge reserves and production“ with “very low“ production costs. Fujii said. without providing details. Inpex was also awarded a 25-year extension of the Satah and Umm Al Dalkh concession and through that agreement has been awarded an additional 28 percent interest in the Umm Al Dalkh oil field. the companies said. That takes Inpex’s stake to 40 percent at both fields with Adnoc holding the rest.
Asia Bound
Oil-rich states in the Middle East are looking increasingly to Asia. their biggest market. for funds to help build energy infrastructure and for opportunities to tap into growing demand. Oil prices that have recovered to nearly $70 a barrel now. from about half that just two years ago. are driving state-owned and private producers to look at new developments.
The Japanese company is the first of the partners in the present offshore concession to renew its holding in the deposits. The other partners with Adnoc in the venture that expires March 8 are Total SA and BP Plc. Adnoc has split that single concession into three blocks. giving it the opportunity to bring in a broader list of international partners. Adnoc will maintain a 60 percent holding in all the fields.
Adnoc said it is seeking to close contracts with other potential partners for remaining stakes in those fields. The third concession comprises the Nasr and Umm Shaif fields and Adnoc hasn’t awarded any stakes for that area yet.
