The Abu Dhabi National Oil Company (ADNOC) has awarded 10 per cent interest in Abu Dhabi’s offshore Lower Zakum concession to Japan’s Inpex Corporation (INPEX)
Under the agreement, a wholly-owned INPEX subsidiary, JODCO Lower Zakum Limited, will hold and manage the interest in the concession on behalf of INPEX.
The agreement will come into effect on 9 March 2018 and has a term of 40 years, said ADNOC. At the same time INPEX’s stakes in Abu Dhabi’s Satah and Umm Al Dalkh concession have been extended for 25 years. INPEX maintains its 40 per cent stake in Satah and increases its Umm Al Dalkh share from 12 per cent to 40 per cent.
INPEX has contributed a participation fee of US$600mn to enter the Lower Zakum concession, which will be managed by ADNOC Offshore, a subsidiary of ADNOC, on behalf of all concession partners. INPEX has also paid US$250mn to extend its interests in the Satah and Umm Al Dalkh concession.
Lower Zakum is one of three new separate concession areas that make up the former ADMA offshore concession, which is being split into three separate concession areas to maximise commercial value, broaden the partner base, expand technical expertise and enable greater market access.
Dr Sultan Ahmed Al Jaber, CEO of ADNOC Group, said that the agreement with INPEX aims to underscore the important strategic economic relationship between the UAE and Japan.
“For more than 40 years, INPEX, along with its subsidiary JODCO, has been a strategic partner to Abu Dhabi and ADNOC. Together with our other partners, it has played an important role in the development of our offshore and onshore oil and gas assets. This agreement extends that long-standing partnership between one of the world’s leading oil and gas resource holding countries and the third largest global economy and represents an attractive and strategic opportunity for both parties that will deliver mutual benefits.”
“As we accelerate delivery of our 2030 smart growth strategy, ADNOC aims to seize new opportunities from increasing energy demand in Asia’s expanding economies. Once again this agreement demonstrates the international market’s confidence in ADNOC’s long-term production targets and our plans to maximise value from our offshore resources,” he added.
JODCO's involvement in the oil and gas industry in Abu Dhabi started in 1973 with its participation in the Umm Shaif and the Lower Zakum fields, within the Abu Dhabi Marine Areas (ADMA) concession. Apart from its stake in the Lower Zakum concession, INPEX has a 12 per cent stake in ADNOC’s Upper Zakum concession. In November 2017, the Upper Zakum concession partners announced an agreement to increase production capacity of the oil field to one mmbbl per day by 2024.
