Adnoc, Inpex sign new Dh2.2B concession deal
dubai — Abu Dhabi National Oil Co (Adnoc) signed on Monday a new 40-year agreement with Inpex, awarding the Japanese oil giant a 10-per cent stake in its Lower Zakum concession for a fee of Dh2.2 billion.
The concession deal, the third signed by the oil major this month, is set to help the UAE expand its foothold in Asia.
Separately, both companies also signed an agreement to extend Inpex’s stakes in Abu Dhabi’s Satah and Umm Al Dalkh concession for 25 years.
As per the deal, Japanese oil company will maintain its 40 per cent stake in Satah concession and increase its Umm Al Dalkh share to 40 per cent from 12 per cent, both companies said in statements. The new concession is the third awarded by Adnoc this month.
On February 18, Adnoc signed a Dh5.5 billion offshore concession agreement with Spanish company Cepsa, which is wholly owned by Abu Dhabi’s Mubadala Investment Company.
On February 10, Adnoc awarded a 10 per cent interest in its Lower Zakum offshore concession to a consortium of Indian companies led by ONGC Videsh in a Dh2.2 billion deal that marks the first hydrocarbon rights agreement between the emirate and a country that is forecast to become the world’s fastest-growing oil consumer.
Inpex has paid a fee of Dh2.2 billion for the Lower Zakum concession, and also paid Dh920 million to extend its share in the Satah and Umm Al Dalkh concession.
“Adnoc aims to seize new opportunities from increasing energy demand in Asia’s expanding economies,” chief executive Dr Sultan bin Ahmad Sultan Al Jaber said in a statement. “This agreement demonstrates the international market’s confidence in Adnoc’s longterm production targets and our plans to maximise value from our offshore resources,” he said.
The UAE provides Japan with 25 per cent of its crude oil imports. The agreement has a term of 40 years and an effective date of March 9, Adnoc said. Inpex becomes the second company to win a stake in the Lower Zakum offshore oil concession, after a consortium led by India’s ONGC became the first to sign the pact earlier this month.
In August 2017, Adnoc said it would split its Adma-Opco offshore concession into three areas — Lower Zakum, Umm Shaif and Nasr, and Sateh Al Razboot and Umm Lulu — with new terms to unlock greater value and increase opportunities for partnerships. The existing Adma-Opco concession, in which Adnoc has a 60 per cent stake that it will keep, produces around 700,000 barrels per day of oil and is projected to have a capacity of about one million bpd by 2021.
Existing shareholders in AdmaOpco are BP with 14.67 per cent, and Total with 13.33 per cent. Japan Oil Development Co (Jodco), which is owned by Inpex, had originally owned a 12 per cent stake in the concession.