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ECONOMY

Japan’s Inpex renews contract in Abu Dhabi oilfield with smaller stake

  • February 26, 2018
  • , Kyodo News , 07:29 p.m.
  • English Press

Japanese energy developer Inpex Corp. said Monday it has signed a 40-year contract to extend its stake in an oilfield off Abu Dhabi, but with a smaller stake.

 

In the agreement between Inpex, Abu Dhabi National Oil Co. and Supreme Petroleum Council of the Emirate of Abu Dhabi, Inpex’ stake in the Lower Zakum oilfield will be lower than the 12 percent under the current contract that expires March 8.

 

Inpex’s stake was apparently trimmed as a 10 percent stake was newly awarded to a consortium of three Indian firms.

 

The Japanese government had sought to extend the contract at the same rate, as the UAE is the second-largest oil supplier to Japan after Saudi Arabia, providing 25 percent of the oil imported by resource-poor Japan. Abu Dhabi is also home to some 40 percent of all stakes held by Japanese companies in oil projects abroad.

 

Earlier this month, Japanese Prime Minister Shinzo Abe sought renewal of the contract by asking UAE minister of state Sultan Al Jaber, who doubles as the ADNOC chief executive officer, at their meeting in Tokyo. Foreign Minister Taro Kono also twice visited the Middle Eastern country since becoming foreign minister last August.

 

“I am satisfied and highly value that (the contract extension) was won after fierce competition,” Economy, Trade and Industry Minister Hiroshige Seko, told reporters. The minister is the top shareholder in Inpex with a stake of 18.94 percent as of March 2014.

 

Under the new arrangement, ADNOC will hold 60 percent with 20 percent set to be awarded to another company, the Japanese oil developer said. Production from the Lower Zakum oilfield is targeted at about 450,000 barrels per day.

 

Inpex also holds a 12 percent stake in the Upper Zakum oilfield off Abu Dhabi, and 5 percent in an onshore oil concession, with targeted production of 1 million and 1.8 million barrels per day, respectively.

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