Page 8 - AsianOil Week 07 2021

AsianOil EAST ASIA AsianOil

ADNOC strengthens Japan ties,

awards Block 4 to Cosmo

PROJECTS & ABU Dhabi National Oil Co. (ADNOC) last
COMPANIES week awarded exploration rights for Offshore
Block 4 to the local subsidiary of Japan’s Cosmo
Energy as part of the emirate’s second competi-
tive bid round.
As has become the pattern for ADNOC,
the Japanese company, which is the majority
owner of Abu Dhabi Oil Co. (ADCO) and is
predominantly known as a refining specialist,
was awarded a 100% stake in the exploration
phase. It will also hold rights to the develop-
ment and production phases of any successful
commercial discovery, at which point ADNOC
has the option to take its customary 60% share.
The contract was signed for a term of 35 years,
with Cosmo agreeing to spend up to $145mn
on exploration and appraisal drilling, including
a participation fee, across the 4,865-square km acreage in the north-west, including the produc-
offshore concession. ing Mubarraz and Hail oilfields.
The deal follows similar agreements in Meanwhile, in January, subsidiary Cosmo Oil
December with US-based Occidental Petro- Co. agreed a deal with ADNOC and ICE Futures
leum for onshore Block 5 and with a consortium Abu Dhabi (IFAD) to explore opportunities to
of Italy’s Eni and Thailand’s PTT Exploration and link crude pricing with reference to the new
Production (PTTEP) for Offshore Block 3. ICE Murban Crude Oil Futures. Meanwhile,
As with those agreements, ADNOC noted last year, Japan’s Agency for Natural Resources
that Cosmo would “leverage and contribute and Energy signed a deal to store more than
financially and technically” to the ongoing mega 8mn barrels of ADNOC crude, expanding and
seismic survey currently being carried out by extending a deal that had lapsed a year earlier.
China National Petroleum Corp. (CNPC) geo- Cosmo is also not the first Japanese firm
physical specialist subsidiary BGP. The scope of to have success in ADNOC’s recent conces-
the 3D onshore and offshore survey was recently sion auctions. In 2019, ADNOC awarded the
expanded from around 53,000 square km to Onshore Block 4 to Japan’s Inpex following the
82,000 square km, taking the total value of the 2018 licensing round, with the company’s wholly
contract to $2.12bn. owned JODCO Exploration subsidiary holding
ADNOC added: “The data already acquired rights to the 6,116-square km area, which runs
over a large part of [Offshore Block 4], combined parallel to the offshore concession.
with its proximity to existing oil and gas fields, Meanwhile, the countries’ partnership has
suggests the concession area has promising expanded beyond oil in recent months and
potential.” The acreage is located north-west of Al Jaber noted that the latest award “under-
Abu Dhabi city. scores, once more, the important role of energy
co-operation in enhancing economic relations
Strong bonds between the UAE and Japan as we focus on the
The deal was signed by HE Dr. Sultan Ahmed post [coronavirus (COVID-19)] recovery”.
Al Jaber, the UAE’s Minister of Industry and Last month, ADNOC and Japan’s Ministry of
Advanced Technology and ADNOC Group Economy, Trade and Industry (METI) agreed to
CEO, and Cosmo CEO Hiroshi Kiriyama, with collaborate on initiatives in fuel ammonia and
both alluding to their “strong” and “long-stand- carbon recycling as Tokyo seeks to shore up a
ing relationship”. blue ammonia supply chain.
Al Jaber said: “This concession award builds A memorandum of co-operation was signed
on our long-standing relationship with Cosmo by ADNOC’s Al-Jaber and METI Minister Hiro-
and reinforces the deep-rooted and successful shi Kajiyama during the UAE’s virtual business
strategic relationship between the UAE and trip to Japan.
Japan, ADNOC’s largest importer of oil and gas The announcement follows comments made
products.” a week earlier by METI director-general of oil,
Cosmo-led ADCO has the accolade of own- gas and mineral resources Ryo Minami that
ing the sole upstream concession in Abu Dhabi Japan is planning to develop a supply chain of
to be wholly owned by foreign shareholders, blue ammonia produced from natural gas “pos-
holding the rights to several portions of offshore sibly” in the Middle East by the late 2020s.™

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