Inpex Corp. of Japan joined Total SA in developing the main onshore oil deposits in the United Arab Emirates as Abu Dhabi calls on new partners for its $22 billion effort to pump crude from its largest fields.
Japan’s state-backed energy explorer will take a 5 percent stake in the fields, Yoichi Miyazawa, the trade minister, was quoted by Bloomberg as saying at a press conference in Tokyo Monday. The concession will give Japan access to crude from the Abu Dhabi deposits for 40 years starting Jan. 1, 2015.
Abu Dhabi National Oil Co. known as Adnoc picked Inpex from at least 10 bidders to join it and Total in the venture. Inpex agreed to pay Adnoc a signing bonus of about $1.1 billion.
The project “is highly significant in terms of the company’s growth strategies, and also largely contributes to the long-term, stable supply of energy to Japan,” Toshiaki Kitamura, Inpex chief executive officer, said.
Abu Dhabi, the UAE’s largest emirate, holds about 6 percent of global oil reserves. The UAE capital plans to boost crude production capacity to 3.5 million barrels a day in 2017, from about 3 million barrels a day now. Output capacity from the onshore bloc in which Total and Inpex are partners will rise to 1.8 million barrels a day by then, from about 1.6 million barrels now, Adnoc and Inpex said.
Adnoc is spending about $22 billion on projects to increase onshore oil and gas production and export capacity, Omar Suwaina Al Suwaidi, the company’s deputy director for strategy, said at a conference in Abu Dhabi on Nov. 11. The concession encompasses the fields of Bab, Bu Hasa, Sahil, Asab, Qusahwira, Mender, Al Dabb’iya, Rumaitha and Shanayel, Adnoc said Monday. Total, along with BP Plc, Exxon Mobil Corp., Royal Dutch Shell Plc and Partex Oil & Gas, was a shareholder in the Abu Dhabi onshore fields, under a 75-year concession agreement that expired in January 2014. Total became the first company awarded a stake in January, getting 10 percent of the holding. Inpex wasn’t involved in the onshore projects until now.
Adnoc, which plans to retain 60 percent of the partnership, asked the remaining bidders to match the $2.2 billion signing bonus Total agreed to pay for its 10 percent share in the fields, two people with knowledge of the situation said Feb. 12.
