The Abu Dhabi National Oil Company (ADNOC) announced the signing of an exploration concession agreement, awarding the exploration rights for Abu Dhabi’s Offshore Block 4 to Cosmo E&P Albahriya Limited, a wholly-owned subsidiary of Japan’s Cosmo Energy Holdings Co., Ltd. (Cosmo).
The award has been approved by Abu Dhabi’s newly formed Supreme Council for Financial and Economic Affairs (SCFEA) and marks the first of such awards endorsed by the SCFEA.
The award of Offshore Block 4 follows the recent exploration block awards to Occidental as well as a consortium led by Italy’s Eni and Thailand’s PTTEP.
Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, and Hiroshi Kiriyama, Group CEO of Cosmo signed the agreemented.
"This concession award builds on our long-standing relationship with Cosmo and reinforces the deep-rooted and successful strategic relationship between the UAE and Japan, ADNOC’s largest importer of oil and gas products," said Dr. Al Jaber.
"We are delighted to extend our partnership with Cosmo, particularly as this award underscores, once more, the important role of energy cooperation in enhancing economic relations between the UAE and Japan as we focus on the post-Covid recovery," he added, state news agency WAM reported.
"Cosmo was selected after a very competitive bid round. They bring expertise and understanding of our offshore environment, technology, and market access – key ingredients that underpin ADNOC’s targeted approach to strategic partnerships, which is enabling us to unlock and maximise value from our assets and resources as we continue to deliver on our 2030 strategy."
Under the terms of the agreement, Cosmo will hold a 100 percent stake in the exploration phase, investing up to $145 million (AED532 million) towards exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an offshore area of 4,865 square kilometers northwest of Abu Dhabi city.
Hiroshi Kiriyama said" "The Government of Abu Dhabi and Cosmo have a strong partnership in the oil and gas sector which we have built for more than half a century. This award represents a significant milestone for us to accelerate our upstream business in Abu Dhabi and further strengthens our seamless and multi-faceted partnership with both Abu Dhabi and ADNOC.
"We are excited to explore this promising block to unlock the hydrocarbon value by leveraging our expertise and experience. We are also certain that our success in this block can be crystallized by creating the synergies with Cosmo group’s existing oilfields and Mubarraz island which are operated by our affiliate, Abu Dhabi Oil Co., Ltd."
Bilateral economic relations between the UAE and Japan date back to 1961 when the first shipment of UAE crude oil was exported from the Umm Shaif offshore field in Abu Dhabi to Japan. Today, Japan imports approximately 30 percent of its crude oil from the UAE.