Japan's Cosmo Wins UAE Drilling Rights
Japanese oil firm Cosmo has won an exploration concession for the Offshore Block 4 off the UAE, Abu Dhabi's national oil company Adnoc reported on February 10.
Cosmo will have a 100% share of the project during the exploration phase, spending up to $145mn on drilling and a participation fee. If a commercial discovery is made, Cosmo will have a right to a production concession lasting up to 35 years. Adnoc will have the option to take a 60% stake in the project at this stage.
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Cosmo won rights to the 4,865-km2 area northwest of Abu Dhabi after a bidding round, kicked off in May 2019. The round also led to Italy's Eni and Thailand's PTTEP securing a concession for the Offshore Block 3 last December, and US firm Occidental Petroleum obtaining rights to the Onshore Block 5 in the same month.
Cosmo is already an investor in Abu Dhabi's upstream sector, through its stakes in Abu Dhabi Oil Co and Bunduq Co. Last month it signed an agreement with Adnoc and ICE Futures Abu Dhabi on potentially pricing oil with reference to the new ICE Murban Crude Oil Futures.
Japan is the biggest buyer of Adnoc's oil and oil products, obtaining around 30% of its crude from the UAE. In January last year, Adnoc agreed with Japan's agency for natural resources and energy on the storage of over 8mn barrels of oil in Japan. In the previous year, Adnoc awarded exploration rights to Japan's Inpex for the Onshore Block 4.
(banner image courtesy of Adnoc)