UAE’s leading oil firm Abu Dhabi National Oil Company (ADNOC) has awarded 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 Company.
Under the terms of the deal, Cosmo will hold a 100 percent stake in the exploration phase, investing up to $145 million (Dh532 million) towards exploration and appraisal drilling, including a participation fee.
The award has been approved by Abu Dhabi’s newly formed Supreme Council for Financial and Economic Affairs (SCFEA) and this marks the first of such awards endorsed by the SCFEA.
The exploration concession agreement further enhances the long-standing partnership of Abu Dhabi with Cosmo, as well as the strategic bilateral relationship between the UAE and Japan. 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 PTTEP in Thailand.
“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. 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. 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 maximize value from our assets and resources as we continue to deliver on our 2030 strategy.”
Hiroshi Kiriyama, Group CEO of Cosmo 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,” commented Mr. Kiriyama.
According to the reports, Cosmo will have the right to production concession to develop and manufacture those commercial discoveries following the successful commercial discovery during the exploration process.
ADNOC has the option to hold a 60 percent stake in the production phase of the concession. The duration of the development process is 35 years from the beginning of the exploration phase, and the block provides the potential to create significant in-country value for the UAE over the lifespan of the concession, the oil company added.