- Region: The Middle East
- Energy and Natural Resources
- Others
May 1, 2007
- Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Shinozawa) signed on April 29 a memorandum of understanding with Abu Dhabi National Oil Company (ADNOC), a state-run oil company wholly owned by the Abu Dhabi government. The signing of the MOU, which took place in Abu Dhabi during Prime Minister Abe's visit to UAE, is referred to in the Joint Communiqué between the Prime Minister of Japan and the President of UAE as part of the financial cooperation package.
- This MOU seeks to establish a comprehensive and strategic partnership between JBIC and ADNOC by setting out consultations and information sharing on such issues as investment plans of ADNOC as well as JBIC's lending schemes. It will increase opportunities of mutual business development for Japanese companies and ADNOC in the oil and gas sector, and realize the long-term crude oil transaction between ADNOC and Japanese oil companies, thereby contributing to the securing of stable energy supply to Japan.
- ADNOC, which conducts oil and gas business in the Emirate of Abu Dhabi, and owns most of the oil and gas reserves and production facilities in UAE. Abu Dhabi is abundantly endowed with highly versatile quality light crude oil, and Japan has steadily imported huge amounts of crude oil from ADNOC for more than 30 years. Currently, UAE is the second largest source of crude oil supply to Japan, accounting for about 25% of Japan's total crude oil imports. UAE is also one of the few countries in the Middle East that allow inflow of foreign companies on the basis of concession agreements, and several Japanese companies are currently operating oil and gas production business in the country. In this way, UAE plays the key role for Japan to secure stable energy supply. Strengthening ties with ADNOC, a core agency in the energy sector, has therefore an extreme significance.
- Japan's Basic Energy Plan, which was revised in March this year, emphasized again, as strategic approach for securing stable supply of oil and other energy sources, "to strengthen strategic and comprehensive ties with the countries endowed with natural resources". The signing of this MOU is in line with this government policy, and will strengthen the relationship not only between JBIC and ADNOC but also between Japan and UAE, which is strategically important to Japan for its energy security.