Loan for Extending Interests in Offshore Oil Field in Abu Dhabi
Contributing to Stable Supply of Energy Resources for Japan
- Region: The Middle East
- Energy and Natural Resources
- Overseas Investment Loans
The Japan Bank for International Cooperation (JBIC; Governor: Tadashi Maeda) signed on October 26 a loan agreement totaling up to USD150 million (JBIC portion) with Japan Oil Development Co., Ltd. (JODCO). The loan is co-financed with the Mizuho Bank, Ltd., the MUFG Bank, Ltd., and the Sumitomo Mitsui Banking Corporation, bringing the overall co-financing amount to USD250 million.
This loan is intended to finance the extension of interests held by JODCO, a subsidiary of INPEX CORPORATION (INPEX) in the Satah and Umm Al-Dalkh offshore oil fields located in the Emirate of Abu Dhabi, the United Arab Emirates. On March 2018, JODCO was awarded a 25-year extension of interests from the Abu Dhabi Supreme Petroleum Council (SPC) for these oil fields. March of this year marked the end of the interest period for the Satah oil field, and the extension allows for the continuation of JODCO's 40% interests. The Umm Al-Dalkh offshore oil field also reached end of the interest period in the same month. In addition to the existing interest share of 12%, JODCO acquired an additional 28%, bringing the company's total interests to 40% in this oil field.
In the fifth "Strategic Energy Plan" decided by the cabinet on July 3, 2018, the Japanese government maintains the goal of increasing its self-development ratio of oil and natural gas to 40% or more by 2030 in line with previous plans.
Abu Dhabi is vital to Japan's resource strategy as the emirate allows the entry of foreign companies on the basis of concession agreements. In order to mutually confirm the importance of new interest acquisitions by Japanese companies, JBIC has signed a memorandum of understanding with Abu Dhabi National Oil Company (ADNOC) which manages Abu Dhabi's oil and gas businesses, taking into account the SPC's policy guidelines. At the same time, JBIC has indirectly supported Japanese companies' interest acquisitions in Abu Dhabi through a series of loans. *1
Thus this loan in connection with JODCO's extension of interests in the Satah and Umm Al-Dalkh oil fields contributes to the enhancement of Japan's self-development ratio of oil and gas.
As Japan's policy-based financial institution, JBIC will continue to actively support the development and acquisition of energy resources by Japanese companies and financially assist the securing of a steady energy supply for Japan, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.