Tokyo (Platts)--12Feb2013/511 am EST/1011 GMT

State-owned Japan Bank for International Cooperation said Tuesday it signed Sunday a loan agreement to lend up to $3 billion to the UAE's Abu Dhabi National Oil Company in a bid to ensure Japan's long-term crude imports from the emirate.

In return for the loan, Japanese companies will get crude supplies from ADNOC on a long-term basis, said a JBIC spokesman, declining to elaborate.

In collaboration with Bank of Tokyo-Mitsubishi UFJ, the Sumitomo Mitsui Banking Corporation and Mizuho Corporate Bank, JBIC will provide up to $2.1 billion and the balance will be contributed by the Japanese commercial banks, JBIC said.

ADNOC will use the $3 billion loan on development to increase its oil and gas production in return for ensuring its long-term stable crude supplies to Japan, JBIC said.

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This is the third loan provided by JBIC to ADNOC. JBIC has signed two loan deals with ADNOC so far -- for a maximum $3 billion in November 2010 and for up to $3 billion in December 2007.

Describing Abu Dhabi as already an "extremely important country" for Japan's resource strategy, JBIC said the emirate's "strategic importance" is increasing further with the latest partial startup of the Fujairah oil pipeline, enabling to the export of crude oil without passing through the Strait of Hormuz, last year.

JBIC signing the loan deal Sunday confirms a Platts report on February 7 that the country was in the process of finalizing an additional loan deal with ADNOC, which might be signed during a visit to the UAE by Japan's Minister of Economy, Trade and Industry Toshimitsu Motegi.

At a signing ceremony in the UAE capital Sunday, state-owned Japan Oil, Gas and Metals National Corporation also signed a memorandum of understanding on technological cooperation with ADNOC, METI said.

Under that MoU, Jogmec will accelerate technological cooperation for supporting ADNOC's oil developments as well as taking 500 trainees from ADNOC over five years, METI added.

During his visit to Abu Dhabi, Motegi met senior officials including Deputy Prime Minister Sheikh Mansour bin Zayed bin Zayed Al Nahyan and ADNOC CEO Abdulla Nasser al-Suwaidi, who are also members of the Supreme Petroleum Council, when he expressed Japan's keenness to secure extensions to existing contracts in Abu Dhabi that expire in 2018, METI officials said.

Motegi also asked for Abu Dhabi's support for onshore upstream opportunities in the emirate, the officials said. Japan has also been looking at opportunities in 2014, when Abu Dhabi reviews an existing contract for onshore and shallow water operations.

60% OF CONCESSIONS DUE TO EXPIRE

For Japan, securing extensions to existing concessions in Abu Dhabi that expire in 2018 has been prioritized as one of the top agenda items for the country's resource diplomacy, as more than 60% of its concessions in the emirate are due to expire.

Japan produced 259,000 b/d from its concessions in the UAE, which accounted for 40.5% of the country's total equity output of around 640,000 b/d of crude in fiscal 2011-2012 (April-March), the officials said.

Roughly 225,000 b/d of Japan's total equity production in Abu Dhabi was produced by Japan Oil Development Co., or JODCO, a wholly owned subsidiary of Inpex, in the Umm Shaif and Lower Zakum fields. These concessions expire in 2018 and Japan is pushing for a renewal, they said.

The two fields are operated by the Abu Dhabi Marine Operating Company, or Adma-Opco, a unit of ADNOC.

These long-term concessions are currently being renegotiated by ADNOC with the joint venture partners and with potential new foreign oil companies. The major onshore and offshore concessions, dating from the 1930s, are set to expire in 2014 and 2018, respectively.

Despite announcing aggressive plans to raise the emirate's oil output capacity by about 30% to 3.5 million b/d by 2018, Abu Dhabi has still not told the foreign partners in the concession joint ventures whether their contracts will be renewed.

Japan was reassured about its other concessions in the UAE when the Supreme Petroleum Council in 2011 granted the Abu Dhabi Oil Co., a subsidiary of Japan's Cosmo Oil, a 30-year extension of existing concessions for three oil producing fields in the UAE and a 100% interest in the Hail exploratory block.

The UAE was the second-largest crude supplier to Japan in 2012, providing 793,000 b/d, which accounted for 21.7% of the country's total crude imports of 3.65 million b/d, METI data showed.

--Takeo Kumagai, takeo_kumagai@platts.com
--Edited by Wendy Wells, wendy_wells@platts.com

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