Japan's JBIC signs loan deal for up to $3 bil with UAE's ADNOC
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,
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.
Article continues below...
|Sign up to Oilgram News today.
Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more.
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
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, firstname.lastname@example.org
--Edited by Wendy Wells, email@example.com