Arab News Dubai
A Japanese energy firm has been awarded exclusive rights for the exploration, development, and production of oil and gas in a designated area of the Arabian Gulf.
Cosmo Energy Exploration and Production Co. (Cosmo) secured the offshore Block 4 contract in the second competitive bidding round organized by Abu Dhabi National Oil Co. (ADNOC).
It is expected that Cosmo will invest up to $145 million in exploration and appraisal drilling in an area covering 4,865 square kilometers to the north of Abu Dhabi.
A subsidiary of Cosmo will operate the block under the agreement signed with the Abu Dhabi Supreme Council for Financial and Economic Affairs (SCFEA) and ADNOC.
If a commercial discovery takes place during the exploration phase, Cosmo will have the development and production rights while ADNOC will get the option to take a 60 percent stake in the production phase.
UAE minister of industry and advanced technology, Sultan Ahmed Al-Jaber, said: “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.”
The minister also pointed out the Japanese company’s “expertise and understanding of our offshore environment, technology, and market access.”
In a statement, Cosmo said that it anticipated capital and operating costs to be reduced due to the exploration block lying adjacent to the Mubarraz Oil Field operated by its affiliate, Abu Dhabi Oil Co.
The exploration will contribute to Japan’s increased crude oil self-sufficiency and promote energy security in the country.
“We believe this block was awarded because the government of Abu Dhabi and ADNOC recognize Cosmo Group as a trustworthy partner, appreciate its existing initiatives toward social contributions in Abu Dhabi, and value its track record of safe, stable, and environmentally friendly oil field development and production operations in Abu Dhabi,” Cosmo added.