Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Shinzo Abe, Prime Minister of Japan, witnessed the signing of the UAE-Japan Strategic Energy Cooperation Agreement between the Abu Dhabi Supreme Petroleum Council Monday.

The agreement was represented presented by Abu Dhabi National Oil Company (ADNOC) and the Agency for Natural Resources and Energy of Japan, for the storage of over 8 million barrels of crude oil at storage facilities in Japan, reported Emirates News Agency. (WAM)

Under the terms of the new agreement, which has an initial three-year duration, ADNOC will store crude oil at storage facilities in Japan which may be traded to customers, meanwhile ensuring that certain quantities of crude oil are available in the event of an oil shortage event in Japan.

According to WAM, the agreement was signed by Dr. Sultan bin Ahmad Sultan Al Jaber, Minister of State and ADNOC Group CEO, and Makihara Hideki, Japan’s State Minister of Economy, Trade and Industry.

"The new agreement with the Agency for Natural Resources and Energy to store Abu Dhabi crude oil in Japan further strengthens the excellent working relationship between the UAE and our Japanese counterparts. Under the wise guidance of our leadership, the UAE has fostered a deep and longstanding relationship with Japan that spans many decades. We are pleased to extend and expand our storage agreement which positively contributes to Japanese energy security, while also supporting ADNOC’s broader trading ambitions,” Dr. Al Jaber said.

"The UAE has been one of the most important crude oil suppliers to Japan for a very long time. The Joint Oil Storage Project is a most symbolic and mutually beneficial project for both countries and will contribute to the improvement of Japan’s energy security as well as the UAE’s access to Asian markets. Given the current world geopolitical situation, it is well-timed to expand our Joint Oil Storage Project. I really hope that our bilateral relationship between Japan and UAE will be further strengthened through the project,” Makihara said.

Japan is ADNOC’s largest international importer of oil and gas products with approximately 25 percent of its crude oil imported from the UAE.

The oil company has a long history of mutually beneficial strategic partnerships with Japanese oil and gas companies that span over four decades and cover the entire oil and gas value chain.

As part of ADNOC’s 2030 smart growth strategy, Japanese oil and gas companies have been awarded concession agreements.

In 2015, INPEX Corporation,a Japanese oil company,was awarded a five percent stake in the Abu Dhabi Onshore Concession.

In 2018, the Japanese firm was also awarded a ten percent stake in the new Lower Zakum offshore concession ,while simultaneously extended its 40 percent stake in Satah oil field and increased its stake in Umm Al Dalkh field to 40 percent.

In 2019, Intercontinental Exchange Inc (NYSE:ICE) announced that INPEX and JXTG along with eight of the world’s largest energy traders including ADNOC would partner on the launch of ICE Futures Abu Dhabi, a new exchange that will host the world’s first Murban crude oil futures contract.

The UAE and Japan enjoy strong bilateral economic relations that date back the first shipment of UAE crude oil was exported from Umm al-Shaif offshore field in Abu Dhabi to Japan in 1961, WAM reported.

Trade between the UAE and Japan has exponentially grown in recent years, with recent figures showing that Japan exported goods to the UAE approximately worth of $7.9 billion, and imported goods from the UAE for approximately $27.5 billion in 2018, according to WAM.

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WAM