TOKYO--Japan's Inpex Corp. has secured a 5% stake in Abu Dhabi
Company for Onshore Oil Operations, or ADCO, one of the Gulf
nation's biggest oil concessions, becoming the second foreign
stakeholder after France's Total SA.
The move suggests that as part of Tokyo's efforts to shore up
its energy supplies, the partly state-owned Japanese energy company
was prepared to pay a hefty signing-on fee that other big players
in the industry have balked at.
While the concession is open to tender by the Abu Dhabi
government, many international oil giants competing to become
partners in ADCO have been struggling to meet the Emirate's demand
for a $2.2 billion sign-on fee because plunging oil prices in the
second half of 2014 have squeezed their profits.
According to a person familiar with the matter, Japan's Inpex
agreed to pay $1.1 billion for the 5% stake.
An Inpex spokesman declined to specify how much of a sign-on fee
the company agreed to pay.
Total was the first foreign company awarded a 40-year stake in
January, with a 10% share. The Inpex move leaves a 25% stake
available out of a 40% share earmarked for foreign companies.
ADCO is one of the biggest oil concessions in the oil-rich Gulf
nation, covering 15 onshore fields and producing 1.6 million
barrels a day of crude oil.
BP PLC and Royal Dutch Shell PLC are also believed to be among
the remaining contenders for a new 40-year contract, but are locked
in a standoff over terms. China National Petroleum Corp. is thought
to be another contender.
Exxon Mobil Corp. walked away from the concession after the
company's 75-year license expired in January 2014.
Output from the concession can be loaded at a port off the
Strait of Hormuz using a pipeline.
Yoichi Miyazawa, Japan's industry minister, said Monday that the
share in the concession would contribute much to Japan's energy
security.
Tokyo has been in talks with Abu Dhabi for years to secure the
stake as part of its efforts to increase oil output from projects
in which Japanese companies have stakes.
Summer Said contributed to this article.
Write to Mari Iwata at mari.iwata@wsj.com
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