The Abu Dhabi National Oil Company (ADNOC) has awarded exploration rights to Japan’s Cosmo Energy for the Offshore Block 4, following the second Block Bid Round.
Organised by ADNOC, the Emirate’s second competitive bidding round is for the exploration, development, and production of oil and gas.
An exploration concession agreement has been signed by ADNOC with Cosmo subsidiary Cosmo E&P Albahriya.
Covering a surface area of 4,865km², Offshore Block 4 will benefit from reduced operating unit costs as it is located in the shallow waters of the Arabian Gulf in the north of Abu Dhabi.
Cosmo expects the block, which lies adjacent to the ADOC-operated Mubarraz Oil Field, to significantly reduce capital and operating costs for development and production by utilising existing infrastructure.
In a press statement, Cosmo said: “This award will create synergies between Cosmo Albahriya and ADOC and reinforce the cost-competitiveness of both companies.
“Furthermore, Offshore Block 4 will contribute to Japan’s increased crude oil self-sufficiency ratio and reinforce energy security.”
At the Offshore Block 4, Cosmo will invest up to $145m in exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities.
The award of the latest exploration rights follows the recent exploration block awards to Occidental, as well as a consortium led by Italy’s Eni and Thailand’s PTTEP.
UAE Minister of Industry and Advanced Technology and ADNOC Group CEO Dr Sultan Ahmed Al Jaber said: “Cosmo was selected after a very competitive bid round. They bring expertise and understanding of our offshore environment, technology, and market access, key ingredients that underpin ADNOC’s targeted approach to strategic partnerships, which is enabling us to unlock and maximise value from our assets and resources as we continue to deliver on our 2030 strategy.”
Cosmo will have the right to a production concession to develop and produce potential commercial discovery made during the exploration phase.
ADNOC will have the option to own a 60% stake in the production phase of the concession.