TOKYO, Feb 18 (KUNA) -- Japan's Arabian Oil Co. will acquire an interest in a Norwegian oil field slated to resume production this year, a major Japanese business daily reported Wednesday.
Arabian Oil, an AOC Holdings Inc. group oil development firm, plans to take a 10 percent stake in the Yme oil field off the southwest coast of Norway, the Nikkei Shimbun said, adding that it will buy the interest from the local arm of Canadian oil developer Talisman Energy Inc., which manages the field.
Crude oil production began at this site in the 1990s, but operations are suspended now, the newspaper said. Production is expected to restart around the October-December quarter by using the latest technologies, such as injecting gas into the field to boost the pressure.
Initial output is estimated at 40,000 barrels a day, equivalent to about 1 percent of Japan's domestic demand, with daily yields of at least 20,000 to 30,000 barrels expected for several years to come, it said.
Arabian Oil will receive 10 percent of the output, in line with its interest.
Arabian Oil will also acquire 10 percent interests in two adjacent sites from Talisman, with exploration to take place to confirm reserves before production begins, the report said.
The firm's total investment, including the rights and costs for production equipment, is estimated at around JPY 10 billion (USD 108.5 million).
Arabian Oil began operating a large oil field that straddles Kuwait and Saudi Arabia in 1961, but failed to extend its concession covering the section of the Khafji field located in Saudi Arabia in 2000, despite the full backing of the Japanese government.
The company also lost the concession for the part in Kuwait in 2003 but struck an agreement with Kuwait to send engineers to help with operations there.
The Tokyo-based firm currently produces oil at an offshore field in Norway and another in the South China Sea. But production will drop sharply because its interest in the Chinese field is due to expire later this month.
The firm is scrambling to develop new oil fields, with exploration projects now taking place in Egypt as well.
Copyright Kuwait News Agency 2009.
