Japan Pushes CCS To Secure Stakes In Abu Dhabi Offshore Concessions

Japan Pushes CCS To Secure Stakes In Abu Dhabi Offshore Concessions

Tokyo is developing C0₂ technology to support Japanese upstream firms, which have stakes in offshore oil fields whose remaining reserves total about 7bn barrels. Japan’s Inpex is at the point of completion of a study into offshore 350,000 b/d field Lower Zakum, as Abu Dhabi Marine Operating Company (ADMA-OPCO) announces it will launch a CO₂ offshore program as part of the emirate’s project to boost ultimate crude recovery to 70% from 50%. Japanese firms have stakes in almost all fields that are operated through consortia. They see carbon capture and storage (CCS) technology as giving them the edge over relative newcomers from Europe and Asia to secure concession renewals. Nick Wilson writes.

State-owned Abu Dhabi National Oil Company (ADNOC) may start injecting carbon dioxide instead of natural gas into its offshore fields to boost oil output, Ali al-Muhairi, Senior Vice-President of Development at its subsidiary ADMA-OPCO (ADNOC, BP, Total and Inpex), announced on 28 May at the EOR and Heavy Oil World MENA conferencein Abu Dhabi. “We are looking at CO₂ injection offshore. We have tried using natural gas; now we are looking at CO₂,” he said while declining to state when it would start. ADMA-OPCO aims to boost production capacity to 1mn b/d by 2019 (MEES, 2 May 2011).

ADNOC aims to boost ultimate crude recovery to 70% – 20 percentage points higher than the current target – by deploying enhanced oil recovery (EOR) technology onshore and offshore, including CO₂, Mr Muhairi said. This could take 20-40 years to achieve he added. ADNOC’s stated goal is to boost its yearly average production capacity to 3.5mn b/d by 2017 and plateau it until 2030. MEES calculates it will be able to achieve 3.6mn b/d by 2019 based on the industry standard of 90 days’ sustainable output.

Upstream firm Inpex, through its Abu Dhabi subsidiary Japan Oil Development Company (Jodco), is finishing a study into CO₂ EOR in Lower Zakum, which it started in 2010. Bringing CO₂ technology to Abu Dhabi will give Japanese firms an edge over Korean, Chinese and some Western independents that lack it. It will also help them to compete against Norway’s state-owned Statoil – which has CCS and CO₂ EOR experience and which MEES learns is focusing on trying to get offshore concessions. Shell has also offered to deploy CCS (MEES, 2 April). Although it does not have a stake in offshore concessions, it signed a memorandum of understanding in 2008 to evaluate potential joint exploration, development and production with ADNOC of offshore deep gas field prospects.

CCS is one of the flagships of Abu Dhabi’s clean energy initiative, Masdar. Jodco carried out a pre-Masdar EOR CO₂ study during 2000-05 into offshore Upper Zakum – which is operated by ExxonMobil-led consortium Zakum Development Company (ZADCO – ExxonMobil, ADNOC and Inpex). Upper Zakum is expected to produce 750,000 b/d by 2015. The Upper Zakum concession expires in 2026. Inpex works in conjunction with state-owned Japan Oil, Gas and Metals National Corporation (JOGMEC), which develops EOR technology and in recent years has focused on CCS. Furthermore, Tokyo’s Ministry of Economy, Trade and Industry (METI) – not its environment ministry – is developing a pure carbon capture and storage (CCS) project – as opposed to CO₂ EOR – to bury CO₂ offshore Japan.

Tokyo is experienced at packaging deals and getting its diverse firms – engineering, finance, utilities and oil – to work together, which resulted in 2011 in Japanese consortium Abu Dhabi Oil Company (ADOC), having its concession of three small fields renewed, and gaining a fourth oil field, Hail, which lies above the sour gas field of the same name (MEES 17 January 2011). And adding CCS technology to the suite gives the oil companies extra weight. “If they are able to put that all together it would give a real edge – and set them aside from the low-cost firms,” an international oil company official tells MEES.

Japanese firms, including JX Nippon Oil and Gas Exploration Corporation, Mitsui Oil Exploration, refiner Cosmo Oil Company and utilities Tokyo Electric Power, Chubu Electric Power, Kansai Electric Power have stakes in offshore consortia ZADCO, ADMA-OPCO, ADOC, Bunduq Oil Company, and a joint venture with Total that operates Abu al-Bukoosh field. Their concessions expire between 2018 and 2042 and concession terms can be included in the definition of remaining reserves – those anticipated to be recoverable with known technology under specific economic conditions. The stakes in individual ADMA-OPCO and ZADCO fields are each separately divided between the shareholders.

Abu Dhabi Offshore Oil Fields

Field	Consortium	Equity % Split	Expiry	Remaining Reserves mn barrels	Production Capacity (‘000 b/d)	Planned Prod Capacity  (‘000 b/d)
Upper Zakum	Zadco	Adnoc 60 Exxon 28 Jodco 12	2026	5000	600	750 in 2015
Umm al dalkh	Zadco	Adnoc 88 Jodco 12	2018	150	20	20
Satah	Zadco	Adnoc 60 Jodco 40	2018	50	30	30
Lower Zakum	Adma-Opco	Adnoc 60 BP 14.66 Total 13.34 Jodco 12	2018	800	350	450 in 2016
Umm Shaif	Adma-Opco	Adnoc 60 BP 14.66 Total 13.34 Jodco 12	2018	750	250	300 by 2019
Umm Lulu	Adma-Opco	Adnoc 60 BP 14.66 Total 13.34 Jodco 12	2018	NA	0 (start up in 2013)	100 in 2019
Umm Nasr	Adma-Opco	Adnoc 60 BP 14.66 Total 13.34 Jodco 12	2018	NA	0 (start up in 2013)	60 in 2017
Saath al-Ras Boot (Sarb)	Adma-Opco		2018	NA	0 (start up in 2016	100 by 2019
Umm al-Anbar	Adoc	JX Nippon 31.5 Cosmo Oil 63.0 TEPCO 1.8 Chubu 1.8 Kansai 1.8	2042	15	NA	NA
Neewat al-Ghalan	Adoc	JX Nippon 31.5 Cosmo Oil 63.0 TEPCO 1.8 Chubu 1.8 Kansai 1.8	2042	10	NA	NA
Mubarraz	Adoc	JX Nippon 31.5 Cosmo Oil 63.0 TEPCO 1.8 Chubu 1.8 Kansai 1.8	2042	100	18	18
Hail	Adoc	JX Nippon 31.5 Cosmo Oil 63.0 TEPCO 1.8 Chubu 1.8 Kansai 1.8	2042	NA	NA	NA
Bunduq (shared with Qatar)	Bunduq	BP 3 BOC 97 ( JX Nippon 45 Cosmo 45 Mitsui 10)	2018	20	NA	NA
Abu al-Bukoosh		Total 75 Inpex 25	2018	60	6 (Abu Dhabi share)
Total				6,955		1.83

Source:IOCs and Contractors.

Copyright MEES 2012.