|12 October, 2016

Adnoc consolidation plans to bring significant benefits, Japanese oil firm says

The decision by Abu Dhabi National Oil Company to combine two offshore operating companies into one single entity will bring significant financial and operational benefits for the stake holders.

Cars queue for petrol at a gas station in Dubai June 11, 2012. Image for illustrative purposes.

Cars queue for petrol at a gas station in Dubai June 11, 2012. Image for illustrative purposes.

REUTERS/Ghazal Watfa

Wednesday, Oct 12, 2016

Abu Dhabi: The decision by Abu Dhabi National Oil Company to combine two offshore operating companies into one single entity will bring significant financial and operational benefits for the stake holders, a senior executive of Japan Oil Development Company (Jodco) said in an interview to Gulf News.

Jodco holds 12 per cent stake in Abu Dhabi Marine Operating Company (Adma-Opco) and Zakum Development Company (Zadco) which will be integrated into a single entity by early 2018.

“As a shareholder of both operating companies, Adma-Opco and Zadco, we fully support the initiative of Adnoc and are also committed to providing any assistance as much as possible. We expect this consolidation will bring significant financial and operational benefits for all stakeholders involved,” said Yuzo Sengoku, Director and General Manager of Jodco.

In a major decision earlier this month, Abu Dhabi National Oil Company (Adnoc) announced the integration of two offshore operating companies, Abu Dhabi Marine Operating Company and Zakum Development Company into a new company.

Adnoc expects that new company resulting from this integration will be more agile, better able to respond to changing market demands, and be well positioned to take advantage of strategic opportunities for future growth.

The process is likely to be completed by early 2018 under the guidance of a steering committee formed by Adnoc and its partners.

Sengoku said there will not be any impact on the field development and operations in this phase which will run up-to early 2018.

“We expect this consolidation will bring us the capex [capital expenditure] savings and opex [operational expenditure] reduction and we are happy to provide any support to realise cost cutting.”

The company has been involved in Abu Dhabi for more than 40 years developing various oilfields including Umm Shaif, Lower Zakum, Umm Lulu, Nasr, Upper Zakum, Umm Al Dalkh and Satah.

“We want to grow along with Abu Dhabi through maximising the value of our assets. We continue to make technical contribution to Abu Dhabi oil industry and social contribution to Abu Dhabi society.”

“We expect further growth of our production in Abu Dhabi. It is strategically important for us,” he said that without giving further details about the production targets.

Gulf News has previously reported that Japan imports about four million barrels of oil every day with Abu Dhabi accounting for more than 20 per cent of total imports.

The company is keen to continue to participate in the offshore concessions which will expire in 2018, he added.

Inpex, the parent company of Jodco won a five per cent participating interest of concession to develop Abu Dhabi’s onshore oilfields for forty years last year.

Speaking on low oil prices, he said that the company has been suffering like any other oil firm and they are taking measures to overcome the difficult time by undertaking cost cutting measures.

“We have to be prepared for low oil price environment. We cannot control oil prices but we can control our costs.”

He said that he supports the decision of Organisation of the Petroleum Exporting Countries (Opec) to limit output in its next meeting in Vienna to boost oil prices.

Oil prices have been trading low for the past two years as production increases across the globe especially from the US.

On October 11, Brent reached the highest level at $53.73 since October 9, 2015 after Russia said it was ready to join the Opec in reducing crude output to stabilise oil prices.

By Fareed Rahman Senior Reporter

Gulf News 2016. All rights reserved.

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