The Japan Bank for International Cooperation (JBIC) has signed a memorandum of understanding with Abu Dhabi National Oil Company (ADNOC). The objective of this MOU is to establish a comprehensive and strategic partnership between JBIC and ADNOC, by setting out consultations and information sharing on issues such as ADNOC investment plans and JBIC lending schemes.
As a result, business development opportunities will increase for Japanese oil companies and ADNOC in the oil and gas sector and a long-term crude oil transaction will be established between them. This will help to secure a stable energy supply for Japan.
Abu Dhabi has an abundant supply of highly versatile, light crude oil and for more than 30 years Japan has steadily imported huge amounts from ADNOC.
UAE is the second largest supplier of crude oil to Japan, accounting for roughly 25% of its total crude oil imports. UAE is also one of the few countries in the Middle East to allow an inflow of foreign companies on the basis of concession agreements. Several Japanese companies are operating oil and gas production business in the country, and so the UAE plays a key role in securing a stable energy supply for Japan. Strengthening relations with ADNOC, a core agency in the energy sector, therefore has a considerable significance.
Japan’s Basic Energy Plan, which was revised in March last year, again demonstrates a structured approach towards obtaining a steady oil supply and other energy resources, “to strengthen strategic and comprehensive ties with the countries endowed with natural resources.”
The signing of the MOU corresponds with this government policy, developing the relationship between JBIC and ADNOC as well as Japan and UAE, which is strategically important to Japan for its energy security.