Newsletter No. 235
April 9, 2006

 

JAPANESE COMPANIES’ GROWING INVOLVEMENT IN OMANI OIL AND GAS

This month Mitsubishi Corp. and Tokyo Electric Power Company (TEPCO) are expected to tap Omani LNG according to a stable contract. The Omani producer is Qalhat LNG, with which Mitsubishi signed a purchase agreement in July 2004. This supply of LNG will be consumed in both Japan and the United States, and is said to provide TEPCO with new flexibility in regard to fluctuations in consumer demand. In all, Qalhat LNG is obligated to provide 800,000 tons of LNG a year for fifteen years.

Meanwhile, Mitsui and Co. and Mitsui Oil Exploration Co. have jointly won a 15% stake in Oman’s Block 54 concession, which lies near the center of the country on the Arabian Sea coast. The leader of this project is America’s Occidental Petroleum, with a 70% stake. The other partner, with a 15% stake, is Abu Dhabi’s Liwa Energy.

This is not Mitsui’s only partnership with Occidental in Oman, as these companies already are partners in Blocks 9 and 27 near the Oman-UAE border. They currently produce about 58,000 barrels a day.

Finally, it should also be noted that Oman is a member of the Gulf Cooperation Council (GCC), with which Tokyo will soon begin negotiating an FTA.