Newsletter No. 1397
News-Analysis
June 29, 2009

 

ADNOC TO STORE OIL RESERVES IN JAPAN

It was reported on the 25th that the Abu Dhabi National Oil Co (ADNOC) will store some of its oil reserves in Japan. The joint project with ADNOC, under discussion since March, is expected to start this fall, with stocks of oil from ADNOC being stored by the Nippon Oil Corporation at a facility in Kagoshima. The precise amount of oil that would be stored in this fashion was not given.

The oil in the Kagoshima facility will remain the property of ADNOC, but Japan would have the pre-emptive right to buy the crude during times of emergency. According to The National, a UAE news service, Abu Dhabi has long had concerns about the potential for geopolitical turmoil or maritime accidents disrupting its oil exports. This project is meant to alleviate some of those concerns.

MARUBENI PICKS UP STAKE IN WATER AND POWER PROJECT

At the end of last month, the Marubeni Corporation purchased a 20% stake in the Abu Dhabi water and power project Shuweihat 2. Before the sale, GDF Suez, a French utility, was the project’s sole developer with a 40% share. Half of that stake has now been ceded to Marubeni. The remaining 60% is held by the Abu Dhabi Water and Electricity Authority (ADWEA).

Shuweihat 2 is expected to comprise a 1,500 megawatt natural gas-fired power station and a desalination plant that will process more than 450,000 cubic meters of water a day.

GDF Suez ran into trouble because of the global economic crisis, which made banks unwilling to provide the necessary loans. Marubeni, however, will be supported by the Japan Bank for International Cooperation (JBIC), which will bring in US$1 billion in financing, thus allowing the project to go forward. Overall, the value of the Shuweihat 2 is put at about US$3.2 billion.

NEWS BRIEFS

Chinese-Japanese Delegation Visits Dubai Customs: According to Dubai Customs, a joint delegation of Chinese and Japanese paid them a visit on the 22nd to discuss intellectual property, illegal trade, and counterfeiting. The Chinese delegation was led by Chairman of the Quality Brand Protection Committee Jack Chang and the Japanese were led by CEO of Japan External Trade Organization (JETRO) Kuniyasu Funaki. A Dubai Customs official declared, “We are keen on preserving the international community’s trust in what we have accomplished since combating counterfeiting and fraud.” It is not clear how or why the Chinese and Japanese were grouped together as a joint delegation.

JETRO Eyes Dubai Food Market: JETRO CEO Kuniyasu Funaki also appeared in a Kyodo News report a few days before the visit to Dubai Customs. He underscored that Japan was interested in boosting food exports to Dubai: “I feel as if I have struck gold with new business opportunities,” Funaki declared. Generally speaking, it seems that Japanese companies will be targeting the upper end of the market, since food products cannot be delivered to Dubai cheaply.

The Abu Dhabi Investment Forum in Tokyo: This event was held at the beginning of this month. Present at the forum this year were representatives of over four hundred Japanese technology companies and financial corporations, as well as governmental bodies.