The visit to the UAE by Japan’s Prime Minister Shinzo Abe on 29 and 30 April was an opportunity for Tokyo and Abu Dhabi to develop commercial links for the future following the signing of oil concessions earlier this year.

In February this year, Japan’s Inpex Corporation was awarded a 10 per cent interest in Abu Dhabi’s offshore Lower Zakum concession. At the same time the company’s stakes in Abu Dhabi’s Satah and Umm al-Dalkh concession were extended for 25 years.

Then, on 30 April, in the presence of Abe, Abu Dhabi National Oil Company (Adnoc) formally appointed Jodco Lower Zakum, a wholly-owned subsidiary of Inpex, as the asset leader for Abu Dhabi’s Lower Zakum concession area.

As asset leader, Jodco will lead the development plans to achieve the concession objectives, including building up and sustaining production targets, achieving agreed recovery rates and cost optimisation targets.

The agreements with Adnoc are crucial for Inpex’s operations. Although it has 70 projects in 20 countries,  the Abu Dhabi assets account for about half of its total net production of about 521,000 barrels aday of oil.

The deal is an important one for both the UAE and Japanese economies. Tokyo is a key customer for Abu Dhabi crude. In March this year, Japan imported 25.997 million barrels of crude oil from the UAE, 26.1 per cent of the country’s total crude imports.

Downstream, Japanese companies are also expected to continue to play a role in the UAE energy sector. Joining Abe on his visit to the UAE were CEOs from companies such as JGC, Chiyoda, Hitachi Zosen, Mitsubishi Heavy Industries and Marubeni. All of these companies have worked extensively on oil and gas and utilities projects in the UAE in the past.

Japan is also aiming to play an increasing role in the broader UAE economy away from the traditional project sectors. Technologies such as artificial intelligence and the internet of things were promoted during Abe’s visit, along with other sectors such as space exploration, renwable energy, agriculture and education.

These sectors will help support Abu Dhabi’s ambitions to further diversify its economy away from oil and gas, and ensure that Japan continues to play a significant role in economic future of the UAE.