Takayuki Ueda, President & CEO, INPEX CORPORATION, on regional and global development plans, including the Lower and Upper Zakum Oil Fields in Abu Dhabi and the Ichthys project off the coast of Australia
How successful has the investment in Abu Dhabi’s Lower Zakum oil field been and are there any future plans for INPEX to develop its activities in the Middle East?
In February of last year, INPEX was awarded a 10 per cent participating interest in the Lower Zakum concession offshore Abu Dhabi by the Supreme Petroleum Council. The agreement, which has a term of 40 years, lasts until 8 March 2058, and ensures INPEX continues to enjoy access to signiﬁcant, competitive and reliable resources that it understands very well.
The agreement results, in part, from the unwavering long-term partnership that INPEX has built and maintained with Abu Dhabi over more than 40 years, and demonstrates INPEX’s long-term commitment to the further development of Abu Dhabi’s energy industry over the next several decades.
Furthermore, INPEX was later appointed as Asset Leader for the Lower Zakum Oil Field, in recognition of INPEX’s technical contributions to oil development in the UAE. As the only IOC partner participating in both the Lower and Upper Zakum Oil Fields, INPEX, through its subsidiaries JODCO Lower Zakum Limited and JODCO, will continue to seek synergies between the two oil ﬁelds to reduce costs and maximise value, while devoting its human and technical resources to the operations at the Lower Zakum Oil Field and working closely with ADNOC Offshore to achieve production targets, deploy technical solutions and reduce development and production costs.
INPEX positions the UAE as one of its core business areas, and will continue to strive to strengthen its oil development activities and contribution efforts in Abu Dhabi, as well as help further deepen the cordial relations between Abu Dhabi and Japan.
Separately, INPEX is involved in exploration activities at the onshore Exploration Block 10 in the Republic of Iraq, where a highly productive oil reservoir was discovered in 2017, and where subsequent appraisal drilling also conﬁrmed the ﬁeld’s assumed geological model. Going forward, INPEX will pursue evaluation studies alongside its partners to determine the viability of commercial development.
What was the major impetus behind the carbon farming project on the Tiwi Islands and are similar initiatives planned for the future?
INPEX is committed to working sustainably and with respect for the environments in which we work, focusing on minimising and mitigating any potential environmental impacts.
In the lead-up to the Final Investment Decision for the Ichthys LNG Project in Australia, INPEX committed to a number of environmental and social offset programmes, which included an AUD$34 million dollar greenhouse gas offset programme in the Northern Territory.
INPEX entered into a programme agreement to develop an Aboriginal ﬁre management programme, called the Savanna Fire Management programme. Delivery is managed by the Indigenous Land Corporation and focuses on minimising wild savanna ﬁres through a controlled ﬁre management programme early in the dry season.
Natural ﬁres in Australia’s tropical savanna, especially in Northern Territory where the Ichthys LNG Project’s onshore facilities are based, account for over 4 per cent of Australia’s greenhouse gas emissions.
Savanna Fire Management is considered an effective carbon farming method to reduce greenhouse gas emissions and generate carbon credits.
The development and operation of ﬁre management projects aims to provide signiﬁcant economic, environmental, cultural and social opportunities, creating new enterprises and jobs for Aboriginal people in the Tiwi Islands and Northern Territory.
The Ichthys LNG Project has committed AUD$34 million towards the development of multiple savanna ﬁre management projects in Australia, within an overall programme that may continue for up to 20 years.
Can you share with us, the latest developments and timelines as to when LNG will start to be shipped from the Ichthys project?
The INPEX-operated Ichthys LNG Project recently celebrated one of its most important milestones when the ﬁrst shipment of LNG departed the onshore gas liquefaction plant in Darwin in the Northern Territory of Australia, and arrived at the INPEX-operated Naoetsu LNG Terminal in Niigata Prefecture, Japan on October 31, 2018. The arrival of Ichthys LNG at the
Terminal is a signiﬁcant milestone for INPEX, as it organically links the company’s LNG development business overseas to its gas distribution network in Japan.
INPEX will continue to work towards the success of the Ichthys LNG Project with the understanding and cooperation of all its stakeholders, including the project’s joint venture partners, the local communities, the Australian federal government and the governments of Western Australia and the Northern Territory.
In your opinion, how do you see the world’s energy mix evolving in the next decades?
While there is an overall trend favouring transition to a low-carbon society, fossil fuels will not likely be immediately replaced by other sources of energy. Rather, demand for oil is expected to continue to grow steadily, particularly in Asia and other emerging countries, where economic growth is expected to increase the demand in fossil fuels until at least 2040.
To this end, we will meet this growing energy demand by continuing to position oil and natural gas E&P activities as our core business and expanding our E&P activities, efﬁciently engaging in competitive exploration, development and production projects such as those found here in Abu Dhabi.
In addition to oil, demand for natural gas, which has lower CO2 emissions than other fossil fuels, is expected to increase substantially over the long term, and we will proactively respond to this demand through INPEX-operated LNG projects like Ichthys and Abadi.
Meanwhile, demand for renewable energies will also grow, and so we will also focus on reinforcing our renewable energy initiatives. Speciﬁcally, we will continue to pursue our existing geothermal power generation projects, leveraging the synergies provided by our core upstream exploration business, while looking into onshore and offshore wind power generation opportunities.
Takayuki Ueda is President & CEO of INPEX CORPORATION. He joined the company in 2017, and served as Senior Executive Vice President until he assumed his current position in June 2018. Throughout his career, he has held a variety of directorial positions at Ministry of Economy, Trade and Industry of Japan (METI) in establishing the Japanese government policies for international trade, economic cooperation, and public utility sectors. After he assumed several director general positions such as Director-General for Trade Policy Bureau and Director-General for Agency for Natural Resources and Energy, he was named Vice Minister for International Affairs in 2015.
During his tenure he took the lead at a number of economic and trade negotiations with foreign governments. He joined Ministry of International Trade and Industry (currently METI) in 1980.
This interview was ﬁrst published during ADIPEC 2018 in the ADIPEC Show Dailies