Japan signs nuclear technology deal for oil with UAE

Japan has signed a nuclear cooperation and technology transfer deal with the United Arab Emirates and told the UAE it wants to renew its role in an oil and gas concession set to expire in 2018, a Japanese foreign ministry spokesman said.

 Oil-import dependent Japan has offered nuclear expertise to the UAE as well as Saudi Arabia this year in the hope that it can secure long-term oil supplies from its top two providers.

Japan’s reliance on the two Gulf OPEC oil producers has increased as Tokyo has reduced its imports from Iran at a time when its oil and gas needs have risen because of the closure of most of its nuclear plants.

“We have reduced imports over five years by 40 percent from Iran because of US sanctions,” the Japanese foreign spokesman told journalists in Abu Dhabi during a visit by Japanese Prime Minister Shinzo Abe.

“More than 80 percent of (our) oil imports are from the Middle East, that’s why we can reduce Iran oil and increase our partnership with UAE, Saudi Arabia.”

In February, a Japanese trade delegation touring the Gulf offered to help Saudi Arabia build nuclear plants to free up more crude for export, while a group of Japanese banks gave Abu Dhabi National Oil Co. (ADNOC) a $3 billion loan to cement ties.

On Wednesday evening, Japan’s Abe also asked Abu Dhabi’s Crown Prince for an extension to Japan’s upstream oil stake in the UAE which comes up for renewal in 2018, the spokesman said.

Japanese Oil Development Co. owns 12 percent of the Abu Dhabi Marine Operating Company (ADMA-OPCO) oil and gas concession which expires in 2018. Japanese companies are also expected to bid for a stake in another concession which comes up for renewal at the end of 2013.

Japan’s reliance on Gulf oil and liquefied natural gas has risen sharply since it shut down most of its nuclear power plants after the Fukushima disaster in March 2011.

A consortium of South Korean companies is building a nuclear power station in Abu Dhabi, but the emirate may choose to build more as it races to meet soaring demand for electricity without burning too much exportable gas.

Saudi Arabia plans to build up to 17 gigawatts of nuclear power capacity over the next two decades to cut its oil use.

By Reuters