Abu Dhabi: Japanese oil company Inpex Corporation has acquired a five per cent stake in developing Abu Dhabi onshore oilfields, making it the second company after French energy giant, Total, to be awarded the contract known as Abu Dhabi concession.

The agreement, effective January 1, 2015, is for a period of 40 years, the company said in a statement on Monday.

Inpex becomes the first Asian oil company to win the concession. Total was said to have paid $2.2 billion 9Dh8 billion) as a signing bonus to bag ten per cent stake in late January.

It is not known how much Inpex paid but according to Japanese public broadcaster NHK the value of the deal was expected to be worth $1.1 billion.

The concession is made up of 15 principal onshore oilfields, of which 11 are currently in production and four remain undeveloped. Combined, these make up one of the world’s largest deposits of oil producing 1.6 million barrels per day.

The oilfields are being operated by Abu Dhabi Company for Onshore Oil Operations (Adco), a subsidiary of Abu Dhabi National Oil Company (Adnoc), which holds 60 per cent share while remaining 40 per cent is being given to various international companies.

The new concession has been necessitated following the expiry of an old agreement with international companies dating back to the 1970s in January last year.

A number of companies are bidding for stakes including Royal Dutch Shell, BP, Occidental Petroleum from the US, Statoil from Norway, China National Petroleum Corporation (CNPC), South Korea’s Korea National Oil Corporation and Italy’s ENI.

“This new acquisition in Abu Dhabi, positioned as one of the core areas for Inpex’s petroleum development and production operations, is highly significant in terms of the company’s growth strategies, and also largely contributes to the long-term, stable supply of energy to Japan,” Toshiaki Kitamura, president and chief executive officer of Inpex Corporation, said in a statement.

An Energy expert based in London said it was not surprising to see an Asian company being selected to award the concession. “Over 90 per cent of the crude oil from Abu Dhabi is exported to Asian markets, and the emirate is trying to cement its relationship with Asian countries,” Richard Mallinson, an energy expert at Energy Aspects told Gulf News by phone.

He added that one more Asian company is in contention to win the concession, and did not rule out some of the former members of the old concession agreement being selected. “We might see a mix of Asian and Western companies in the new concession deal to rebalance the membership.”

This will not be the first time Inpex will be involved in Abu Dhabi. Through its wholly owned subsidiaries Japan Oil Development Company Limited (Judco) and Inpex Abk Ltd, the company was producing oil at various oilfields in Abu Dhabi.

The UAE, which holds about six per cent of global oil reserves, is intending to increase the production capacity to 3.5 million barrels of oil per day by 2017 from the present capacity of around 2.8 million barrels of oil per day.