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Press Release

Announcement of Reserves in Exploration
and Production Business

January 21, 2014
Cosmo Oil Co., Ltd.
Public Relations Office

Cosmo Oil Co., Ltd. (Representative Director and President Keizo Morikawa; hereinafter, "Cosmo") is pleased to disclose the estimate of the reserves held by the subsidiaries and consolidated affiliate with equity method in its exploration and production business (hereinafter, "E&P business"), Abu Dhabi Oil Co., Ltd (hereinafter, "ADOC"), Qatar Petroleum Development Co., Ltd (hereinafter, "QPD"), and Untied Petroleum Development Co., Ltd. (hereinafter, "UPD").

Cosmo has decided to spin off its E&P business (announced on Dec. 24, 2013) and this disclosure is part of strengthening information disclosures on its E&P business and one of the objectives for the spin off.

1. Results of Crude Reserves Estimate (working interest base) (*1) (As of Aug. 31, 2013)

(As of Aug. 31, 2013)
 

mmbls

Proved Reserves (*2)

109.7

Probable Reserves (*3)

100.1

Total Proved and Probable Reserves (2P)

209.8

Note: The above reserves include reserves of new concession area, Hail field.

2. Results of Crude Production

The daily average production at ADOC, QPD, and UPD reached 36 thousand barrels oil per day (hereinafter, "bopd") for 1H FY2013 (Jan. to Jun. 2013) and the daily average crude production based on working interest reached 19 thousands bopd. (Ref.: Reserves to Production Ratio: About 30 years)

3. E&P Business Outlook for 2013

In FY2013, the ordinary income of the E&P business is expected to reach \50.5 billion. (Announced on Nov. 5, 2013)

Cosmo group is one of the biggest Japanese E&P operators in the Middle East. As announced in "5th Consolidated Medium Term Management Plan (FY2013-FY2017)", it is determined to enhance further the profitability of its E&P business through commencing production from Hail Field from which is expected to reach as much as the existing 3 oil fields possessed by ADOC and expanding its business portfolio by making use of good relationships with oil producing countries.

(*1) About results of reserves estimate

The assessment of ADOC reserves which deemed to have significant impact on Cosmo's future profitability was carried out in an independent assessment by Gaffney, Cline & Associate (hereinafter, "GCA"), a leading global independent reserve auditor. Their assessment confirmed Cosmo affiliates' internal assessment of remaining reserves. The assessment was carried out in accordance with the 2007 "Petroleum Resources Management System (PRMS)" prepared by the Oil and Gas Reserves Committee of the "Society of Petroleum Engineers" (SPE), and reviewed and jointly sponsored by the "World Petroleum Congress" (WPC), the "American Association of Petroleum Geologists" (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE). The assessment of QPD and UPD reserves were carried out in these companies respectively. These assessments of the reserves do not guarantee the reserves and production from them.

(*2) Proved Reserves

Proved Reserves are those quantities of petroleum, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations. When probabilistic methods are used, there should be at least a 90% probability that the actual quantities recovered will equal or exceed the 1P estimate. (Definition of SPE PRMS 2007 March)

(*3) Probable Reserves

Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. When probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the 2P estimate. (Definition of SPE PRMS 2007 March)

[Reference]

Company Abu Dhabi Oil Co., Ltd. Qatar Petroleum Development
Co., Ltd.
Establishment Jan. 17, 1968 Sep. 5, 1997
Representative Representative Director and President
Satoshi Nishi
Representative Director and President
Yaichi Kimura
Shareholders Cosmo Oil Co., Ltd. (63.0%)
JX Nippon Oil & Gas Exploration Corporation (31.5%)
Tokyo Electric Power Co., Inc. (1.8%)
Chubu Electric Power Co., Inc. (1.8%)
Kansai Electric Power Co., Inc. (1.8%)
Cosmo Oil Co., Ltd. (75.0%)
Sojitz Corporation (25.0%)
Overview In September 1969, the 1st exploratory well successfully found crude oil. Since May 1973, the commercial production has begun and presently all produced crude from three oilfields, Mubarraz, Umm Al Anbar and Neewat Al Ghalan is sold as "Mubarraz Blend" to Cosmo and JX Nippon Oil & Gas Exploration Corporation. In February 2011, ADOC signed with Supreme Petroleum Council Abu Dhabi another 30-year concession agreement covering the three existing oilfields and an adjacent oilfield named Hail, of which commercial production is expected to reach as much as total production from existing 3 oil fields. The commercial production of A-North and Al Karkara oilfields started in March 2006. In April 2011, A-South oilfield also started production. Entitled crude is sold as "Qatar Marine Crude" to Cosmo.
Company Untied Petroleum Development
Co., Ltd.
Cosmo Oil Ashmore Co., Ltd.
Establishment Nov. 6, 1970 Sep. 5, 1996
Representative Representative Director and President
Keizo Morikawa
Representative Director and President
Kimio Katayanagi
Shareholder(s) Cosmo Oil Co., Ltd. (45.0%)
Nippon Oil & Gas Exploration Corporation (45.0%)
Mitsui Oil Exploration Co., Ltd. (10.0%)
Cosmo Oil Co., Ltd. (53.0%)
Japanese Minister of Economy, Trade and Industry (28.0%)
Japan Oil, Gas and Metals National Corporation (19.0%)
Overview UPD holds one third of equity shares of Bunduq Company Limited which owns and assumes operatorship of the offshore concession of El-Bunduq oilfield on the border of Abu Dhabi and Qatar. El-Bunduq was discovered in 1965 by Abu Dhabi Marine Area Limited and commercial production commenced in November 1975 for export to Japan as "Lower Zakum Crude".
UPD incurs 97% of development costs for El-Bunduq (3% is incurred by BP) and thus UPD obtains 97% of El-Bunduq's production.
Cosmo Ashmore was established in 1996 and took over the exploration rights of oil acreage offshore northwest Australia. Continued exploration program led to the discovery of Tenacious oilfield in 1997 and Audacious oilfield in 2001. Currently Cosmo Ashmore is carrying out exploration in the area of AC/RL5 and AC/RL6.

■ADOC■

Location Map of ADOC Concession Area
Location Map of ADOC Concession Area

■QPD■ ■UPD■

Location Map of QPD Contract and UPD Concession Area
Location Map of QPD Contract and UPD Concession Area

■Cosmo Ashmore Oil■

Location Map of Cosmo Ashmore Permit Area
Location Map of Cosmo Ashmore Permit Area

Disclaimer

FORWARD-LOOKING STATEMENTS
Certain statements made and information contained herein constitute "forward-looking information" (within the meaning of applicable Japanese securities legislation). Such statements and information (together,"forward looking statements") relate to future events or the Company's future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities, ultimate recovery of reserves or resources and dates by which certain areas will be explored, developed or reach expected operating capacity, that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek","anticipate", "plan", "continue", "estimate", "expect, "may", "will", "project", "predict", "potential","targeting", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. The Company does not intend, and does not assume any obligation, to update these forward looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in oil prices, results of exploration and development activities, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government or other regulatory approvals, actual performance of facilities, availability of financing on reasonable terms, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual results may differ materially from those expressed or implied by such forward-looking statements.

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