Crude Oil Trade with Kuwait
When the concession agreement with Saudi Arabia expired in February 2000, as did the agreement with Kuwait in January 2003, AOC continued to participate in oil field operations in the offshore Partitioned Neutral Zone under a five-year technical services agreement with Kuwait. While that agreement expired in January 2008, AOC holds a 20-year crude oil purchasing agreement (which went into effect in January 2003) with Kuwait that guarantees it the right to supply crude oil produced in the Khafji oil field.
Gulf of Suez, Egypt
AOC has carried out development work in Northwest October (NOW) Block in the Gulf of Suez, Egypt. However, it became difficult to maintain the initial start-up target due to the political and economic confusion in Egypt since January 2011. AOC has been consulting with the partner, Egyptian General Petroleum Corporation, on the revised development plan. Nevertheless, since the situation of the country is still unstable, AOC will seek to sell the interest of NWO Block.
Norwegian North Sea
Norske AEDC AS (NAEDC - a wholly-owned AOC subsidiary) was established in 1988 to participate in oil and gas exploration projects in the Norwegian North Sea. NAEDC holds 5% working interest in the Gyda oil field in Block 2/1 of the Norwegian North Sea under the operatorship of Talisman Energy Norge AS (Talisman).
The Gyda oil field, which came on-stream in June 1990, is currently producing crude oil at a daily average of 2,000 barrels.
As for the redevelopment project of Yme oil field, 10% interest of which was acquired by NAEDC in February 2009, production start-up has been considerably delayed due to defects of the constructed offshore production facilities. AOC has been discussing a new development and production plan with Talisman, the operator, but there are no prospects for the start-up. Since considerable amount of time and money is expected to be further needed until the start-up, there are growing concerns about worsening profitability of the project. Therefore, AOC will seek to sell the interest, consulting with related parties including the partners of the said project.
Half a Century in the Oil and Natural Gas Field
AOC has pioneered the development of overseas oil fields for the Japanese oil industry. For nearly half a century since its foundation, it has engaged in oil development and production operations (Khafji-related operations) in the offshore Neutral Zone (now Divided Zone) between Saudi Arabia and Kuwait and has largely contributed to the energy security of Japan, a country with few natural resources.
In addition to the Khafji-related operations, AOC has been also involved in oil and natural gas exploration and development projects in North America, East Asia and Europe.
AOC concluded a concession agreement with the government of Saudi Arabia in December 1957 and with the government of Kuwait in July 1958, for exploration and development of hydrocarbon reserves in the offshore Neutral Zone between the two countries.
Under the agreements with Saudi Arabia and Kuwait, AOC discovered the massive Khafji oil field in January 1960 and the Hout oil field in November 1963. It has been nearly half a century since AOC pumped its first barrel of oil out of the Khafji oil field. Since 1961 AOC has produced a total of 3.9 billion barrels of crude oil, supplying some 2.8 billion barrels to Japan alone.
Business Activities in Iraq
AOC signed a Memorandum of Understanding with the Iraqi Ministry of Oil in June 2005 to provide technical assistance as part of Japan's initiative to help rebuild post-war Iraq. AOC implemented the assistance program for three years until January 2008, which included the development of a master plan for South Oil Company (Iraq) as well as plans to boost the capacity of crude oil loading facilities in southern Iraq, the drafting of a development plan for the Tuba oil field, and technical training for Iraqi engineers.
South China Sea
AOC established New Huanan Oil Development Company, Ltd. (NHODC) to carry out oil and natural gas exploration and development projects (with the AOCHD group holding an 84.3% stake in the company). NHODC had been engaged in joint operations of the Lufeng 13-1 oil field located in the South China Sea with two Japanese partner companies from 1993 to 2009. During those 16 years of operations, some 70 million barrels of crude oil was produced and sold in which NHODC enjoyed its 30% of interests. Its role in production ended on February 22, 2009 when the production period under the contract with the Chinese government came to an end and the oil field operations were transferred to China accordingly.
US Gulf of Mexico
AOC conducted an oil and gas exploration and development project in the U.S. through its subsidiary, AEDC (USA) Inc. AOC was the primary gas field operator for 14 years from 1990 to 2004, retaining 100% working interest, for production and sale of natural gas.