Upstream Operations
Ongoing Projects
Arabian Oil Company, Ltd. (AOC), a core AOCHD group company responsible for exploration, development and production of oil and natural gas, is currently engaged in the exploration and development of crude oil in the Northwest October Block in the Gulf of Suez, Egypt. AOC produces oil at Gyda oil field in the Norwegian North Sea through its subsidiaries. AOC also holds a working interest on the re-development Yme oil field in the Norwegian continental shelf where commercial production is scheduled to be commenced in the 4th quarter 2009.
AOC is moving forward to explore new commercial opportunities primarily in the Middle East and Norway with an eye to expanding and strengthening its business foundation.
Gulf of Suez, Egypt
In February 2005, AOC won an international bid for oil & gas exploration and development project in the Northwest October Block of the northern Gulf of Suez, Egypt and inked a formal production-sharing contract with the Egyptian Government and the Egyptian General Petroleum Corporation in July of the same year.
In September 2006 exploratory drilling conducted by AOC under the contract confirmed the presence of enough oil to begin commercial production.
AOC established AOC Egypt Petroleum Company, Ltd. (AEPCO) in October 2008 as a wholly-owned subsidiary to move on with the project, and development work is currently underway. Production is expected to be commenced by May 2012.
Egypt Branch Office
Drilling rig in the Northwest October 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 10,000 barrels. In February 2009 NAEDC acquired a 10% interest in each of the production licenses for the Yme oil field, located between the Gyda oil field and Stavanger, as well as two adjacent exploration blocks from Talisman. Since the Yme oil field is a re-development field where development and production activities had previously been conducted, technical and cost risks are limited. The investment is expected to soon pay off with the early commencement of oil production. Construction of production facilities and drilling of production wells have already started. Oil production is forecasted to reach the peak rate of more than 40,000 barrels per day for the initial period and maintain 25,000 barrels per day approximate in average for the first four years from the commencement of production (AOC holds the rights to 4,000 barrels per day and 2,500 barrels per day respectively in accordance with its working interest).
Norske AEDC AS
Gyda oil field platform
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. AOC aims to use this experience as a springboard for entering upstream business activities in Iraq.
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.
Khafji-related Operations
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.
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.
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.
