#AbuDhabi Banks on Decades of Oil Use in Cosmo Exploration Award - Bloomberg

Abu Dhabi Banks on Decades of Oil Use in Cosmo Exploration Award - Bloomberg

Abu Dhabi awarded Japan’s Cosmo Energy Holdings Co. the right to explore for offshore oil and natural gas as the Middle Eastern emirate seeks to expand its output capacity.

Energy producers have been hit hard over the past year as the coronavirus pandemic hammered economies and crude prices plummeted. Oil and gas firms have had to cancel projects and cut spending, increasing concern that fuel may be in short supply later this decade as demand recovers.

Oil companies generally need to develop new deposits simply to replace older, depleting areas, something they’ve had to do on tighter budgets due to the virus’ impact on the industry. But Abu Dhabi is taking the additional step of working through the downturn to expand its ability to pump crude.

Cosmo will invest as much as $145 million in the exploration phase at Offshore Block 4, government-owned Abu Dhabi National Oil Co. said Wednesday in a statement. Abu Dhabi holds most of the oil in the United Arab Emirates, the third-largest producer in OPEC.