Cosmo Oil Company, Limited (the "Company") has approved, by board meeting held on September 18, 2007, and International Petroleum Investment Company ("IPIC") has approved, by board meeting held on September 16, 2007, a strategic partnership between the Company and IPIC to promote energy business in the Asia Pacific region including Japan. Set forth below are the background and summary of the agreement.
1. Background
- The United Arab Emirates ("UAE") is the second largest and one of the most reliable oil suppliers to Japan. Equally Japan is the largest oil importer from the UAE. Both countries have developed strong and mutually beneficial ties through stable oil trade for several decades.
- The Company has developed a very close and unique relationship with the UAE, especially with the Emirate of Abu Dhabi, through mutual cooperation in the field of culture, education and environmental issues, trade in crude oil and petroleum products, and, particularly, nearly 40 years of E&P operation, which began prior to the founding of the UAE.
- IPIC is an investment company, 100% owned by the Government of the Emirate of Abu Dhabi. It is a long-term strategic investor focused on developing strategic partnerships through minority investments exclusively in the hydrocarbon sector. It views these investments as long-term partnerships that can be used as a platform to grow and add value to its strategic partners, IPIC's portfolio and the Emirate of Abu Dhabi. IPIC's investment portfolio currently exceeds USD10 billion and consist of investments throughout Europe, Asia and the Middle East.
- The parties recognize that energy demand in the Asia-Pacific region is continuing to grow. In addition, Japan remains a key strategic market for the UAE, and the UAE will continue to be one of the most important suppliers of oil to Japan. This investment will further serve to strengthen the bilateral relationship between Japan and the UAE and create valuable business opportunities to aid the Company in its growth.
2. Summary of Agreement
| Date of agreement |
September 18, 2007 |
| Place of signing |
Emirate of Abu Dhabi, UAE |
| Signers |
| The Company |
Representative and Chairman, Keiichiro Okabe |
| IPIC |
Managing Director, Khadem Al Qubaisi |
| Infinity Alliance Limited |
Representative and Director, Mohamed Al Mehairi |
|
- The Company will allot the new shares to Infinity Alliance Limited (address: Geneva Place, Waterfront Drive, PO Box 3469, Road Town, Tortola, British Virgin Islands, Representative: Mohamed Al Mehairi, Khalifa Al Romaithi and Saeed Al Mehairbi ), which is a special purpose company established by IPIC. The number of new shares is 176 million, which is equivalent to approximately 20% of the total shares (including latent shares) after the new allotment. Consistent with its philosophy, IPIC intends to be a stable and long term shareholder of the Company. The Company and IPIC intend to cooperate closely to further increase the corporate value and the interests of the stakeholders.
- Subject to approval by its shareholders, the Company will accept two directors from IPIC to the board of directors (outside directors). The Parties will also establish a committee within the Company to discuss and evaluate opportunities for joint investment.
- The first projects to be evaluated are an upgrade of the Company's refineries with a view to strengthening petrochemicals, further expansion of petroleum products sales in the Asia-Pacific region (including US West Coast), E&P in Asia-Pacific and other areas within the Company's core areas, such as LPG business, fertilizer business utilizing ALA, and other opportunities which shall benefit both Parties. The Company also intends to work closely with energy companies in Asia and Europe which are in close relationship with IPIC by establishing an international network for products trading and joint investments.
- This partnership is non-exclusive and wedo not expect that this partnership will cause any negative effects to any of the other business partners of the parties, which either of the parties have already established. Both parties may continue to explore new opportunities either solely or jointly.
3. Outline of IPIC
| Name |
International Petroleum Investment Company |
| Type of business |
Investment outside the UAE exclusively in the energy(hydrocarbon) sector |
| Established |
May 29, 1984 |
| Head office |
Sheikh Zayed the First Street, Al Muhairy Center, Office Tower, 10th floor, Abu Dhabi, United Arab Emirates |
| Representative |
Managing Director Khadem Al Qubaisi |
| Principal shareholders |
UAE Government (100%) |
| Prior relationship with the Company |
None |
4. Schedule
| September 18, 2007 |
Board of Directors meeting of the Company |
| September 18, 2007 |
Signing of Agreement |
| December 2007 |
Extraordinary shareholders meeting of the Company planned |
5. Future Prospects
The strategic partnership and the allotment of new shares will not affect the consolidated/non-consolidated accounts for this fiscal year of the Company.
Details of new business opportunities will be discussed between the parties, and the Company will disclose all information deemed to be of significant importance in a timely fashion.
