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.

Coronavirus pandemics have hit the economy hard and energy producers have suffered severely over the past year as crude prices have fallen. Oil and gas companies have had to cancel projects and cut costs, raising concerns that fuel supplies may be down by the end of this decade as demand recovers.

Oil companies usually need to develop new deposits to replace the old, declining zones, which they had to do on a tight budget due to the impact of the virus industry. But Abu Dhabi is taking additional steps to work through the recession to increase the capacity of unrefined pumps.

The state-owned Abu Dhabi National Oil Co. said in a statement on Wednesday that Cosmo would invest about $145 million in the exploration phase of Offshore Block 4. Abu Dhabi holds most of the UAE’s oil, OPEC’s third largest producer.

If Cosmo discovers commercial quantities of oil and gas, it could enter into a 35-year discount agreement to produce it. Adnoc will have the option to share 60% of the production stake, it says. Any crude found can take a few years to develop and come to market.

Adnoc will spend $122 billion over the next five years, helping to increase its capacity from five million barrels a day by 2020 to about 4 million now. Last year the UAE opposed the production limits imposed by the Organization of Petroleum Exporting Countries, arguing that they were too low.