Japex bases business plan on keeping stake in Russian Sakhalin-1 project

A standard watch of the liquefied natural fuel plant operated by Sakhalin Energy at Prigorodnoye on the Pacific island of Sakhalin, Russia July 15, 2021. Photo taken July 15, 2021. REUTERS/Vladimir Soldatkin

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TOKYO, March 28 (Reuters) – Japan Petroleum Exploration Co (Japex) (1662.T) mentioned its new prolonged-phrase business approach, unveiled on Monday, was dependent on an assumption that it would preserve its stake in the Sakhalin-1 oil and gas job in Russia.

Japan’s consortium, Sakhalin Oil and Gas Growth (SODECO), owns a 30% stake in the Sakhalin-1 project from which Exxon Mobil (XOM.N) has explained it would exit. Japex owns 15.285% in SODECO. Russian oil firm Rosneft (ROSN.MM) is also a partner for the job. browse much more

“Our new company program involves a contribution from the Sakhalin-1, however it does not account for a huge share as output is anticipated to decline,” Masahiro Fujita, Japex’ president, instructed a news convention on Monday.

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He also claimed condition-backed Japex was not likely to make new investments in Russia’s strength assignments supplied the latest Ukraine crisis.

For Japex, the Sakhalin-1 challenge is set to add 10 billion yen ($81 million) to the company’s estimated company income of 29.8 billion yen for the present economical yr to March 31.

The conclusion by Exxon, which has operated the Sakhalin amenities since output commenced in 2005, puts the destiny of a proposed multi-billion dollar liquefied pure gas (LNG) facility there in doubt.

“There had been a system to convert the gas into LNG for export, but with Exxon’s withdrawal, we are unable to tell what will transpire to it,” Fujita said.

Beneath the new small business program over next 9 years, Japex aims to raise its yearly organization income to 50 billion yen by the 12 months to March 2031, up 68% from this yr, by investing 450 billion yen in development parts in total, which include 230 billion yen in oil and gasoline exploration and generation.

“We want to buy stake in oil and gasoline assignments overseas, predominantly in the United States and North Sea,” Fujita reported.

Requested regardless of whether Japex was on the lookout for new concessions in situation it had been to get rid of its stake in Sakhalin-1, Fujita explained: “No matter of whether the project proceeds or not, we are exploring several possibilities for new overseas concessions,” introducing that there ended up no intentions to substitute the Sakhalin-1 concession with everything else.

($1 = 124.0500 yen)

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Reporting by Yuka Obayashi Modifying by Edmund Blair and Jane Merriman

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