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

Japan Petroleum Exploration Co

28/03/2022 12:35

(Adds quotes, business plan's details)
    TOKYO, March 28 (Reuters) - Japan Petroleum Exploration Co
(Japex)  1662.T  said its new long-term business plan, unveiled
on Monday, was based on an assumption that it would keep its
stake in the Sakhalin-1 oil and gas project in Russia.
    Japan's consortium, Sakhalin Oil and Gas Development
(SODECO), owns a 30% stake in the Sakhalin-1 project from which
Exxon Mobil  XOM.N  has said it would exit. Japex owns 15.285%
in SODECO. Russian oil company Rosneft  ROSN.MM  is also a
partner for the project.  urn:newsml:reuters.com:*:nL1N2V41JP
    "Our new business plan includes a contribution from the
Sakhalin-1, though it does not account for a large share as
output is expected to decline," Masahiro Fujita, Japex'
president, told a news conference on Monday.
    He also said state-backed Japex was unlikely to make new
investments in Russia's energy projects given the current
Ukraine crisis.    
    For Japex, the Sakhalin-1 project is set to contribute 10
billion yen ($81 million) to the company's estimated business
profit of 29.8 billion yen for the current financial year to
March 31.
    The decision by Exxon, which has operated the Sakhalin
facilities since production began in 2005, puts the fate of a
proposed multi-billion dollar liquefied natural gas (LNG)
facility there in doubt.
    "There had been a plan to convert the gas into LNG for
export, but with Exxon's withdrawal, we can't tell what will
happen to it," Fujita said. 
    Under the new business plan over next nine years, Japex aims
to boost its annual business profit to 50 billion yen by the
year to March 2031, up 68% from this year, by investing 450
billion yen in growth areas in total, including 230 billion yen
in oil and gas exploration and production.
    "We want to buy stake in oil and gas projects overseas,
mainly in the United States and North Sea," Fujita said.
    Asked whether Japex was looking for new concessions in case
it were to lose its stake in Sakhalin-1, Fujita said:
"Regardless of whether the project continues or not, we are
exploring various possibilities for new overseas concessions,"
adding that there were no intentions to replace the Sakhalin-1
concession with anything else.    
    ($1 = 124.0500 yen)

 (Reporting by Yuka Obayashi; Editing by Edmund Blair and Jane
Merriman)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))