Japex sells stake in Canada shale gas project
Japan Petroleum Exploration Co., Ltd. (JAPEX) announced that its Board of Directors has resolved to sell 10% of all ownership interest in the North Montney Joint Venture which undertakes the shale gas project in Canada (hereinafter “the NM project”) to Petronas Energy Canada Ltd. (hereinafter “PECL”), the operator of the NM project. The interest is owned by JAPEX Montney Ltd. (hereinafter “JML”), an overseas consolidated subsidiary.
The NM project proceeds with shale gas development and production in the North Montney area of British Columbia, Canada. JAPEX participated in the NM project through JML in April 2013 and had proceeded with a feasibility study of the LNG project in addition to the shale gas development and production. Even after the decision not to proceed with the LNG project in July 2017 due to changes in the business environment, JAPEX has been working with PECL and its partners to maximize the value of the NM project by optimizing the development plan.
On the other hand, JAPEX formulated the medium-term business plan in 2018 with the recognition of the necessity to transform our business structure for the sustainable growth even in the market environment of 50-60 US dollars per barrel. Based on the recognition, our E&P projects have been striving to improve their profitability by optimizing the business portfolio, including the sale of the asset.
The environment surrounding the E&P business is expected to become even more severe due to the prolonging effects of the COVID-19 since early last year, including the structural changes by the new normal after the COVID-19 and accelerating the global decarbonization. Therefore, JAPEX has decided to sell 10% of all ownership interest in the North Montney Joint Venture which undertakes the NM project to PECL, with the judgement that would be difficult to recover JML’s performance early.
JML is going to sign the contract concerning the interest sale with PECL on May 13, 2021.(MDT, local time in Calgary)All procedures of this sale are expected to complete by the end of June 2021.
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