The government plans to let three Japan National Oil Corp. affiliates integrate operations as part of reforms to dissolve the money-losing state oil developer in two years, industry ministry officials said Thursday.
According to a plan drafted by the Ministry of Economy, Trade and Industry, the debt-swamped Japan Oil Development Co. will integrate management with operationally sound Inpex Corp. and Sakhalin Oil and Gas Development Co.(Sodeco), they said.
The resulting enterprise will aim to list on a stock exchange in the future, the officials said.
Japan Petroleum Exploration Co. will meanwhile go public on its own. METI plans to auction off or liquidate the remaining 70 or so affiliates.
The planned JNOC dissolution, expected to take place in March 2005, is part of Prime Minister Junichiro Koizumi’s administrative reform initiative, which aims to abolish or privatize all special public corporations.
The plan will be finalized after the opinions of experts and oil industry officials are heard, they said.
But the ministry is ready to change in a flexible manner the restructuring outline if there are companies willing to acquire these oil development affiliates and make offers.
Japan Oil Development, which explores oil deposits mainly in the Middle East, suffered a cumulative loss of 340 billion yen as of last March 31 and is considered unable to rehabilitate itself.
In fiscal 2003, which starts in April, the firm is expected to file for court-administered revival under a fast-track civil rehabilitation law, and be absorbed in the end by the two designated partners, which are also active overseas, they said.
Japan Petroleum Exploration, which produces natural gas and crude oil in Japan and owns major gas pipelines, will be maintained as is.
The ministry aims to use the proceeds from listing these firms to dispose of the debts amassed by JNOC.
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