Japan National Oil Corp. said Wednesday it has authorized a plan by subsidiary Japan Oil Development Co. to rehabilitate itself under court protection from creditors.
Japan Oil Development went to the Tokyo District Court earlier in the day seeking protection under the fast-track Civil Rehabilitation Law, the government-affiliated JNOC said in a statement.
The unit produces oil in Upper Zakum and four other fields off the coast of Abu Dhabi, the capital of the United Arab Emirates, and ships 200,000 barrels of crude per day to Japan -- equivalent to 4.8 percent of the nation's overall oil imports.
The company has fallen into financial difficulties partly as a result of a decline in crude oil prices and the yen's steep appreciation in the 1990s. It registered an accumulated deficit of 343.4 billion yen.
Abu Dhabi's decision to change the financial terms of oil production in the Upper Zakum field has diminished the prospect of Japan Oil Development seeing any improvement in earnings, thereby pushing the firm to rehabilitate its management under court protection from creditors, JNOC said.
JNOC also decided to support the decision because Japan Oil Development will play a key role in the gov- ernment's plan to create an oil developer by integrating it and two other JNOC-affiliated companies -- Inpex Corp. and Sakhalin Oil and Gas Development Cooperation Co.
Established in 1973, the company is capitalized at 365.2 billion yen. JNOC holds an 89.84 percent stake in the firm, with the rest owned by nine private-sector companies, including Overseas Petroleum Corp. and Mitsui Oil Exploration Co.