HIROFUMI MATSUO, Nikkei senior staff writer
TOKYO — Idemitsu Kosan‘s founding family is treading on treacherous ground as it attempts to block a planned merger with Showa Shell Sekiyu.
The family’s opposition to the deal, struck last November, has baffled the rest of the Japanese oil industry and apparently riled Saudi Arabia, the world’s largest oil exporter. The future of Japan’s second-largest oil distributor hangs in the balance.
Speculation about Saudi anger has swirled in the Japanese oil sector since the family’s stance came to light in late June. Saudi Arabian Oil Co., better known as Saudi Aramco, the kingdom’s state oil company, is Showa Shell’s No. 2 shareholder, after Royal Dutch Shell. The Saudi company intends to retain a stake in the new entity created through the Idemitsu-Showa Shell merger. Under the proposal, Idemitsu would buy Showa Shell shares held by Royal Dutch Shell.
The Niger Delta, which largely dominates the oil-rich Gulf of Guinea, did not join the league of other oil-producing regions in the United Kingdom’s North Sea, United States’ Gulf of Mexico and the Middle East’s Persian Gulf through the efforts of the federal government or the Nigerian National Petroleum Corporation (NNPC).
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