By Shigeru Sato
Sept. 20 (Bloomberg) — Showa Shell Sekiyu K.K., the Japanese refining unit of Royal Dutch Shell Plc, bought a cargo of crude oil from Exxon Mobil Corp.’s $13 billion Sakhalin-1 project in Russia for the first time.
Showa Shell bought 700,000 barrels of the light, low-sulfur Sokol oil from Japan Petroleum Exploration Co., which has a stake in the project, a company official said, asking not to be identified in keeping with company policy, and declining to give the price. The shipment is expected to be loaded in November.
In August, Nippon Oil Corp., Japan’s largest refiner, agreed to buy a cargo of the same size from Sakhalin-1 to diversify its supply sources and benefit from lower shipping costs compared with importing similar low-sulfur oil varieties from Southeast Asia and West Africa. Japan relies on the Middle East for 90 percent of its oil.
The Sakhalin-1 project will raise production fivefold to 250,000 barrels a day this year. The project’s three offshore fields — Chayvo, Odoptu, and Arkutun Dagi — have recoverable reserves totaling 2.3 billion barrels.
Sakhalin-1’s partners are Exxon Neftegas Ltd., Japan’s Sakhalin Oil & Gas Development, two affiliates of OAO Rosneft and ONGC Videsh Ltd., a unit of India’s state-owned explorer. Sakhalin Oil & Gas Development is a Japanese joint venture, 50 percent owned by the government. Itochu Corp. and its unit own 18.12 percent. Japan Petroleum Exploration Co. has 14.46 percent and Marubeni Corp. 11.68 percent.
Inpex Holdings Inc., Japan’s largest oil and gas exploration company, now holds a 5.75 percent stake, and plans to buy additional shares from the Japanese government and increase its shareholding to 33 percent.
Oil from Sakhalin-1 will meet about 6 percent of Japan’s daily needs.
To contact the reporter on this story: Shigeru Sato in Tokyo at [email protected] .
Last Updated: September 20, 2006 00:11 EDT
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