Caltex Petroleum Corp., Dallas, last week disclosed it has signed a letter of intent for a billion dollar sale of a share of its ownership in the refining industry of Japan.
The agreement involves almost half a billion barrels a day of refining capacity at two plants in Japan, or about 10% of the countrys capacity. Oil & Gas Journal will list the countrys refining capacity at 4,866,950 b/cd at yearend 1995.
Caltex agreed to sell its interest in Nippon Petroleum Refining Co. (NPRC) to Nippon Oil Co. (NOC), Tokyo, its 50-50 partner in NOC, for 200 billion yen ($2 billion). Caltex and NOC also agreed to complete the trade by the end of first quarter 1996, ending a 44 year partnership in NPRC.
NPRCs refining capacity is 484,500 b/cd342,000 b/cd at Negishi and 142,500 b/cd at Muroran.
Caltex, a 50-50 venture of Chevron Corp. and Texaco Inc., will continue its other businesses in Japan. Those include oil trading and a 50% share in Koa Oil Co., Tokyo. The Japanese public owns the remaining 50% in Koa.
Koa operates two Japanese refineries with a combined capacity of 214,000 b/cd110,000 b/cd at Marifu and 104,000 b/cd at Osaka. It also holds substantial interests with NPRC and NOC in Tokyo Tanker Co. Ltd. and Nippon Oil Staging Terminal Co. Ltd. The latter operates an oil receiving terminal said to be the worlds largest.
NOC and Koa plan a long term accord for sale of refined products to NOC. Caltex also will continue to supply NOC certain kinds of crude at previously agreed volumes.
NOC and Caltex plan to continue to develop business ventures in Japan and other parts of the world.
Behind the sale
Caltex said the sale to NOC is part of its long term strategy to focus its activities on high growth areas throughout the Pacific Rim. NOC, Japans biggest oil company, sells petroleum products at more than 10,000 service stations in Japan.
Reuters news agency quoted industry sources as saying Caltex has been unhappy with low profits from Japanese refining. Sources also cited the possibility of a flood of cheap products in Japan upon decontrol of the countrys oil market, scheduled for Apr. 1, 1996. n
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