Eric Watkins
Senior Correspondent
LOS ANGELES, May 29 -- Japan Petroleum Exploration Co (Japex) plans to invest ¥240 billion over the next 5 years to double reserves to 350 million boe by March 2013 from 170 million bbl of crude at the end of March 2007.
Japex intends to spend 80 billion yen on exploration, including 50 billion yen domestically, including 20 or so test and exploratory wells. The company identified several priorities of its domestic exploration investment policy:
-- Yufutsu-type geological structure in onshore and offshore mid-southern Hokkaido and green tuff formation in the Niigata area. Although geological risks are relatively high in these areas, Japex said "a vast amount of gas reserves" is expected.
-- In terms of "exploration aimed at field growth," Japex is looking at the Yufutsu area in Hokkaido; the Kosei, Yurihara, and Ayukawa areas in Akita prefecture; and in Niigata, the Kitakanbara area and the area in the vicinity of offshore Higashi-Niigata and Iwafune-oki. Japex said that prospective reserves in the surrounding areas of each of these oil and gas fields are relatively medium-scale, yet, geological risks are low enough to generate earnings from additional reserves in relatively short term periods.
Japex also said it would invest 160 billion yen to develop and explore projects outside Japan, including in Libya, Indonesia, and Canada. The following are some key areas identified in its overseas investment policy:
-- Southeast Asia centering on Indonesia. Japex acquired oil and gas interests in Block A and the Kangean Block in Indonesia. It plans to conduct exploration and development operations in these areas and cultivate them "to serve as our overseas operation hub while focusing also on the discovery of new projects."
-- The Middle East. In Iraq, based on the MOU for technical assistance with the Ministry of Oil, Japex will continue to conduct joint studies and provide technical assistance and training to bolster its relationships with the ministry. In other areas in the Middle East, Japex said it will seek opportunities to acquire interests in discovered/undeveloped or in-production oil fields, and IOR or EOR projects, primarily in the Gulf region.
-- North Africa. The firm will conduct exploration operations in two blocks already acquired in Libya and will continue seeking to acquire interests in discovered-undeveloped or in-production oil fields further interests there and in Algeria, Egypt, and other regions.
-- Canada. In the oil sands project, Japex will continue oil production using the steam assisted gravity drainage process in the 3.75 section producing area. It is conducting geological evaluation in the Hangingstone area and is set to conduct environmental impact assessments as an initial step.
Earlier this month, Japex started environmental impact assessment at an undeveloped part of Hangingstone Block in Alberta, Canada, to boost bitumen output there from fourth-quarter 2014.
Japan Canada Oil Sands Ltd., a wholly owned subsidiary of Japex, owns the 3.75 section of Hangingstone Block, south of Fort McMurray where the Japanese firm currently produces 8,000 b/d of bitumen.
Contact Eric Watkins at [email protected].
