Nippon Oil, Mitsubishi Buy U.S. Gulf of Mexico Oil Field Stake

Nippon Oil Corp., Japan"s biggest refiner, and Mitsubishi Corp. jointly purchased rights to an oil and gas field in the U.S. Gulf of Mexico for $1.2 billion.

Nippon Oil and Japan"s largest trading company will each acquire an 11.6 percent stake in the K2 field from Anadarko Petroleum Corp., the two partners said in a joint press release in Tokyo today.


The investment follows Marubeni Corp."s $1.3 billion acquisition last year of oil and gas fields in the U.S. Gulf, when Japan"s fifth-largest trading company paid about $26 a barrel for reserves. Nippon Oil last acquired oil and gas assets in the U.S. Gulf from Devon Energy Corp. in April 2005.


Nippon Oil currently produces 10,100 barrels a day of oil equivalent from fields in the U.S. Gulf.


The refiner plans to increase crude oil output to 180,000 barrels a day by March 2008, from 150,000 barrels a day of oil equivalent now, drawing mostly on fields overseas. The company targets a further production increase to 300,000 barrels a day by 2015, or about a third of total fuel sales, President Shinji Nishio said on Feb. 16.


Nippon Oil will look at further opportunities to buy assets, especially in the Gulf of Mexico, South East Asia and the North Sea, Nishio said.


Anadarko held a 65 percent stake in K2, which currently consists of six wells off the southern coast of Louisiana. Production from the K2 field is now the equivalent of 40,000 barrels of oil a day, Nippon Oil and Mitsubishi said in the statement.


Anadarko said in March it had agreed to sell part of its stake in the K2 field to two undisclosed buyers for $1.2 billion.



News Code 104911

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