Mitsui expects to acquire a stake in Tangguh LNG
Tuesday, February 8 2005 - 03:42 AM WIB
Mitsui offered 2.5 billion yen ($23.99 million) for 66.67 percent of Overseas Petroleum Corporation, which owns 1 percent of Tangguh, Tokyo-based spokesman Eiki Okada said on Monday.
The acquisition may give Mitsui the right to bid for the 5.5 percent stake held by Japan National Oil Corporation, which participates in the BP Plc.-led Indonesian venture alongside Kanematsu Corporation and Overseas Petroleum.
Japan National Oil must find a buyer for its stake in the project under a government plan to sell all the company's assets.
"Existing partners were given the right of first refusal when JapanNational Oil assets were put up for tender previously," said Kazuma Ito, a spokeman at state-owned Japan National Oil in Tokyo.
Ito wouldn't comment on the timing or conditions for the sale of Japan National Oil's stake in Tangguh.
Japan National Oil, Kanematsu and Overseas Petroleum hold a combined 10 percent stake in Tangguh through the KG Wiriagar and KG Berau companies.
Kanematsu owns around 3.5 percent of the project.
Mitsui failed last year to join the world's largest LNG project after CNOOC Ltd. and LNG Japan Corporation matched its $236 million bid for BG's 10.7 percent stake.
The trading company's offer for Overseas Petroleum that would give it a 0.667 percent stake in Tangguh values the project's equity at $3.6 billion.
That's 64 percent more than the $2.2 billion value CNOOC and LNG Japan placed on the venture when they bought BG's stake in March 2004.
"We're getting people and know-how, with stakes in two Alberta and Kansas projects that produce oil amd gas, in addition to the Tangguh stake," Mitsui's Okada said. Overseas Petroleum has about 20 staff, he said.
Overseas Petroleum's other shareholders, which include Tokyo Electric Power Co. and Tokyo Gas Co., have accepted Mitsui's offerto raise its 2.23 percent stake in the company to a majority, Okada said. The transaction may still be challenged by other bidders, he said.
Japan National Oil is being wound up after its accumulated 770 billion yen ($7.39 billion) oflosses and 1.9 trillion yen of debt during 37 years of drilling. The government sold former Japan National Oil unit Inpex Corporation in November for 60 billion yen and has a target of March 31, 2005 to sell or shutdown Japan National Oil's remaining oil and gas intersts.
"The sale of Japan National Oil's assets is still continuing with tenders for other assets in addition to Tangguh being organized," Ito said.
BP, with a 37.2 percent stake, is the operator of the Tangguh project that entails building two LNG production lines with a combined capacity of 7.8 million tons a year. Operations are scheduled to start by 2007.
CNOOC holds a 17 percent in Tangguh;Mitsubishi Corporation and Inpex hold a combined 16.3 percent; a Nippon Oil Corporation-led company has a 12.2 percent stake and LNG Japan holds the remaining 7.2 percent. (*)