Japan's JXNippon Takes Big Interest in UK

JX Nippon Oil & Gas Exploration of Japan could invest as much as €2 billion in the UK continental shelf, according to reports.

The Japanese company’s UK offshoot is preparing for major UK projects after agreeing to a set of significant asset purchases from Eni of Italy.

Last week JX Nippon signed the sale and purchase agreements with Eni covering the Italian company's entire interests in 17 producing fields and several discoveries either being developed or close to development.

One of the deals means JX Nippon now holds a 28.89% stake in the Mariner field, where Statoil has decided to go with a $7 billion (€5.3bn) development project.

The Japanese conglomerate is also increasing its stake in the Andrew, Magnus, ETAP, Kinnoull and Merganser fields as well as increasing its holding in the Culzean gas condensate development from 17.07% to 34.01%.

In a company statement, JX said the acquisitions represented "part of the plan to build a long-term robust profit centre in the UK".

The deals also see JX Nippon establish a foothold in the Flotta Catchment Area including the Claymore field.

JX Nippon said its UK subsidiary “will make a significant investment in the UKCS over the next several years that will raise equity production by the end of the decade to around 40,000-50,000 barrels of oil equivalent per day”.

While not putting a figure on this investment, it is understood to be in the multiple of billions of dollars and more specifically around the $2 billion mark. This investment is in addition to the money spent on the purchases from Eni.