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Japan’s equity oil, gas liftings volumes record 24.7% in 2014-15

Japan’s equity oil, gas liftings volumes record 24.7% in 2014-15

TOKYO: Equity oil and gas lifting volumes accounted for nearly a quarter of Japan’s total oil and gas supply in fiscal 2014-15 — the highest ever — led by higher liftings from the Gharraf oil field in Iraq, the Ministry of Economy, Trade and Industry said Monday.

The 2014-15 share of equity oil and gas liftings rose from 23.3% in 2013-14 to 24.7%, the highest since the government started collecting such data in fiscal 1973-74. The ratio is calculated by dividing the country’s oil and gas equity liftings by total oil and gas imports and domestic production volumes.

Japan’s equity ratio is expected to rise further in fiscal 2015-16 as Inpex has started selling its equity output from the Adco onshore oil concession from July loadings after striking a deal on April 27 with the Abu Dhabi government and state-owned Abu Dhabi National Oil Co. for a 5% stake in the concession for 40 years from January 1, 2015.

The deal has given Inpex the right to market 80,000 b/d of Murban crude from the concession, which covers Abu Dhabi’s key onshore oil fields: Bab; Bu Hassa; the Southeast Fields of Sahil, Asab, Shah and Mender; and Northeast Bab, Dabbiya, Rumaitha and Shanayel.

Japan aims to increase its share of equity liftings to 40% by 2030, with governmental supports from METI’s annually budgeted financial assistance through state-owned Japan Oil, Gas and Metals National Corp., as well as from state-owned Japan Bank for International Corp., Nippon Export and Investment and Insurance, and Japan International Cooperation Agency.

In the fiscal year ended March 31, Japan Petroleum Exploration recorded a full-year lifting of its equity crude produced at the Gharraf oil field in Iraq, coupled with Japan’s reduced imports of oil, and the start of LNG imports from Papua New Guinea, a ministry official said.

In fiscal 2014-15, Japan’s oil and gas equity lifting volumes came in at 1.322 million b/d of oil equivalent, up 2.2% from 1.293 million boe/d in the previous fiscal year, METI data showed.

In the fiscal year ended March 31, Japex lifted around 4.7 million barrels of the Iraqi crude. In fiscal 2013-14, it had just one shipment of 1.56 million barrels, its maiden cargo in February 2014.

The Gharraf field in southern Iraq started producing at an initial rate of 35,000 b/d under a technical service contract with Iraq’s South Oil Co. in August 2013 and was producing at an average rate of around 80,000-100,000 b/d in July, according to Japex.

The consortium comprises Petronas, with a 45% stake, Japex Garraf (30%) and Iraq’s North Oil Co. (25%). Japex holds a 55% stake in Japex Garraf, with state-owned Japan Oil, Gas and Metals National Corporation holding 35% and Mitsubishi 10%.

Japan, meanwhile, started importing PNG LNG in June 2014 after the commencement of the first of the two 6.9 million mt/year trains in April and the second train in May in the year. In fiscal 2014-15, Japan imported a total of 3.40 million mt of LNG from Papua New Guinea.

The PNG LNG project is owned by operator ExxonMobil (33.2%), Oil Search (29%), the PNG government’s National Petroleum Company of PNG (16.8%), Santos (13.5%), Japan’s JX Nippon Oil & Gas Exploration subsidiary (4.7%) and local landowner company MRDC (2.8%).