Marubeni to buy stake in U.S. shale oil project

TOKYO Fri Jan 6, 2012 12:30pm EST

A sign of Japanese general trading company Marubeni Corp is seen at the company's head office in Tokyo July 27, 2009.   REUTERS/Stringer

A sign of Japanese general trading company Marubeni Corp is seen at the company's head office in Tokyo July 27, 2009.

Credit: Reuters/Stringer

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TOKYO (Reuters) - Marubeni Corp (8002.T) said on Friday it would pay $1.3 billion for a stake in a Texas-based shale oil project from privately held Hunt Oil Co, making the trading house the biggest shale oil reserve holder in Japan.

Marubeni will acquire a 35 percent stake in Hunt's oil and gas properties in the Eagle Ford formation in South Texas. The project started commercial production in October 2010 and is expected to reach peak output in about five years, with Marubeni's share worth more than 10,000 barrels per day of oil equivalent, a company spokesman said.

About 80 to 85 percent of output is crude oil, and plans call for marketing it in the United States, the spokesman said.

The Eagle Ford, which produces crude and more-profitable natural gas with a high liquids content, is a hot place for investment as U.S. crude prices hover around $100 per barrel.

After decades of building oil and gas production to help meet demand from Japan, the world's third-biggest oil consumer and the world's No. 1 liquefied natural gas user, the country's trading houses have been pursuing nontraditional reserves such as shale gas for new projects, as easy-to-find resources become scarce.

All five major Japanese trading houses have invested in shale oil and gas projects in North America, spending a total of more than $13 billion since Sumitomo became the first firm to take part in a shale gas development in 2009.

In November, Japan's Itochu Corp (8001.T) agreed to invest $1 billion for a 25 percent stake in Samson Investment Co as part of a larger $7.2 billion deal for the U.S. oil and gas company led by private equity firm KKR & Co (KKR.N).

(Reporting by Osamu Tsukimori, Bangalore Equities Newsroom; Editing by Michael Watson and Mark Porter)

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