(Recasts to cite Cosmo after its announcement)
TOKYO Jan 21 Japanese oil refiner Cosmo Oil Co
and Spain-based Compania Espanola de Petroleos (CEPSA)
have agreed to work together on crude and natural gas
development, the Japanese company said on Tuesday.
The agreement expands overseas investment opportunities for
Cosmo, which has been losing money in its domestic downstream
business due to falling oil demand as Japan's population
declines and because of a series of refinery outages.
The tie-up deepens cooperation with Abu Dhabi's state-owned
investment vehicle International Petroleum Investment Co (IPIC),
which owns all of CEPSA and is the biggest shareholder in Cosmo,
with a 20.8 percent stake.
The companies plan to work together in the Middle East,
where Cosmo has experience, and in North Africa and South
America, where CEPSA is active, the Japanese refiner said in a
The companies will also seek to develop natural gas fields,
Cosmo has 495,000 barrels per day (bpd) of refining
capacity, while CEPSA refineries total 527,000 bpd, the
Koji Moriyama, Cosmo's general manager of corporate
planning, said the alliance does not involve a capital tie-up.
It will last an initial two years with automatic annual
extensions, he said.
He told reporters that Cosmo Oil has no experience in gas
development and that the two firms could work jointly on some
projects if the fields have oil and gas reserves, adding that
it's possible to swap stakes in some existing projects.
CEPSA has recently started exploring two deep-water blocks
offshore Brazil that it acquired last year.
(Reporting by Osamu Tsukimori; Editing by Aaron Sheldrick and