TOKYO (Reuters) - Japanese refiner TonenGeneral Sekiyu KK 5012.T said on Monday its decision to buy out a controlling stake in it held by U.S. oil major ExxonMobil (XOM.N) for nearly $4 billion was not triggered by Tokyo’s moves to force industry re-alignment.
TonenGeneral, Japan’s second-biggest refiner, said at a news conference that the buyout was to improve efficiency, and it is considering how to reduce refining capacity amid falling domestic demand.
Japanese government rules effectively require TonenGeneral to either build a new secondary unit or cut its crude refining capacity.
ExxonMobil will retain a 22 percent voting share in the Japanese oil giant, down from 50 percent, with the 302 billion yen ($3.94 billion) transaction set to be completed by June 1, TonenGeneral said on Sunday, confirming a Reuters report.
TonenGeneral officials also told Monday’s briefing that it has no plans to form capital alliances with state-run oil companies in the Middle East.
Showa Shell Sekiyu (5002.T) is owned 15 percent by state oil giant Saudi Aramco, while Cosmo Oil Co 5007.T is owned one-fifth by the Abu Dhabi government.
Oil demand in Japan, the world’s No.3 consumer, has been falling steadily for more than a decade, now standing at about 3.4 million barrels per day (bpd) from a record 4.2 million bpd in 1999.
The TonenGeneral move could encourage realignment among Japan’s oil refiners, which have been cutting capacity to cope with falling demand caused by a weak economy and a shift to more efficient and environmentally friendly forms of energy.
TonenGeneral, which imports and distributes Exxon oil in Japan, ranks as the country’s No.2 refiner behind JX Holdings (5020.T).
($1 = 76.7350 Japanese yen)
(Reporting by Risa Maeda; Editing by Michael Watson)
This story corrects company codes in paragraph 6