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JAPANESE FIRMS TO ACQUIRE U.K. ASSETS

Dec. 6, 1993

Mitsubishi Oil Co. Ltd. and Japan National Oil Corp. have agreed to buy U.K. North Sea assets from Petrofina SA, including interests in Andrew and Eastern Trough Area Project (ETAP) developments. The purchase will require the Japanese partners to invest about $200 million during the next 5 years. None of the assets involves current production. Natwest Markets Corporate Finance Ltd., adviser to Mitsubishi on the deal, said this probably is the largest investment by Japanese companies in the

Mitsubishi Oil Co. Ltd. and Japan National Oil Corp. have agreed to buy U.K. North Sea assets from Petrofina SA, including interests in Andrew and Eastern Trough Area Project (ETAP) developments.

The purchase will require the Japanese partners to invest about $200 million during the next 5 years. None of the assets involves current production.

Natwest Markets Corporate Finance Ltd., adviser to Mitsubishi on the deal, said this probably is the largest investment by Japanese companies in the North Sea to date.

Licenses and interests involved are:

30% in P225 covering Block 16/27a south, which includes part of the Andrew development prospect operated by BP Exploration Operating Co. Ltd.
5% in P059 covering Blocks 22/20 and 23/16a, which include ETAP prospects Mungo and Monan fields, respectively, also operated by BP.
17.1% in P111 which covers Blocks 22/25a, 23/22a and 30/3a and involves ETAP prospects Mirren, Medan, and Blane fields, respectively, all operated by BP.
15% in P593 covering Block 20/5c.
10% in P594 covering 21/5b.
10% in P801 covering Tranche 9 blocks west of the Shetland Islands. Tranche 9 consists of 12 blocks and partial blocks in Quadrants 202 and 204.

Paul Griggs, assistant director of origination for Natwest Markets, said development approval for Andrew field is expected very soon.

Andrew production is due within the next 4 years. BP has slated Andrew development for 1994, ETAP for 1995, and west of the Shetlands projects in 1996 (OGJ, Sept. 13, p. 38).

Mitsubishi has four refineries and 4,500 service stations in Japan. The company imported 125 million bbl of oil in the year ended last Mar. 31. It has upstream interests in Canada, Papua New Guinea, and Viet Nam.

Griggs said Mitubishi's move is part of a long term strategy to develop as an integrated oil company, reducing exposure to oil price volatility. Mitsubishi plans to use North Sea production to supply its Japanese refineries.

Petrofina subsidiary Fina Petroleum Development Ltd. will retain a 22.5% interest and operatorship of License P594 and a 23.33% interest in License P801.

A Fina spokesman said the company holds a large number of North Sea assets, and is currently investing heavily in Tiffany, Toni, and Alba field developments. Other major developments in the next few years will be in Britannia and Armada fields.