JAPAN GOVERNMENT TO SELL STAKE IN PNG GAS

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PORT MORESBY, Papua New Guinea (The National, March. 15, 2011) - The Japanese government has begun unloading its stake in a Papua New Guinea oil and gas joint venture with JX Holdings and Mitsubishi Corp.

Last Friday, the government through its trade ministry, offered its 62 percent stake (159,120 shares in the joint venture Japan-Papua New Guinea Petroleum Co.

The tender closes on March 31, with bids to be opened immediately.

But a buyer is unlikely to be finalized for several months after the tender closes due to a need to clear various procedures involving the sale of a stake in an unlisted firm, a trade ministry official said.

The tender was part of a policy to divest upstream energy stakes held previously by now-defunct Japan National Oil Corp, once the sale was finalized, the official added.

The venture’s wholly owned unit Merlin Petroleum Co has a 4.7 percent stake in Exxon Mobil-led US$15 billion liquefied natural gas (LNG) project.

Japan’s JX Nippon Oil & Gas Exploration Corp, a wholly owned unit of JX Holdings, holds 36.4 percent of the venture, while Mitsubishi has the remaining 1.6 percent.

Exxon is the biggest stakeholder in the Papua New Guinea- LNG project, which will produce 6.6 million tons per year of LNG when it comes online in 2014.

The trade ministry last sold its share of upstream stakes in North Sea and Thai ventures in 2008 for a total of US$374 million to two Japanese explorers.

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