JX Nippon expands scope of original MoU with PT Pertamina

JX Nippon Oil & Gas Exploration Corporation (JX), a core operating company in the ENEOS Group, one of Japan’s leading conglomerates, has expanded the scope of a Memorandum of Understanding (MoU) with Indonesian state-owned oil and gas company PT Pertamina (Persero), to implement joint studies and business plans. 

The parties expanded the scope of the original MoU to cover the entire energy sector including the production of blue hydrogen/ammonia utilizing carbon capture and storage (CCS) technology. Signed in 2018, the original MOU only covered the upstream oil and gas sector including CO₂ Enhanced Oil Recovery (CO₂-EOR).

In collaboration with Japan Oil, Gas and Metals National Corporation (JOGMEC), JX will explore cooperation opportunities with Pertamina through joint study and business plan discussions, targeting the entire energy sector, with utilization of the experience, knowledge and technology of JX and JOGMEC. If business plans are confirmed to be feasible and the parties to the MoU agree, JX will promote such projects to contribute to the increased production of energy and the reduction of greenhouse gas.

JX has been promoting the transition to a “two-pronged” business approach starting this year, which consists of its conventional exploration and production (E&P) business and environmentally sustainable business. JX intends to maintain and strengthen its relationships with Indonesia, as well as expand its business which matches its “two-pronged” business approach in Indonesia.

In related news, JX Nippon Oil & Gas Exploration Corporation has signed an agreement with NEO Energy Upstream UK Limited for the sale of 100% share of JX Nippon Exploration and Production (U.K.) Limited, a subsidiary wholly owned by JX. The purchase price is based on the enterprise value of USD1.655 billion as of March 31, 2021, after adjustment for debt, working capital, etc. The transaction is subject to satisfaction of certain conditions precedent, including customary regulatory approvals.

“This transaction is part of our ongoing global portfolio management strategy to strengthen our upstream portfolio by selling projects that are no longer critical to our business. In line with this strategy, we have decided to sell our UK business to NEO which is an emerging upstream company,” said Hiroshi Hosoi, JX President and CEO.

JX is part of the ENEOS Group and is committed to the Group’s “Long Term Vision for 2040”, which includes contributing to the development of a low carbon society. 

In line with this Long Term Vision, JX has been investing in various sustainable projects in Vietnam, Malaysia, Australia and the U.S.A., including the Petra Nova CCUS project, one of the largest carbon capture projects in the United States.