Bloomberg News

Exxon Mobil to Sell Part of TonenGeneral Stake, Reuters Says

January 29, 2012

Jan. 29 (Bloomberg) -- Exxon Mobil Corp. plans to sell part of its 50 percent stake in oil refiner TonenGeneral Sekiyu KK to the Japanese partner, Reuters said last night, citing four officials with direct knowledge of the plan.

The sale may be worth as much as 300 billion yen ($3.9 billion), according to the report. Exxon Mobil will retain a stake of about 20 percent in the Japanese refiner, Reuters said.

Exxon Mobil will also sell all of its 50 percent stake in Kyokuto Petroleum Industries Ltd., a refining venture with Mitsui & Co., and the Japanese retail business to TonenGeneral, Nikkei newspaper said today, citing no one.

Kosuke Kai, a spokesman for Exxon Mobil and TonenGeneral in Tokyo, said by phone today that he could not comment on the reports. TonenGeneral is not the source of the media reports and will communicate any further information to the Tokyo Stock Exchange and other stakeholders, the company said in a statement on the Exxon Mobil website yesterday.

Exxon Mobil’s sale comes after Japan decided in 2010 to require that oil companies modernize facilities or reduce output. The government urged refiners to increase the proportion of gasoline and gasoil they produce from residue, a cheaper way to extract fuel.

Residue-processing facilities such as coker units and residue fluid catalytic crackers that can produce gasoline and gasoil components from fuel oil cost around 100 billion yen to build, according to Credit Suisse Group AG.

Focus on Extraction

Leaving the refining and retail businesses in Japan would fit with Exxon Mobil Chief Executive Officer Rex Tillerson’s strategy to focus the Irving, Texas-based energy company on the higher-profit extraction operations. It also opens the Japan market to Exxon Mobil’s competitors.

Saudi Arabia’s state oil company, the source of nearly 31 percent of Japan’s crude imports during the first nine months of 2011, owns a 15 percent stake in Showa Shell Sekiyu KK, the Asian nation’s second-largest refiner by capacity.

--With assistance from Jacob Adelman in Tokyo. Editors: Jim McDonald, Pavel Alpeyev

To contact the reporters on this story: Yuji Okada in Tokyo at yokada6@bloomberg.net; Yuriy Humber in Tokyo at yhumber@bloomberg.net

To contact the editors responsible for this story: Paul Tighe at ptighe@bloomberg.net


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