Japan Petroleum Exploration : Ending our Promotion of the Oil Sands Project in Canada, the Change in Subsidiary, the Recognition of Extraordinary Losses, and the Voluntary Return of Executive Compensation
July 30, 2021 at 09:12 pm IST
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Japan Petroleum Exploration Co., Ltd. (JAPEX) announced that its Board of Directors has resolved today to end our promotion of the oil sands project in Canada by Japan Canada Oil Sands Limited (JACOS), and to transfer all shares of JACOS, holding its 100% shares through Canada Oil Sands Co., Ltd. (CANOS), a consolidated subsidiary, to HE Acquisition Corporation (HAC).
As a result of this matter, JAPEX expects a change in the subsidiary, recognition of extraordinary losses in the fiscal year ending March 31, 2022, and voluntary return of executive compensation.
Ending our promotion of the Oil Sands Project in Canada
The Project promotes the development and production of oil sands in the Hangingstone leases in Alberta, Canada. JAPEX, through JACOS, has contributed to establish and spread the technology of oil sands development and production in Canada since the 1970s. At present, JACOS has been producing bitumen, an extra-heavy oil, of the range of 20,000 barrels per day in the current production area of the Hangingstone leases, which started production in 2017.
On the other hand, JAPEX formulated the medium-term business plan in 2018 with the recognition of the necessity to transform our business structure for the sustainable growth even in the market environment of 50-60 US dollars per barrel. Based on the recognition, our E&P projects have been striving to improve their profitability by optimizing the business portfolio, including the sale of the assets.
The environment surrounding the E&P business is expected to become even more severe due to the prolonging effects of the COVID-19 since early last year, including the structural changes by the new normal after the COVID-19 and acceleration of the global decarbonization. In light of this situation, we have decided to end our promotion of the Project and to transfer all shares of JACOS, after considering the medium- to long-term position of the Project as we continue to strengthen our resilience to low oil prices and a low-carbon environment.
We will promptly conclude the share transfer agreement between CANOS and HAC and proceed with the necessary procedures. For details on the share transfer, please refer to '2. Change in subsidiary.'
Japan Petroleum Exploration Co., Ltd. is a company principally involved in crude oil and natural gas related business. The Company operates in four geological segments. The Japan segment involves in the exploration, development, production, purchase, sale, transportation of crude oil and natural gas, the production, purchase, sale, transportation of petroleum products, as well as contracting work of mining wells. The North America segment involves in exploration, development, production, purchase and sale of crude oil, natural gas, as well as bitumen which is super heavy oil collected from the oil sand layer in North America. The Europe segment involves in the exploration of crude oil and natural gas in Europe. The Middle East segment involves in the exploration, development and production of crude oil and natural gas in Middle East.
Japan Petroleum Exploration : Ending our Promotion of the Oil Sands Project in Canada, the Change in Subsidiary, the Recognition of Extraordinary Losses, and the Voluntary Return of Executive Compensation
JAPAN PETROLEUM EXPLORATION CO., LTD. 
