Japan Petroleum Exploration expects to raise its equity output by 35% to 100,000 b/d of oil equivalent by fiscal 2019-2020 (April-March), and increase its proved reserves by 76% to 550 million boe by March 2020, the company said.
These are expected on the back of the planned start of bitumen output from undeveloped parts of the Hangingstone block in Alberta, Canada, and its participation in the Pacific Northwest LNG project.
At the end of March 31, Japex had equity output of 74,000 boe/d and proved reserves of 313 million boe, up 54% and 3% respectively year on year.
Increased output at Iraq’s Gharraf oil field and Canada’s shale gas assets were responsible for the production increase in the fiscal year to March 31, with the Canadian shale gas developments contributed to the increase in the proved reserves, the company said.
In its previous business plan that began in fiscal 2011-12, Japex targeted to produce 70,000 boe/d by the end of March 2016 and raise its proved reserves to 450 million boe by March 2021.
After achieving its previous equity output target in advance, Japex released its new five-year business plan from fiscal 2015-16, with a further intention to transform itself into a more integrated energy company over the next 10 years.
Over the five years to March 2020, Japex has earmarked a capital expenditure of around Yen 200 billion-220 billion ($1.7 billion-$1.8 billion), a majority of which is expected to be spent at overseas projects, including the Canadian oil sand, LNG projects as well as the Iraqi Gharraf oil field project.
CANADIAN, IRAQI PROJECTS
In Canada, Japex expects an initial 20,000 b/d of bitumen output from the undeveloped parts of the Hangingstone block once production starts at the end of 2016.
Japan Canada Oil Sands Ltd., a wholly owned subsidiary of Japex, owns a 100% stake in the 3.75 section of Block Hangingstone.
It holds a 75% stake in the undeveloped parts of Block Hangingstone, with Canada’s Nexen holding the remaining 25% Stake.
In mid-2015, partners of the Malaysian Petronas-operated Pacific Northwest LNG project aim to make a final investment decision for the 12 million mt/year liquefaction project.
Once the FID is made, it would help to increase Japex’s proved reserves as it holds a 10% stake from upstream to the planned Pacific Northwest LNG project in Prince Rupert, British Columbia.
In Iraq, oil output at the Gharraf field is expected to reach peak output of 230,000 b/d after 2017 when a final development plan is approved by Iraq’s oil ministry, a company official said.
In the fiscal year ended March 31, Japex shipped 4.7 million barrels of the medium grade crude from the Gharraf field over three shipments, which was blended and exported as Basrah Light.
This was up from its sole and maiden shipment of 1.56 million barrels in February 2014 during the previous fiscal year.
The Gharraf oil field produced an average of 84,000 b/d in 2014 after starting production at an initial rate of 35,000 b/d under a technical service contract with Iraq’s South Oil Co. in August 2013.
The consortium comprises Petronas, with a 45% stake, Japex Garraf (30%) and Iraq’s North Oil Co. (25%).
Japex holds a 55% stake in Japex Garraf, with state-owned Japan Oil, Gas and Metals National Corporation holding 35% and Mitsubishi 10%.
By 2025, Japex now aims to expand its annual natural gas handling volume to 2.5 million mt of LNG equivalent, compared with 1.2 million mt in 2014 and a plan of 1.5 million mt in 2019, by expanding its volumes, possibly from its existing projects as well as by making new procurement deals, the official said.
Japex plans to start its first LNG import terminal at Soma, in Fukushima in the northeastern Japan, by March 2018, while it has also tied up with Mitsui to prepare for a new 1.2 GW gas-fired plant adjacent to its Soma LNG terminal.
Japex aims to start up the 600 MW No. 1 unit by January 2020 and the 600 MW No. 2 unit by April 2020, in time for the Tokyo Olympic Games the same year.