Japanese oil company JX Nippon Oil & Gas has agreed to buy Japan’s only drilling rig company as part of its move into carbon capture and storage (CCS).
The company is acquiring the entire issued shares of Japan Drilling Co (JDC) from domestic private equity outfit Aspirant Group Inc for an undisclosed fee.
JDC operates four offshore drilling rigs, three jack-ups — the Hakuryu-10, Hakuryu-11 and Hakuryu-14 and one semi-submersible — the Hakuryu-5. It also operates a drillship designed for scientific drilling operations, according to Esgian Rig Analytics.
“We will proceed with the procedures to obtain the required regulatory approvals with the aim of completing the acquisition around the end of April of this year,” JX Nippon said.
“Upon completion of the acquisition, JDC will become a consolidated subsidiary of JX, and we will continue to work with JDC as a partner to increase the corporate value of JDC and pursue its stable and continuous growth.”
JDC is the only company in Japan engaged in the offshore drilling business, and has built up a reputation internationally for its technical capabilities.
“Through our collaboration to date, we have placed a great deal of trust in the human resources and technological capabilities of JDC, particularly in its drilling operations and safety management capabilities,” said JX Nippon.
“We believe that, once JDC, which is also a valuable asset to Japan, joins with our group, our competitiveness in the oil and natural gas development business will further strengthen.”
Oil company and shipowner Eneos, JX Nippon’s parent company, has committed to work toward achieving carbon neutrality for its own emissions by 2040.
JX Nippon says it has accumulated experience in the CCS and carbon capture, utilisation and storage (CCUS) through various projects, especially the Petra Nova CCUS project in the US, one of the largest CCUS projects in the world.
“Drilling wells to inject and store CO2 underground is an important technological component of the CCS/CCUS value chain, and JDC’s participation will further reinforce the CCS/CCUS value chain offered by the Eneos Group and enhance its set-up and capabilities to help Japan achieve its carbon neutrality plan,” the company said.
In January 2023, JX Nippon, Eneos Corp and Electric Power Development Co teamed up to establish a joint venture, West Japan Carbon dioxide Storage Survey Co.
The three companies are jointly working on a feasibility study for the acceleration of large-scale CCS in Japan to reduce CO2 emissions.
The intention is to select candidate sites for CO2 storage in western Japan, where the sources of Eneos and J-Power emissions are located and where the potential for CO2 storage is anticipated, with the aim of starting CO2 injection in 2030.
