Japex sells stake in Canadian shale gas project to Petronas

Japan Petroleum Exploration Co (Japex) said it would sell its stake in a Canadian shale gas project to a unit of Malaysian energy giant Petronas.

Petronas Energy Canada, the operator of the North Montney shale gas project, will buy the 10 percent stake adding to the 62 percent stake it already has in the joint venture.

The project would have provided gas for the scrapped Pacific North West LNG project operated by Petronas.

“Even after the decision not to proceed with the LNG project in July 2017 due to changes in the business environment, Japex has been working with Petronas and its partners to maximize the value of the North Montney project by optimizing the development plan,” the firm said in a statement.

However, Japex said it expects the environment surrounding the E&P business to become “even more severe” due to the prolonging effects of the Covid-19.

Therefore, Japex has decided to sell all ownership interest in the joint jenture, with the “judgement that would be difficult to recover Japex Montney’s performance early.”

As a result of this transaction, Japex expects to record an extraordinary loss of about 493 million Canadian dollars ($406 million) in the consolidated financial results for the second quarter of the fiscal year ending March 31.

Japex added that all procedures related to this sale should complete by the end of June.

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