Former leftist guerilla Gustavo Petro…
Crude prices have fallen significantly…
Japanese energy major Tokyo Gas is set to acquire a 25 percent stake in an American shale gas field, allowing the firm to take advantage of low commodity prices that have left the asset underpriced.
The Eagle Ford —a major source of shale gas in the United States—will be bought for $48 million in early June from the American company VirTex Producing Co., which declined to provide a breakdown of the deal, according to Reuters.
Subsequent drilling would bring the price up to almost $77 million, the United Kingdom-based agency said.
The field will provide 200,000 tonnes per year of liquefied natural gas (LNG) for 20 years, Tokyo Gas said.
The same company spent around five million dollars to acquire another Texan shale gas field called the Barnett basin in 2013.
The Barnett purchase caused Tokyo Gas to report severe losses on the project twice due to falling energy prices.
Hisashi Nakamura, the company's senior general manager of global business department, told Reuters after a briefing that the firm will consider buying more U.S. stakes in future, despite previous losses.
"We would look for more deals if there are good ones, but only the cost-competitive projects that are profitable even at low prices would survive, so they are not found everywhere," he said.
Related: Big Oil Betting On Another Price Jump With Refinery Sales
Two other Japanese firms, Marubeni and Mitsui & Co., invested around one billion dollars each in Eagle Ford during the 2011-12 fiscal period.
Japan is the world’s largest importer of natural gas, according to a recent report by The Wall Street Journal.
The government has been leading efforts to secure the East Asian nation’s status as a trading hub for LNG in order to hold more influence in global energy markets.
By James Burgess of Oilprice.com
More Top Reads From Oilprice.com:
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…