Japanese trading firm Sumitomo will look to increase its services and related business in the U.S. shale patch, three years after quitting shale production operations, Sumitomo president Shingo Ueno told Bloomberg in an interview published on Monday.
In early 2021, Sumitomo sold the last of its production assets in the U.S. shale patch, divesting its oil-producing operations in the Eagle Ford. Prior to that deal, Sumitomo sold its Marcellus Shale Gas development project and its relevant assets in Pennsylvania.
The Japanese trading firm now seeks a more prominent role in U.S. shale without returning to production.
Sumitomo will be looking to increase sales of pipelines used in U.S. shale fields, Ueno told Bloomberg. The company plans to take advantage of its strength in related businesses rather than return directly to production in America, the manager added.
"Shale is perhaps one of the most important natural resources for the US," said the executive, who became Sumitomo's president in April.
Sumitomo's exit contrasts with the strategies of other Japanese firms that have recently acquired U.S. shale assets amid an ongoing consolidation wave in the American oil and gas industry.
At the end of last year, Tokyo Gas Co., Ltd announced the acquisition of Rockcliff Energy II LLC, a portfolio company of Quantum Energy Partners, through its ownership interest in TG Natural Resources LLC (TGNR).
Tokyo Gas has been expanding its upstream business in the U.S. through TGNR, which became its subsidiary in 2020.
Tokyo Gas Group's plan through 2025 envisages that Tokyo Gas expand its shale gas business. TGNR has been seeking to acquire superior assets around its existing assets in Texas and Louisiana, the company said.
Last week, Mitsui & Co. completed the acquisition of an unconventional gas asset in Texas from U.S. oil and gas E&P companies, Sabana, LLC and Vanna, LLC. This asset, named Tatonka, has access to the Gulf Coast industrial area, which includes LNG export terminals and ammonia plants, Mitsui said.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
U.S. Gasoline Prices Post Super Rare Double-Digit Weekly Drop
Oil Prices Fall After API Reports Large Surprise Builds in Crude And Products
Oil Price Plunge Hits BP and Shell Shares
Washington Looking to Revive More Shuttered Nuclear Plants
Rongsheng Becomes Next Chinese Refiner to Buy Trans Mountain Oil