Cosmo Oil to Begin Gas Development Overseas

Tokyo, Jan. 21 (Jiji Press)--Major Japanese oil distributor Cosmo Oil Co. <5007> said Tuesday it has reached an agreement with major Spanish oil company Compania Espanola de Petroleos S.A.U. (CEPSA) to form an alliance for oil-related operations in the Middle East and South America. Through the alliance, Cosmo Oil will make its foray into gas development operations. The company is considering exporting gas produced with CEPSA to Japan. Imports of liquefied natural gas for thermal power generation have surged in Japan since the nuclear accident at Tokyo Electric Power Co.'s <9501> Fukushima No. 1 power in March 2011 led to a halt in nuclear power generation in the country. With the alliance, Cosmo Oil also plans to diversify its revenue sources by expanding its overseas operations amid sluggish domestic oil demand, planning to acquire crude oil and gas interests in the Middle East and South America. Cosmo Oil has strength in crude oil production in Abu Dhabi of the United Arab Emirates and Qatar. The company expects synergy effects from the alliance with CEPSA, which has oilfields in South America and North Africa. END