Japan-based refineries Idemitsu Kosan and Showa Shell Sekiyu have signed a memorandum of understanding (MoU) to merge in order to create a new company.
According to the companies, the new company NewCo will lead the effort to resolve various structural issues that are currently prevailing in the industry to improve the lives of Japanese citizens.
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The NewCo is expected to create a new policy and environment.
It would build a supply chain together with its dealers/distributors and business partners on a shared strategy to lead the reform of the Japanese oil industry.
Using its stabilised earnings base, the company will expand overseas, apply the experience and establish a new, Japan-originated business model for energy companies.
The basic strategy of NewCo for its domestic downstream and petrochemical businesses will be to perform better compared to its competitors.
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By GlobalDataIt will also actively integrate and rationalise the assets owned by the companies and pursue collaborations with third parties for better utilisation of existing assets.
The NewCo aims to make the most of the potential of its competitive refineries and expand the competitive petrochemical business.
Idemitsu said that the MoU has no binding effect and the companies plan to consult with each other and separately execute the legally binding agreement.
Image: An Idemitsu service station in Japan. Photo: courtesy of 100yen
