Japan Petroleum Exploration (Japex) has decided to sell its 10% interest in the Canadian shale gas project to Petronas Energy Canada (PECL) for an undisclosed sum.
Japex will divest its stake in the North Montney (NM) joint venture through its subsidiary Japex Montney.
The NM is responsible for shale gas development and production in the North Montney area of British Columbia.
The shale gas project would have provided gas for the Pacific North West LNG project, which was cancelled in 2017 due to challenging environment and low prices.
In a press statement, Japex said: “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 PECL and its partners to maximise the value of the NM project by optimising the development plan.”
However, Japex said its decision to exit the Canadian shale asset comes as it anticipates a more severe environment that surrounds the E&P business.
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This is due to the prolonging Covid-19 effects, including aftermath structural changes, and accelerating the global decarbonisation, the firm noted.
In 2018, Japex framed the medium-term business plan, which involves transforming its E&P business structure to ensure sustainable growth even at $50-$60 a barrel oil price environments.
The firm said in a statement: “Based on the recognition, our E&P projects have been striving to improve their profitability by optimising the business portfolio, including the sale of the asset.”
Others firms involved in the Canadian shale gas project include Petronas Group (62%), Sinopec Group (15%), Indian Oil Group (10%) and Petroleum Brunei Group (3%).