The Revision of the JOGMEC Law in November 2016 :

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  • JOGMEC法改正について
  • JOGMEC法改正について : 2030年40%自主開発目標達成に向けて
  • JOGMECホウ カイセイ ニ ツイテ : 2030ネン 40%ジシュ カイハツ モクヒョウ タッセイ ニ ムケテ
  • For Achievement of the Self-Development Rate of 40% in 2030 as Japan's Energy Security Target
  • ―2030年40%自主開発目標達成に向けて―

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<p>Low oil price gives a negative impact to the capital investment in E&P activities, which could cause a steep oil price rebound in future. The price downturn decreases oil & gas asset value, consequently so China, India and other oil majors are accelerating many global asset deals through M&A. On the other hand, most Japanese companies cannot afford new investments, leading to diminishing international competitiveness, due to their difficult financial circumstances caused by long-term low oil price.</p><p>However, the current situation should be a golden opportunity for Japan to build up new assets under the Japanese flag and achieve earlier the goal of self-development rate of 40 % in 2030 as Japan's energy security target. Therefore, from the viewpoints of both of energy security and international competitiveness, Japanese government decided to amend JOGMEC Law to strengthen mainly JOGMEC's finance ability to push forward the private sectors' E&P activities.</p><p>JOGMEC's new functions enforced in November 2016 are as follows.</p><p>1. Financial support for M&A conducted by Japanese companies,</p><p>2. Adding equity support for the development stage after acquisition of interests,</p><p>3. Acquisition of NOC's shares that is difficult to implement by the private sectors,</p><p>4. Diversification of JOGMEC's fund-raising methods by debt financing with the government guarantee, and</p><p>5. Leasing of JOGMEC's geophysical survey vessel to the private sectors</p><p>Moreover, the government approved 500 billion JPY supplementary budget during 5-year concentrated investment term to support JOGMEC. At the same time, JOGMEC's project evaluation and risk management function was strengthened and several revisions were introduced to adequately implement the new law, such as intensive project screening, strict risk management procedure, strengthened corporate governance, and internal training and development of human capital.</p><p>The new JOGMEC Law was enacted to enhance Japan's energy security and international competitiveness, expecting JOGMEC to play crucial roles to attain these national goals by utilizing the new supporting tools actively and cooperating closely with private sectors.</p>

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