Japan’s JOGMEC will be providing equity financing to CIECO, a subsidiary of ITOCHU, which holds a 12% participating interest in the exploration license P2170 area (Blocks 20/5b and 21/1d) offshore United Kingdom.
Japan Oil, Gas and Metals National Corporation said the estimated amount of equity financing would be around 3 billion Japanese yen, or around $27 million.
Following the transaction, JOGMEC and ITOCHU will each own a 50 percent of CIECO.
As for the North Sea block in question, CIECO was in 2014 awarded an exploration license P2170 (Block 20/5b and 21/1d) on the UK Continental Shelf (UKCS) jointly with Trap Oil Limited (now Jersey Oil & Gas Plc) as a result of the UK 28th Offshore Licensing Round.
The partners then strategically farmed-out an operating 70% interest to Statoil (U.K.) Limited in August 2016, leaving CIECO UK a 12% interest.
JOGMEC said on Thursday it would provide equity capital covering up to 50% of the exploration expenditures incurred by CIECO.
“This project with highly promising potential is expected to accelerate the diversification of Japan’s crude oil import if successful. In addition, JOGMEC’s support to CIECO V&C will enrich ITOCHU’s portfolio in the UKCS coupled with the Western Isles Development Project due to start oil production within this year where CIECO UK enjoys JOGMEC’s loan guarantee program,” JOGMEC said.