NIPPON MINING PLANS MORE U.S. JOINT VENTURES
Nippon Mining Co Ltd president Yukio
Kasahara said the state-owned Japanese firm hoped to find
additional joint venture partners to explore for U.S. oil
reserves.
    "We have to secure the stability of oil for Japan,"
Kasahara told reporters at the World Petroleum Congress. "In
the exploration area I think Japanese companies are interested
in joint ventures."
    Nippon Mining, for example, last September signed an
agreement with Dupont Co's <DD> Conoco Inc to participate in a
135 mln dlr exploration venture that includes six wells on land
and 14 offshore Louisiana. The first joint well drilled is in
the Gulf of Mexico's Green Canyon Block 182, a deepwater lease
that Conoco was almost forced to return to the federal
government undrilled because of low oil prices.
    "At this moment we have no success but we will proceed with
Conoco. Maybe by the end of the year we will find oil there,"
Kasahara said. He said that similar kinds of joint ventures
"would be best" for Nippon Mining's oil exploration efforts in
the future.
    Kasahara also said Nippon Mining was not planning to
acquire any U.S. refining or marketing outlets. "Retail sales
in general do not interest the Japanese oil companies," he
said.
    When asked whether he believed world oil prices might
strengthen later this year, Kasahara said he expected prices to
hold steady at today's level.
    "Within this year I think the 18 dlrs a barrel will
continue. But next year I don't know," he said. "For the
refining business, stability is important. Whether the price is
18 dlrs or 20 dlrs, we don't care."
    But encouraging additional upstream efforts may require
modestly higher oil prices, Kasahara added. "For exploration I
think 20 dlrs a barrel or 22 dlrs a barrel would be
reasonable," he said.
    The key factor in determining whether the Organization of
Petroleum Exporting Countries (OPEC) would raise its 18 dlr a
barrel benchmark price is the ongoing war between Iran and
Iraq, Kasahara said. Saudi Arabia, he added, was an uncertain
element in the OPEC equation because of its need to maintain
revenues at the same time the weakened U.S. dollar has reduced
oil profits.
    Nippon Mining, which like all Japanese crude buyers is
benefitting from the drop in the value of the dollar, favors
continuing to price OPEC crude oil according to U.S. currency
regardless of the dollar-yen relationship, Kasahara said.
    "I hope the dollar would strengthen eventually and continue
to improve. I would prefer to see the (OPEC) pricing remain in
dollars," he said.
 Reuter
