Idemitsu Kosan Co., Ltd. (Head office: Chiyoda-ku, Tokyo; President: Akihiko Tembo) announced today that it made a spot purchase of Venezuelan Santa Barbara crude oil totaling 400,000 barrels (approx. 60,000 kℓ) from Mitsui & Co., Ltd. ("Mitsui" hereinafter) and Marubeni Corporation ("Marubeni" hereinafter).
The purchase of Venezuelan Santa Barbara crude oil is the first time for the Company.
The Venezuelan Santa Barbara crude oil will be shipped from Bonaire north of Venezuela in the middle of August this year and arrive at Idemitsu’s Chiba Refinery in the early October 2007.
Santa Barbara crude oil is produced in Monagas State of Venezuela and its production is 160,000 barrels per day. It is of high quality with API gravity 39.3 and 0.31 wt% of sulfur content.
The major reason for the decision of this spot purchase of Santa Barbara crude oil is its economic advantage compared with the Middle Eastern crude oil.
The Company will continue to enhance the relationship with oil-producing countries in the Middle East, and at the same time, will diversify crude oil suppliers taking consideration of geopolitical risks.
In addition, this spot purchase is based on the frame contracts concluded between Mitsui and Marubeni, and Petróleo de Venezuela S.A., ("PDVSA" hereinafter) for purchase of Venezuelan crude oil and petroleum products on February 21, 2007. Both Mitsui and Marubeni are entitled to off-take crude oil and petroleum products from PDVSA for 15 years as funds for repayment of loan facilities (US$3.5 billion) jointly granted to PDVSA by Mitsui and Marubeni, with the support of the Japan Bank of International Cooperation.
