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Japan's JX looks to Saudi for oil on Iran worries Japanese refiner JX Nippon in talks with Saudi Arabia and other producers to source crude to replace disruptions to Iranian supply following US sanctions
Japan's biggest refiner JX Nippon Oil & Energy Corp is talking with top exporterSaudi Arabiaand other oil producers to source crude to replace any disruption to its imports from Iran, the company's president said on Thursday. Fresh US sanctions on Iran over its nuclear programme could make it difficult for refiners inJapan, Iran's number three crude buyer, to pay Tehran for its oil. Japan is seeking an exemption to US sanctions that President Barack Obama signed into law on Saturday. The sanctions, if enforced, would penalise financial institutions for undertaking transactions with Iran's central bank, exposing the US operations of Japanese banks that deal with Iran. "We've been talking to Saudi Arabia and others on possible scenarios in the case of an import ban (from Iran)," Yasushi Kimura, president of JX Nippon, the wholly-owned downstream oil subsidiary of JX Holdings Inc, told a group of reporters. "We cannot say we're all right without it," Kimura said, referring to Iran's oil. "But we have to prepare ourselves to deal with the time when we get none." Japan imported just under 312,000 barrels per day of Iranian crude in the first 11 months of the year, according to government data. That's around 10 per cent of Japan's total oil imports. JX Nippon buys around 70,000 to 80,000 bpd from Iran, industry sources said. The oil firm in November agreed an annual term contract with Iran for 2012 at a volume unchanged from 2011, Kimura said, although he declined to give details on the actual volume. It has other term contracts that start in other months and buys no Iranian crude in the spot market, he added. Refiner Showa Shell Sekiyu KK, another big Japanese buyer of Iranian crude, said it is waiting for the results of talks between Japan and the United States on Iran before making any decision on a new term contract. Showa Shell has a term contract ending in March but has yet to start talks on a new deal, the company's president Jun Arai told a group of reporters at the same gathering. "We should take into account what the national interest is in a country where almost no crude is produced," Arai said. "I think we should take good care of any country which has long been supplying crude to us."
