Gulf News reported that Exxon Mobil agreed to sell its Japanese business to local partner TonenGeneral Sekiyu KK in USD 3.9 billion deal as the world's largest energy company shifts focus to the higher returns from pumping oil and gas.

TonenGeneral will buy 99% of ExxonMobil Yugen Kaisha, a Japanese unit that mainly engages in refining and retail sales. ExxonMobil will retain 22% stake in TonenGeneral which will continue to have exclusive rights to use the Texas based company's brands in Japan.

The sale comes after Japan decided in 2010 to require oil companies to modernize facilities or cut refining capacity. While Japan's consumption is declining due to a shrinking population and greater use of hybrid and electric autos, the transaction also reflects Exxon Mobil CEO Mr Rex Tillerson's strategy of focusing on oil exploration.

The US Company said that ExxonMobil has continuously adapted its business model to meet the needs of Japanese society and its changing business environment.

The deal, which Exxon Mobil called a restructuring of its Japan business into a single asset, does not involve the US company's liquified natural gas marketing and sales or its specialty chemicals operations in the country.

Both companies said that ExxonMobil will continue to assist TonenGeneral with crude oil and products acquisition.

As TonenGeneral looks to craft a new alliance with ExxonMobil, the deal may also attract greater interest in the Japanese market, from rivals in the Middle East among others.

Mr Osamu Fujisawa an independent energy economist in Tokyo said that "Now what TonenGeneral needs to survive is a strategic partner. There are no Japanese refiners that can partner with Tonen. So, it should be someone from the Middle East."

Saudi Arabia's state oil company, the source of almost 31% of Japan's crude imports during the first 9 months of 2011, owns 15% stake in domestic refiner Showa Shell Sekiyu KK. The Abu Dhabi government owns 21% stake in Japanese refiner Cosmo Oil Company.

(Sourced from Gulf News)