Mitsubishi Oil Posts US$110.6 Million Pre-Tax Loss, Edison International Buys 40% Stake in Contact Energy

Strategic Insights -

The global energy sector experienced significant developments in March 1999, marked by Mitsubishi Oil's unexpected pre-tax loss and Edison International's acquisition of a 40% stake in New Zealand's Contact Energy. The liquified natural gas (LNG) industry also launched a marketing body, signaling a shift towards capturing new businesses outside Japan. In India, a committee recommended a US$5.1 billion LNG project to meet the fertiliser sector's feedstock needs, while the government sold its 60% stake in Lubrizol India to Indian Oil Corporation.

Key Takeaways:

  • Mitsubishi Oil Co. expects to post a 13 billion yen (US$110.6 million) pre-tax loss for the year ending March, a sharp deterioration from the earlier estimate of 9 billion yen loss.
  • The oil distributor blamed a greater-than-expected decline in sales volume of petroleum products amid the economic slump and smaller profit margin of petrochemical products.
  • Edison International announced that its wholly-owned subsidiary, Edison Mission Energy, will pay approximately $625 million (NZ$1.21 billion) for a 40% stake in New Zealand government-owned Contact Energy Ltd.
  • The liquified natural gas (LNG) industry has launched a gas marketing body, which has fuelled speculation about a rift between several key players.
  • A high-powered committee of the Indian fertiliser industry recommended a Rs218.32 billion (US$5.1 billion) liquefied natural gas (LNG) project to meet feedstock needs of the fertiliser sector.
  • The Indian petroleum ministry has favoured selling its 60% government equity in the joint sector oil company Lubrizol India to the state-owned Indian Oil Corporation (IOC).

Statistics:

  • Mitsubishi Oil Co.'s pre-tax loss for the year: 13 billion yen (US$110.6 million)
  • Education International's purchase price for 40% stake in Contact Energy: approximately $625 million (NZ$1.21 billion)
  • Recommended budget for the liquefied natural gas (LNG) project: Rs218.32 billion (US$5.1 billion)
  • Indian Oil Corporation's proposed purchase price for 10% stake in Lubrizol India: US$0.625 million
  • Total share acquisition by Edison International in Contact Energy: 40%

Sources:

  • Asia Pulse (http://www.asiapulse.com)
  • COMTEX (http://www.comtexnews.com)
  • TSE:5004 (Mitsubishi Oil Co. stock ticker)
  • Edison International press release (exact reference not available)
  • Indian petroleum ministry sources (exact reference not available)