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| Announcement on integration of Showa Shell's international trading business with Shell Trading |
| 25/07/2007 |
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Showa Shell Sekiyu K.K. (hereinafter "Showa Shell") has decided to integrate its international trading business of oil products (i.e. gasoline, kerosene, jet fuel, diesel, and fuel oil) and chemical feedstocks (i.e. naphtha, condensate) with "Shell Trading", the global trading network of the Shell Group, at its board meeting today. |
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| 1. Purpose of this integration
Showa Shell established its international trading business in Japan working closely with Shell Trading. Today, it has decided to integrate the international trading business with Shell Trading through a form of business lease.
This integration enables Showa Shell to optimize its refining and marketing business.
Effectively, Showa Shell will have greater access to customers worldwide and expanded opportunities for its exporting business under the current growing demand resulting from market globalization.
2. Performance of Showa Shell Sekiyu's Trading Business
(Full year results of 2006, Non-Consolidated)
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Showa Shell Sekiyu's
Trading Business (a) |
Showa Shell Sekiyu (b) |
Ratio (a/b) |
| Sales Proceeds |
373,806 million JPY |
2,818,949 million JPY |
13% |
3. Business outline of Shell Trading
| Business | : |
international trading of crude oil, refined oil products, chemical feedstocks, natural gas, electrical power and environmental products etc. |
| Locations | : |
London, Houston, Singapore, Dubai, Rotterdam, Moscow, Barbados etc. |
Trading
Volume | : |
crude oil approx.7 million b/d; oil products approx.3.5 million b/d; gas & power approx.2.5 million |
4. Estimated start of the business lease
August 1, 2007
5. Forecast of the impact on financial performance
Sales proceeds of Showa Shell Sekiyu K.K. from fiscal year 2008 may decline by approximately ten percent due to this business lease, dependent on the business environment including oil product prices etc. However, the impact on Showa Shell's operating and ordinary incomes are expected to be limited since any decline in the current income from its international trading business will be offset by a business lease fee.
The forecast of its sales proceeds for the full year 2007 is under calculation taking current business environment into consideration. An announcement will be made as soon as the new forecasts are completed. |
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