Japan National Oil Hit by Losses

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Japan National Oil Corp., a state-run oil producer that funds most of the country's oil and gas exploration projects, said losses rose 19 percent last year as it took a one-time charge to close some unprofitable companies. Parent accumulated losses rose to 422 billion yen ($3.5 billion) in the year ended March, up from 352 billion yen a year earlier. The company took a special charge of 87.7 billion yen. Consolidated accumulated losses totaled 442 billion yen. JNOC has run up 2.31 trillion yen ($19 billion) of group debt since being set up in 1967 to establish secure energy supplies for Japan. The company is high on the list of state-run businesses Prime Minister Junichiro Koizumi wants to break up to cut public debt. The government may dismantle JNOC and fold parts of the business into an oil production company and sell shares to the public, said Japan's administrative reform office. "We will follow the government's decision,'' said JNOC Vice President Katsuhiko Tokita. To reduce accumulated losses, the company will sell more stakes it owns in profitable companies, he added. JNOC spent 2.10 trillion yen to set up 298 oil and gas exploration companies since it started business. It has since shut down 194. Of the remaining companies under JNOC's wing, only four are making a profit, said the administrative reform office. The company stores 50 million kiloliters of oil and imported 13 percent of the country's 4.4 million barrels of daily oil demand in 2000.

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