The completion of EXXON CORP.'s acquisition of longtime rival MOBIL CORP. will be followed in time by the consolidation of EXXON MOBIL CORP.'s eight affiliates in Japan. The resulting group will be a major player in Japan's struggling, low-profit oil industry. It will be second only to market leader NIPPON MITSUBISHI OIL CORP. in terms of sales and will have a combined refining capacity of 917,000 barrels per day. However, figuring out how to combine the eight operations to maximize efficiency will be a protracted process. ESSO SEKIYU K.K., a distributor wholly owned by the former Exxon, and GENERAL SEKIYU K.K., a refiner in which Exxon has a 50.1 percent stake, have been trying to do that for years (see Japan-U.S. Business Report No. 358, July 1999, p. 18) with mixed success. Now, six other companies will be involved in the planning, at least indirectly. The main players in addition to Esso Sekiyu and General Sekiyu are distributor MOBIL SEKIYU K.K., refiner TONEN CORP., owned 25 percent each by Exxon and Mobil, and KYOKUTO PETROLEUM INDUSTRIES, LTD., another refiner in which Mobil has a 50 percent stake. Rounding out the eight Exxon Mobil companies are a distributor and a refiner affiliated with Tonen, which itself has a daily refining capacity of 421,000 barrels, and a refiner majority-owned by General Sekiyu. The principals have established four business-specific committees to recommend strategies. Job losses are expected to result from the integration of overlapping functions, especially in the administrative and sales and marketing areas.
An exchange rate of ¥103=$1.00 was used in this report. aaaaa