Exxon Mobil to cut Japan business

Exxon Mobil Corp will reduce its stake in TonenGeneral Sekiyu K.K., its subsidiary and a major oil refiner, from 50.5 percent to about 22 percent on a voting rights basis, TonenGeneral has announced.

Sunday's announcement means Exxon Mobil will drastically reduce its Japan-based business by scaling down locally based oil refining and sales operations. TonenGeneral will virtually buy back its shares from Exxon Mobil.

Headquartered in Texas, Exxon Mobil is one of the six largest oil companies in the world. As Exxon's core business centers around oil and natural gas development, the firm is active worldwide in development, production, refining and sales activities.

According to the announcement, TonenGeneral will acquire in June a 99 percent stake in Exxon Mobil's Japanese arm, which currently holds 50.5 percent of TonenGeneral shares, for 302 billion yen. Then Exxon Mobil will newly acquire about 22 percent of TonenGeneral shares, effectively reducing its overall stake in the Japanese firm.

TonenGeneral will continue its partnerships with three domestic gas station brands--Esso, General and Mobil--and will procure crude oil from Exxon Mobil.

The reasoning behind Exxon Mobil's decision is that the company has determined it has no prospect of improving its Japanese oil refining and sales businesses due to a dwindling domestic market.