Planned oil wholesale JV in Japan considering geothermal investment
In the face of a challenging market for petroleum products, the newly merged oil wholesale company of Idemitsu and Showa Shell is considering investing in geothermal and other renewable energy.
Two of the top oil wholesalers in Japan, Idemitsu Kosan and Showa Shell Sekiyu, announced their merger last Monday. This makes the company the second-largest oil wholesaler in Japan just behind JTXG Holdings. In the face of current market challenges, the new firm looks to build a portfolio that includes investments in renewable energy.
Idemitsu becomes the parent company of Showa Shell, although the new firm will retain both brand names at its gas stations for the time being. The merger has come at a time when a diminished interest in car ownership and a shift towards electric vehicles has led to a falling demand for gasoline.
To maintain their relevance in such a market, the new firm is planning to develop several new businesses. These plans include investments in renewable energy such as solar, wind, and geothermal power. The firm is also planning to establish oil refineries abroad and develop new chemical products.
Some observers have stated that the merger will reduce competition in the industry, making a decline in the prices of gasoline and other petroleum products less likely.
Source: NHK World – Japan