May 13, 2019 / 11:24 AM / 2 months ago

UPDATE 1-JXTG says gets supplies from Saudi, others to replace Iranian oil

* Sees no major impact from U.S. sanctions on Iranian oil

* President says no truth to report on sale of Caserones mine

* Assumes domestic oil demand to halve by 2040-president (Adds the company’s long-term vision in paragraphs 9, 10)

By Yuka Obayashi

TOKYO, May 13 (Reuters) - JXTG Holdings, Japan’s biggest oil refinery operator, has secured crude oil supplies from other countries such as Saudi Arabia to replace Iranian oil shipments that have been crimped by U.S. sanctions, its president said on Monday.

“We are not importing Iranian oil from May but there is no major impact,” JXTG Holdings President Tsutomu Sugimori, told an earnings news conference, when asked about the impact of tighter U.S. sanctions on Iranian oil.

“We have already secured supplies to replace Iranian oil from countries such as Saudi Arabia,” he said.

Still, Japanese refiners will work with the Japanese government to find a way to import oil from Iran again, as having diversified sources is an important issue for resource-poor Japan, he said, without elaborating on how that would work.

Iranian oil accounted for about 4% to 5% of Japan’s total oil supplies before the U.S. sanctions kicked in, he said.

Japanese refiners are taking more oil from other Middle East suppliers after the United States ended all waivers from sanctions on Iran starting from this month.

The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and six world powers last year, although it allowed Tehran’s biggest buyers to continuing buying some crude oil via waivers for another six months.

The sanctions have more than halved Iranian oil exports to 1 million barrels per day (bpd) or less, but Washington said in April all sanctions waivers for those importing Iranian oil would end at the beginning of May.

LONG-TERM VISION

The oil and metals group also said it aimed to reinforce growth areas such as chemical products, power generation and electronic materials under a long-term vision through 2040.

“The vision is based on an assumption that (domestic) oil demand will halve by 2040,” Sugimori said.

In April, the Wall Street Journal reported that JXTG was exploring the sale of its majority-owned Caserones copper mine, which could gain the company about $1 billion.

“There is no truth to the report,” Sugimori said. But he would not exclude the possibility of such a sale in the future.

“If the environment changes, anything is possible,” he said.

The Caserones project is 51.5% owned by JX Nippon Mining & Metals, a mining and smelting unit of JXTG, 25.87% by Mitsui Mining and Smelting Co Ltd and 22.63% by Mitsui & Co .

JXTG said that Caserones turned to operating profit in the year to March 31, booking 5.5 billion yen ($50 million) against 13.3 billion yen operating loss from the previous year.

Copper concentrate output at Caserones rose to 107,000 tonnes for the year through March 2019, up from 91,000 tonnes a year earlier.

$1 = 109.7200 yen Reporting by Yuka Obayashi; Editing by Tom Hogue and Emelia Sithole-Matarise

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