AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
The shareholders' agreement between JBIC and Japanese JX Nippon Oil & Gas Exploration Corporation (JX NOEX), American JX Nippon Oil Exploration (U.S.A.) Limited (JX USA) - a subsidiary of JX NOEX, and JX Nippon Oil Exploration (EOR) Limited - a subsidiary of JX USA was signed on 26 November 2014. Under the agreement, JBIC will acquire preferred shares of JX Nippon Oil Exploration (EOR) Limited at a total value of USD 90.566 million.
JX Nippon Oil Exploration will acquire 50% equity stake in the U.S. company Petra Nova Parish Holdings who holds a 25% interest in the West Ranch oil field. The acquisition enables JX Nippon Oil Exploration to acquire disposal right of the produced crude oil. The shareholder's agreement will, in part, enable JX Nippon Oil Exploration to acquire such interests as well as the procurement of plant facilities. With the acquisition of equity stakes in the U.S. company, JX Nippon Oil Exploration will participate in the CO2-EOR (Enhanced Oil Recovery) project. Notably, JBIC signed a loan agreement with Petra Nova Parish Holdings in July 2014, see related state act.
In this context, the Bank stated: "As Japan's policy-based financial institution, JBIC will continue to support the development and interest acquisition of important resources by Japanese companies, by drawing on its various financial facilities and schemes, including equity participation, for structuring projects, and performing its risk-assuming function."
Equity participation financing
JBIC provides capital contributions named “equity participations” to foreign companies, overseas projects and (international) funds. Japanese companies must have equity interests in the foreign company; equity participation in the overseas project; or participate in the (international) fund and here play a significant role. More information can be found on the Bank’s website under equity participations.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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