Nippon Oil Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Nippon Oil Corp. (Shin Nihon Sekiyu Kabushiki-geisha in Japanese) is engaged in the refining and marketing of oil and gas. As a group of companies, it is also engaged in exploration, production, and importation of oil and gas; infrastructure construction; fuel cells; and other energy-related activities.

Nippon Oil operates primarily in Japan. The company was incorporated in 1888 and now employs around 13,000 people (as of January 1, 2008). Its headquarters is located in Tokyo. Although its domestic facilities—such as oil refineries, oil stocks, and plants—are scattered throughout Japan, the company’s principal subsidiaries maintain overseas facilities, such as in Liberia and Canada.

Japan is the company’s largest geographic market (95.7 percent of its total revenue in 2007). Other geographical areas of operation are Asia and Oceania (3 percent of total revenue in 2007), North America (0.8 percent of total revenue in 2007), and Europe (0.5 percent of total revenue in 2007).

The company generates revenue from four of its business divisions. These divisions include refining and marketing (89.9 percent of total revenue in 2007), construction (6.2 percent of total revenue in 2007), oil and natural gas exploration and production (3.1 percent of total revenue in 2007), and other (0.9 percent of total revenue in 2007).

One of the flagship businesses of Nippon Oil is the distribution of petroleum products. Principal products include fuel oils (such as automotive gasoline and aviation fuels), automobile lubricants (such as gasoline and diesel-engine oils), marine lubricants (such as cylinder oils for high-speed engines), industrial lubricants (such as turbine oils, compressor oils, and vacuum-pump oils), metalworking fluids (such as heat-treatment oils, rust-preventive oils, electric insulation oils, and asphalt), and petrochemicals (such as ethylene, propylene, benzene, and carbon fiber products). Nippon Oil markets its products with the brand name ENEOS.

Also, especially throughout its subsidiaries, the company stores and transports petroleum products; manufactures and sells liquefied gas and petrochemical products; explores and develops crude oil and natural gas; manufactures, sells, and purchases crude oil and petrochemical products overseas; and designs, constructs, and engineers oil-related facilities. Major subsidiaries of Nippon Oil that conduct these operations include Japan Canada Oil Co., Nippon Oil Exploration USA, Nippon Oil Exploration and Production UK, Japan Vietnam Petroleum Co., Mitsubishi Oil Company Exploration UK, and Mizushima LNG Co.

History

Nippon Oil was formed in the late 1880s as Nippon Oil Ltd. and changed its name to Nippon Oil Co. in 1894. The company established strong exploration projects in 1960s and further developed these activities throughout the 1990s. In 1999 the company merged with Mitsubishi Oil Co. to become Japan’s largest oil importer and distributor. This merged company was initially called Nippon Mitsubishi Oil Corp. and was renamed Nippon Oil Corp. in 2002. Today, it continues its operations with the help of numerous overseas subsidiaries.

The key people of Nippon Oil include Fumiaki Watari (chairman) and Shinji Nishio (president). Its board of directors consists of Naokazu Tsuda, Makoto Satani, Toshikazu Kobayashi, Yukihiro Matsuyama, Masahito Nakamura, Shigeo Hirai, Kan Ueno, Seiichi Isshiki, Yasushi Kimura, Yasuo Kamino, Junichi Kohashi, Naoaki Tsuchiya, Makoto Kuramochi, Akira Kitamura, Hideo Tabuchi, Michio Ikeda, Hiroshi Ono, Teruo Omori, Hideaki Kobashi, Yukihiro Tabata, Jun Matsuzawa, and Hajime Okazaki.

Market Position

One of the reasons for Nippon Oil’s success may be its strong market position in the Japanese oil industry. As the largest refiner in Japan, Nippon Oil is responsible for 22.5 percent of total petroleum-products sales in Japan (as of 2007). Also, Nippon Oil has the largest service-station network in Japan, with more than 10,000 facilities, constituting more than one-fifth of the total stations in Japan. Another reason is Nippon Oil’s broad product portfolio, which gives it a steady cash inflow and increases its customer base. Finally, strong research and development capabilities help the company modernize and improve its products. The company spent more than $100 million in 2007 for research and development, supporting exploration, production, and refining activities.

Bibliography:

Nippon Oil, www.eneos.co.jp (cited March2009).

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