Trader Sumitomo Pursues U.S. Shale Service Business After Exiting Production

Japanese trading firm Sumitomo is looking to expand its services and related business in the U.S. shale patch, three years after exiting shale production operations. Sumitomo president Shingo Ueno revealed this in an interview with Bloomberg. In early 2021, Sumitomo sold its production assets in the U.S. shale patch, including divesting its oil-producing operations in the Eagle Ford and selling its Marcellus Shale Gas development project in Pennsylvania.

Despite the sale of its production assets, Sumitomo aims to play a more significant role in U.S. shale without directly returning to production. The company plans to increase sales of pipelines used in U.S. shale fields, leveraging its strengths in related businesses. Ueno emphasized that shale is essential for the U.S. and Sumitomo plans to capitalize on this resource. This strategic shift contrasts with other Japanese firms acquiring U.S. shale assets amid consolidation in the American oil and gas industry.

In another example, Tokyo Gas expanded its upstream business in the U.S. through its subsidiary TG Natural Resources LLC (TGNR). The Tokyo Gas Group’s plan through 2025 includes expanding its shale gas business in Texas and Louisiana. Recently, Mitsui & Co. completed the acquisition of an unconventional gas asset named Tatonka in Texas from U.S. oil and gas companies. This asset provides access to the Gulf Coast industrial area, including LNG export terminals and ammonia plants.

Overall, Japanese trading firms like Sumitomo, Tokyo Gas, and Mitsui & Co. are strategically positioning themselves to grow and capitalize on opportunities in the U.S. shale industry.