TOKYO - ENEOS Holdings, Japan's largest oil refiner, is accelerating its push overseas as it seeks to raise the share of revenue generated outside Japan from roughly 20% today to 50% in the future, according to President Tomohide Miyata, who outlined the company's growth strategy in an extended interview that was not fully aired on TV Tokyo's World Business Satellite (WBS).
The company, which oversees the entire petroleum supply chain from crude oil procurement and refining to gasoline distribution, is pursuing expansion despite growing geopolitical risks in the Middle East. Alongside investments in refinery technology, ENEOS is also introducing AI-driven automation systems designed to improve operational efficiency.
Miyata began by discussing the tanker Endeavor, which had been affected by the recent tensions around the Strait of Hormuz. He said the vessel is scheduled to arrive at a storage terminal in Kagoshima next Monday if no further disruptions occur, before continuing to the Negishi Refinery in Yokohama. Part of the crude oil cargo will be unloaded in Kagoshima, with the remainder transported to Negishi for refining and eventual distribution, primarily to the Kanto region.
Asked about the crew members who had spent several months in the region during the crisis, Miyata acknowledged the stress they faced.
"Being in that situation is extremely stressful," he said. "Ensuring the safety of all crew members, regardless of nationality, was our top priority throughout the company."
Turning to the business itself, Miyata said fuel and chemical operations remain the dominant source of earnings for ENEOS. While fuel sales account for the majority of revenue, the fuel and chemicals segment typically generates between 50% and 70% of operating profit.
The company also maintains upstream oil and LNG development operations, which contribute roughly 10% to 20% of earnings. Other businesses include road paving operations using asphalt derived from crude oil refining, as well as its stake in JX Advanced Metals, which was listed last year and has benefited from strong demand related to the semiconductor sector.
Miyata said the company's long-term challenge is to reshape its business portfolio beyond traditional fuels.
"We need to think about where future growth will come from beyond fuel alone," he said, pointing to LNG development, specialty chemicals and functional materials as key areas for expansion.
A major part of that strategy is ENEOS's recently announced acquisition of Chevron's downstream assets in the Asia-Pacific region, a deal valued at more than 300 billion yen. While the acquisition further expands the company's fuel business, Miyata emphasized that it represents international growth rather than additional exposure to the domestic market.
"These are businesses entirely outside Japan," he said. "The acquisition expands our overseas fuel portfolio, and we are also looking at further growth opportunities in chemicals and specialty materials across Asia, Japan and North America."
Miyata indicated that proceeds and financial resources generated through the restructuring of the group's portfolio, including the listing of JX Advanced Metals, could be directed toward future investments in chemicals and gas development projects.
Despite the growth opportunities, he cautioned that successful integration of the Chevron assets will be critical. The company is currently in a transition phase, with the transaction expected to be completed in 2027.
"If we fail to execute the integration properly and realize the expected synergies, there is no point in making the acquisition," Miyata said. "This will be one of our biggest management priorities over the next several years."
Another major challenge is the adoption of artificial intelligence. Miyata said the rapid emergence of AI agents is forcing companies across industries to rethink productivity and operational efficiency.
"How we incorporate AI agents and use them to improve efficiency is becoming a major issue for us as well," he said.
The interview also touched on Japan's continuing dependence on Middle Eastern crude oil. Miyata noted that more than 90% of Japan's oil imports still originate from the region, a reliance that has increased following the loss of Russian crude supplies after the outbreak of the war in Ukraine.
To mitigate risks, ENEOS has been pursuing a strategy of increasing procurement from the United States and diversifying supply sources. However, Miyata acknowledged that reducing dependence on the Middle East remains a long-term challenge for both ENEOS and Japan's energy industry as a whole.
As geopolitical uncertainty continues and energy markets evolve, ENEOS is betting that international expansion, portfolio diversification, and technological innovation will provide the foundation for its next phase of growth.
Source: テレ東BIZ
