Integrating with TonenGeneral Sekiyu and forming JXTG Holdings (2015)

The author’s view

This integration was a defensive restructuring meant to secure scale in a shrinking market, and yet it produced a structure in which a single company carried more than half of Japan’s oil supply. The concern about oligopoly that Nakahara Nobuyuki raised and the logic of rationalization and stable supply that management advanced were pointing at two faces of the same fact — a 50% share. Judgement on the integration is therefore of a kind that turns on one question: whether the side that gained pricing power directs it toward preparing for a decline in demand, or toward securing profit for its own sake.

Sugimori Tsutomu’s phrase, a “heterogeneous integration”, caught at once the difficulty and the possibility of a restructuring that had to hold two different origins together. That the domestic line descending from Nippon Oil, founded in 1888, and the foreign-capital line connected to Standard Oil came to rest inside one holding company marks the point at which the principal lineages of the refiners, dispersed since before the war, were very nearly all gathered in. How far that integration leads not to mere survival but to a transformation into an energy company fit for the age of decarbonization remains to be seen.