The 34 companies include Mitsui Oil Exploration Co., which is now engaged in natural gas development in Thailand and oil exploration in Australia.

JNOC will be abolished as part of the government's reform of special public corporations and is expected to hold auctions in October to sell its shares in the 34 companies to other shareholders in the firms.

Proceeds from the planned sale are anticipated to range from 50 billion to 100 billion yen.

The Kyodo News said that for the auctions JNOC will create a third-party body of experts that will set minimum bidding prices and some of the shares may be sold through direct negotiations with companies that will be given priority purchase rights by JNOC.

JNOC used to provide more than 2 trillion yen to 300 companies. Of these, about 65 firms continued to exist as of the end of March 2002, while the others were shut down due to their money-losing operations.

Of the existing companies, Japan Oil Development Co., Inpex Corp. and Sakhalin Oil and Gas Development Co. are due to be merged in line with the government's plan to create an international oil major in Japan.