Nippon Oil agreed to merge with Nippon Mining. The decision to merge comes amid a plunge in oil prices that has battered Japanese refiners' small exploration businesses and slashed the value of their inventories. Nippon Oil and Nippon Mining said they expected to sign a final merger agreement by next March. Details including the ratio of each company's stock in the new entity have yet to be decided. After a formal agreement, a joint holding company would be created next October and the companies' operations would be integrated by April 2010. Nippon Oil and Nippon Mining together distribute one-third of Japan's petrol and other oil products. As Japan's oil companies have as much as 30% more refining capacity than they need, the combined entity would cut its refining capacity by 400 000 bbl/d, or 20%, within two years. But the new company's larger scale would allow it to increase its investments in upstream oil and gas production.