Inpex Japan raises its annual profit forecast due to lower costs

Inpex, Japan's largest oil and gas exploration company, raised its net profit forecast by 5% for the year on Thursday. Lower-than-expected expenses offset a reduced shipment of its Ichthys project in Australia because of maintenance.

The company expects a net profit of $3.65 billion in 2025. This is up from the August forecast of $3.65 billion. It also exceeds analysts' estimates of 370.9 billion yen, according to an LSEG survey.

The net profit from January to the end of September increased by 1.4% over the previous year, reaching a new record of 293.4 billion yen.

Daisuke Yamada said at a press briefing that, although the shutdown maintenance of Ichthys was slightly longer than anticipated, it weighed on profits. However, certain expenses were not recorded fully, which resulted in a stronger outlook.

RAISES THE UPPER LIMIT FOR SHARE BUYBACK PLANS TO 60 MILLION

Inpex, with its improved outlook, increased the maximum limit of its share-buyback plan from 50 million shares announced in August to 60 million and extended the period of the buyback to the end January from the December.

Yamada stated that Inpex expected to ship 116 LNG cargoes from Ichthys in this year. However, they will not meet their expectations. Train 1 restarted production in late September, while Train 2 resumed early November following maintenance that began in August.

The company stated that Train 1 has already reached full capacity, and Train 2 is expected to reach full operation in the next week.

Inpex is a shareholder in the Sakhalin-1 oil development project, which was launched by Russia. The consortium, comprising the Japanese Industry Ministry, Itochu Marubeni and Japan Petroleum Exploration, includes Inpex.

Consult Partners on Responses to U.S. Sanctions

Yamada stated that Inpex will consult with its partners about the U.S. Sanctions on Rosneft. Rosneft is a major shareholder in this project.

Last month, Washington sanctioned Rosneft (Russian oil company) and Lukoil in order to get the Kremlin's attention to the end of the Ukraine war.

Inpex will book a loss between 5 and 10 billion yen due to U.S. sanction on Lukoil, which owns 80% of Block 10 in Iraq, while Inpex holds the remaining 20%.

Yamada stated that "we have no plans to pull out of the project development and we will continue discussions with Lukoil about future measures."

Inpex has begun early design work for its Abadi LNG Project in Indonesia's Masela Block.

Yamada said that the front-end engineering (FEED), which is expected to cost around $1 billion, was on track. A final investment decision will be made in 2027. ($1=150.7800yen) Reporting by Yuka Obayashi, Editing by Clarence Fernandez

(source: Reuters)