By Katya Golubkova and Yuka Obayashi
(Reuters) – Japan’s Inpex on Thursday forecast a 38% fall in net income this year to 270 billion yen ($2 billion) due to lower oil prices and a stronger yen, after soaring energy prices carried it to a record 2022.
A rapid recovery in demand after the end of pandemic lockdowns and a surge in crude oil and natural gas prices, driven by Russia’s invasion of Ukraine boosted profits for energy companies worldwide last year.
Japan’s top oil and gas exploration and production company posted a 97% jump in full-year net profit to a record 438.2 billion yen.
“Our sales rose, (oil and gas) unit prices climbed and the yen fell, which all contributed to a sharp gain in profit,” Daisuke Yamada, Inpex’ managing executive officer, told a news conference.
But the company sees the average Brent oil price falling to $75 per barrel in 2023 from $99 last year, and the yen rising to 125 per U.S. dollar from 131.6.
Inpex expects sales to fall 19% to 1.9 trillion yen this year, reversing some of 2022’s 87% increase, though its key Ichthys liquefied natural gas project in Australia is expected to increase production to 9.2 million tonnes from 7.8 million tonnes last year when maintenance reduced output.
“We want to offset the impact from lower energy prices with higher production at Ichthys,” Yamada said.
The 2023 forecast also includes a 35 billion yen expenditure for the project to respond to Australia’s “safeguard mechanism” reform.
Australia’s Labor government proposed in January to make the country’s biggest polluters slash emissions by 30% over the next seven years.
“We may need to buy carbon credits if we fall short of the requirement of cutting emissions, so we are booking these costs,” Yamada said, adding that the project’s closure cost, including restoration, is also included.
Inpex plans to increase its full-year dividend to 64 yen per common share this year from 62 yen last year.
($1 = 131.2300 yen)
(Reporting by Katya Golubkova and Yuka Obayashi; Editing by Janane Venkatraman, Kirsten Donovan)
