Japan's Inpex books 19% drop in 2023 profit on lower energy prices
TOKYO, Feb 13 (Reuters) - Japan's biggest oil and gas explorer Inpex Corp 1605.T on Tuesday reported a 19.4% drop in 2023 net profit due to lower prices of oil and natural gas and a hefty impairment loss on its Prelude liquefied natural gas (LNG) project in Australia.
Inpex posted a profit of 371.5 billion yen ($2.5 billion) in 2023, compared with 461.1 billion yen a year earlier, hit by the 75.6 billion yen loss booked in the third quarter on Prelude due to higher costs to meet the tightened environmental regulations.
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The energy company, which changed its accounting method to International Financial Reporting Standards (IFRS) from the Japanese standards, anticipated an annual profit of 330 billion yen for 2024.
The prediction is based on an assumption of Brent oil prices at $73 a barrel and a currency exchange rate of 138 yen per U.S. dollar, and would mark a flat earnings performance when converted into the IFRS, Daisuke Yamada, Inpex' managing executive officer, said.
In 2024, Inpex is set to boost investment for growth areas to 553 billion yen from 333.6 billion yen last year, largely on the development of oil and gas projects, including carbon capture storage (CCS) initiatives.
Given the enhanced financial position, "we are steering a bit more toward larger investments in growth areas," Yamada told a press conference.
U.S. President Joe Biden last month paused approvals for applications to export from new LNG projects to review the climate change and economic impact of such projects.
Inpex signed a long-term contract in 2022 to buy the super-chilled fuel from Venture Global LNG's Calcasieu Pass 2 (CP2) plant, one of the projects affected by the pause.
"We'd like to receive the supply promptly from Venture Global based on our long-term contract. If this plan stops, we will have to think of something new, so we will keep a close eye on this matter," Yamada said, while adding that Inpex has not begun seeking new sources to replace CP2 supply.
Yamada also said Inpex has not directly lobbied the U.S. government, but Japan's Ministry of Economy, Trade and Industry has been calling on U.S. authorities to improve the situation.
($1 = 149.4700 yen)
(Reporting by Yuka Obayashi; Editing by Kim Coghill)