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Written by: Staff

TOKYO, May 16 (Reuters) INPEX Holdings Inc., Japan's biggest oil explorer, on Tuesday raised its full-year profit forecast by 7.8 percent on soaring oil prices, after its INPEX Corp. unit posted a 35 percent jump in 2005/06 profit.

Oil prices climbed nearly 40 percent in the last business year to an average $55.77 a barrel, the company said. Prices have continued to rise and have been mostly above $70 since April on fears of supply disruptions from major producers Iran and Nigeria.

INPEX Holdings, created last month through the merger of oil developers INPEX Corp. and Teikoku Oil Co., said it now expects a group net profit of 97 billion yen ($880 million) against its April forecast of 90 billion yen.

The revised outlook is still below a consensus of 120.6 billion yen from six analysts surveyed by Reuters Estimates.

INPEX, which produces oil and gas mainly in Indonesia and Australia, used an assumed crude oil price of $55 a barrel for 2006/07 for its forecast, up from a previous $50 a barrel.

An oil price rise of $1 per barrel from the projected levels would add 2.3 billion yen to its 2006/07 net profit, it said.

INPEX, which changed its projection of the dollar/yen rate to 110 yen from 115 yen, said a 1-yen rise in the dollar would increase its net profit this year by 1.35 billion yen.

INPEX has been keen to have interests in exploration firms and development projects globally, and it did not rule out the possibility of acquisitions in future.

''We would always consider it if there are good companies,'' Mutsuhisa Fujii, INPEX's executive senior vice president, told Reuters on the sidelines of a news conference. ''Those firms are highly valued at the moment.'' The company said INPEX Corp.'s group net profit came to 103.48 billion yen in the year ended in March, against 76.49 billion yen a year earlier. Sales rose 47 percent to 704.23 billion yen.

Teikoku reported a net profit of 6.5 billion yen in the three months ended in March on sales of 27.72 billion yen.

INPEX is responsible for more than 25 percent of all the liquefied natural gas exported from Indonesia to Japan, which is the world's biggest market for LNG, absorbing about half the global supply of the clean fuel each year.

LNG is gas that has been supercooled into liquid form for transport in a tanker.

The company's profile rose when it agreed to develop the southern part of the huge, untapped Azadegan oil field in Iran despite objections from the U.S. government.

It has said, however, that the project could be delayed by the slow removal of land mines, while tensions between Iran and the United States over Iran's nuclear development programme have added to uncertainty.

In Australia, INPEX plans to invest $5 billion to $6 billion to produce LNG from its Ichthys field, with production planned to begin from 2012.

The global LNG market has grown rapidly due to strong demand for electricity produced by clean fuel and is expected to double by 2015, according to research and consulting firm RNCOS.

INPEX's shares have slipped 8 percent since its creation on April 3, compared with a 3 percent fall for the oil and coal sector.

Before the announcement, the stock closed down 3.9 percent at 1 million yen, while the subindex ended down 3.7 percent.

($1=110.30 Yen) REUTERS PV KN1429

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