By Yuka Obayashi TOKYO (Reuters) -Japan's biggest oil and gas explorer Inpex raised its forecast for annual net profit by 5% on Thursday, as lower-than-expected costs offset reduced shipment from its
Japan's Inpex lifts annual profit forecast on lower costs
Inpex's Financial Performance and Future Outlook
By Yuka Obayashi
Profit Forecast Increase
TOKYO (Reuters) -Japan's biggest oil and gas explorer Inpex raised its forecast for annual net profit by 5% on Thursday, as lower-than-expected costs offset reduced shipment from its key Ichthys liquefied natural gas project in Australia due to maintenance.
Impact of U.S. Sanctions
The company now expects net profit of 390 billion yen ($2.6 billion) for 2025, up from its August projection of 370 billion and above analysts' estimate of 370.9 billion yen in an LSEG poll.
Share Buyback Plan
Net profit for the period from January to September rose 1.4% on the year to a record 293.4 billion yen.
LNG Production Updates
"Although the shutdown maintenance at Ichthys took slightly longer than expected, weighing on profits, some expenses were not fully recorded, resulting in stronger outlook," Daisuke Yamada, senior managing executive officer, told a press conference.
RAISES UPPER LIMIT OF SHARE BUYBACK PLAN TO 60 MILLION
With the improved outlook, Inpex raised the upper limit of its share buyback plan to 60 million shares from 50 million announced in August, and extended the buyback period to the end of January from the end of December.
Inpex had expected 116 LNG cargoes to be shipped from Ichthys this year, but will fall short of that, Yamada said. Train 1 resumed production at end-September, and Train 2 restarted in early November after maintenance begun in August.
Train 1 is already running at full capacity and Train 2 will reach full operation this week, the company said.
Inpex owns a stake in Russia's Sakhalin-1 oil project through the Sakhalin Oil and Gas Development (SODECO) consortium which includes the Japanese industry ministry, Itochu, Marubeni and Japan Petroleum Exploration.
TO CONSULT PARTNERS ON RESPONSES TO U.S. SANCTIONS
Yamada said Inpex would consult with its partners regarding responses to U.S. sanctions on Rosneft, a key shareholder in the project.
Last month, Washington sanctioned Rosneft and Lukoil to force the Kremlin to end the war in Ukraine.
Inpex plans to book an impairment loss of 5 billion to 10 billion yen on Iraq's Block 10 oil exploration area, 80% owned by Lukoil and 20% by Inpex, due to U.S. sanctions on the Russian company.
"We have no plans to withdraw from the development project and will continue discussion with Lukoil on future measures," Yamada said.
Inpex is doing early-stage design work on its Abadi LNG project in Indonesia's Masela block.
The front-end engineering design (FEED) process, expected to cost about $1 billion, is on track, with a final investment decision targeted for 2027, Yamada added.
($1=150.7800 yen)
(Reporting by Yuka Obayashi; Editing by Clarence Fernandez)
