Japan’s Inpex takes Prelude hit while forecasting energy recovery

Tuesday, 16 February 2021
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LNG News Editor 

Inpex Corp. of Japan, operator of the Ichthys plant in Northern Australia and a shareholder in the offshore Prelude FLNG plant with Royal Dutch Shell, reported losses for 2020 and took hits on Prelude and Eagle Ford assets in the US, while forecasting a recovery in the Japanese and global oil and gas markets for the rest of 2021.

Inpex reported a net loss of 111.7 billion yen ($1.06 billion) for 2020 compared with a net profit of 167.3Bln yen ($1.60Bln) in the previous year.

Stakes

Inpex is a shareholder with France’s Total in the Ichthys plant near Darwin, supplying Japanese utilities with LNG cargoes as well as Taiwan.

The Ichthys plant came on stream in 2018 and produces almost 9 million tonnes per annum of LNG from two processing Trains.

It additionally owns a 17.5 percent interest in the Shell-operated Prelude FLNG facility, moored 475 kilometres offshore of Broome and which was hit by production problems for most of 2020.

Inpex said it took an impairment loss in its 2020 earnings on assets related to Prelude FLNG of 129Bln yen ($1.23Bln) for the year to the end of December.

The Japanese company also took a hit of 33.23 billion yen ($317M) on its tight oil project in the US Eagle Ford shale basin.

“The global economy experienced a slowdown in economic activity in countries around the world impacted by the spread of Covid-19, and business conditions rapidly deteriorated,” said the company.

“The Japanese economy also experienced a rapid contraction in corporate earnings and consumer spending as well as a deterioration in employment following the declaration of a state of emergency (for Covid) in April 2020,” it added.

“At present exports, production and consumption are showing signs of recovery thanks to a phased increase in socioeconomic activity,” stated Inpex.

While some uncertainty remains, Inpex is expecting a turnaround in its own financial performance during 2021 as the Japanese and global economies recover.

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