Annual Report 2017 Year Ended March 31, 2017 INPEX CORPORATION Annual Report 2017 Report Annual About INPEX Annual Report 2017 Contents
Total Page：16
File Type：pdf, Size：1020Kb
Akasaka Biz Tower 5-3-1 Akasaka, Minato-ku INPEX CORPORATION Tokyo 107-6332, Japan Phone: +81-3-5572-0200 Annual Report 2017 Year ended March 31, 2017 www.inpex.co.jp/english INPEX CORPORATION CORPORATION INPEX Annual Report 2017 About INPEX Annual Report 2017 Contents INPEX is the largest oil and 1 Message from the President .................. 01 gas E&P comp any in Japan. 2 Financial & Operating Highlights ......... 06 The Company currently is 3 Market Trend & Management Policy Business Model and Strengths 08 engaged in approximately The Structure and Mechanism of Oil and Natural Gas Exploration 70 projects spread across and Development .............................. 10 The Medium- to Long-Term Vision of more than 20 countries INPEX and Investment Plans ........... 12 worldwide. 4 Project Overview As a company that is engaged in oil and natural gas explo- Segment Overview ................................... 14 ration, development and production activities worldwide, Project Overview by Region INPEX boasts the highest reserve and production volumes Asia & Oceania .................................. 16 Eurasia 22 among companies in Japan. The Company is positioned ................................................. Middle East & Africa.......................... 24 as a mid-tier E&P player just behind the world’s oil majors. Americas ............................................. 26 The Ichthys LNG Project in Australia being one of its key Japan ................................................... 28 initiatives, INPEX is actively engaged in oil and natural gas projects in Japan and overseas. In addition to securing 5 Sustainability & Governance a stable and efficient supply of energy, the Company is Sustainability ............................................. 30 working diligently to ensure sustainable growth in its cor- Corporate Governance ........................... 34 porate value. 6 Financial & Corporate Information 11-Year Financial Information ................. 42 Our Mission Background Information: Oil and Gas Accounting The mission of the INPEX Group is to Policies and Treatment...................... 44 Management’s Discussion and provide a stable and efficient supply Analysis of Financial Condition of energy to customers by exploring and Results of Operations ............... 46 Consolidated Financial Statements/ and developing oil and natural gas Notes to Consolidated resources both domestically and Financial Statements ......................... 52 throughout the world. Through our Independent Auditor’s Report ............... 71 business, we aim to become an Subsidiaries and Affiliates ....................... 72 Business Risks ............................................ 74 integrated energy company, which Oil and Gas Reserves contributes to our community and and Production Volume ................... 82 makes it more livable and prosperous. Corporate Informat ion ............................. 85 DISCLAIMER Information contained in this Annual Report is not an offer or a solicitation of an offer to buy or sell securities. You are requested to make investment decisions using your own judg- ment. Although the Company has made sufficient effort to ensure the accuracy of information provided herein, the Company assumes no responsibility for any damages or liabilities including, but not limited to, those due to incorrect information or any other reason. FORWARD-LOOKING STATEMENTS This Annual Report includes forward-looking information that reects the Company’s plans and expectations. Such forward-looking information is based on the current assumptions and beliefs of the Company in light of the information currently available to it, and involves known and unknown risks, uncertainties and oth er factors. Such risks, uncertainties and other factors may cause the Company’s actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or finan- cial position expressed or implied by such forward-looking information. Such risks and uncertainties include, without limitations, uctuations in the following: the price of and demand for crude oil and natural gas; exchange rates; and the costs associated with exploration, development, production and other related expenses. The Company undertakes no obligation to publicly update or revise any information in this Annual Report (including forward-looking information). NOTES REGARDING FIGURES Financial figures in this Annual Report have been basically rounded to the nearest unit (e.g., millions, billions) for convenience. The “Project Overview by Region” section (starting on p. 16) basically describes the operating situation as of June 30, 2017. Figures in parentheses denote negative amounts. Natural gas production volume for projects in production is not the vol- ume at wellheads, but corresponds to sales to buyers. INPEX CORPORATION is listed on the First Section of the Tokyo Stock Exchange under the securities code 1605. The Company is also included in the Nikkei Stock Average (Nikkei 225) and the JPX-Nikkei Index 400 (JPX400). 1 from the President from Message Toshiaki Kitamura President & CEO Looking Back at the Past Year For the fiscal year ended March 31, 2017, net to 521 thousand barrels of oil equivalent per sales decreased 13.4% year on year to ¥874.4 day (BOED), and we are continuing to main- billion, while net income attributable to own- tain a level of more than 500 thousand BOED. ers of parent showed a significant increase of Proved reserves (the total of crude oil and 175.2% to ¥46.2 billion. Looking at trends in natural gas, crude oil conversion), which rep- oil prices, although the price fell under to the resent a source of future earnings, also rose US$42 level a barrel in August 2016, the Decem- slightly compared with the previous fiscal year- ber 2016 Declaration of Cooperation accord end to about 3.3 billion barrels of oil equiva- between OPEC and non-OPEC oil-producing lent (BOE). Summarizing the progress of the countries triggered a price rise and ended the major projects now under way, we are continu- fiscal year at around the US$50 a barrel level. ing to make progress with the development Despite the decrease in net sales, brought work on offshore and onshore facilities on the about by falls in crude oil and natural gas prices Ichthys LNG Project, and the project will, dur- as well as by a decline in revenues due to the ing the current fiscal year (ending March 31, yen’s appreciation in comparison with the previ- 2018), begin production of condensate, lique- ous fiscal year, operating income increased due fied natural gas (LNG) and liquefied petroleum to a variety of factors, such as a decrease in the gas (LPG) in sequence and then ship these amount of temporary loss recorded. products. In the Abadi LNG Project in Indone- Net production volume (the total of crude sia, we began preparatory work related to the oil and natural gas, crude oil conversion), start of the conceptual design (pre-front-end which is a key pillar supporting the Com- engineering and design [pre-FEED]) for the pany’s earnings, increased by 70,000 barrels optimum development of the Abadi gas field a day compared with the previous fiscal year centered on an onshore LNG plant. INPEX CORPORATION Annual Report 2017 01 Cost Reduction Initiatives As an oil and natural gas development com- ing a number of initiatives to continue making pany, we are responsible for fulfilling our social investments for future growth and maintain mission through our business activities, regard- stable dividends. less of current supply and demand uctua- Whereas operating cash ows for the tions. Crude oil prices, which had remained at period under review showed a substantial more than US$100 per barrel until the middle increase of more than ¥270.0 billion compared of 2014, dropped to under US$30 per barrel at with the previous fiscal year, total investment the beginning of 2016, a mere year and a half decreased by just under 40% year on year. Pro- later. In response to this change in the price for duction costs per barrel (crude oil equivalent) crude oil, the Company is continuing to handle were further reduced from US$7.80 in the pre- the issue with a sense of urgency and, keeping vious fiscal year to US$6.10. We believe that in mind the possibility that crude oil prices will these efforts to reduce costs played a support- remain at a low level for some time to come, ing role leading to recovery and the posting has drawn up countermeasures and is advanc- of a net profit for the fiscal year under review. Shifts in Investment-Reduction Measures Production Cost per BOE*** Development* Exploration Other capital expenditures** (US$/BOE) (¥ billion) 971.2 7.8 6.1 605.2 615.0 880.0 578.5 606.0 39.3 16.1 8.0 51.8 10.5 1.0 2016/3 (Actual) 2017/3 (Actual) 2018/3 (Forecast) 2016/3 (Actual) 2017/3 (Actual) *Includes investments in Ichthys downstream business ***Excluding royalties **Mainly investments in Naoetsu LNG Terminal and domestic pipeline network Net Proved Reserves and Net Production Reserve Replacement Ratio (3-year average) (Thousand BOED) Proved reserves (Billion BOE) Reserve Replacement Ratio (3-year average) (%) 514 521 Americas 4% 5% 2.53 2.43 3.26 3.30 370% Middle East/ 321% Africa 48% 52% 246% Eurasia 6% 6% 100% Asia/Oceania 36% 31% Japan 5% 5% 2014/3 2015/3 2016/3 2017/3 2016/3 2017/3 02 INPEX CORPORATION Annual Report 2017 1 from the President from Message Aiming to Achieve Our Growth Targets We have set three growth targets for sustain- tion wells in February