Japan's Japex to Cut Domestic Oil, gGas Exploration10 Feb 2009 • by Natalie Aster
Japan Petroleum Exploration Co (Japex) will cut its domestic oil and gas exploration investments in the business year starting in April amid slack oil prices, a company executive said on Tuesday. It may also make similar cuts in the following year, he said. Last May the company allocated 50 billion yen ($546.6 million) for domestic exploration in the five years to March 2013, with the aim of drilling around 20 test and exploratory wells. But it has been struggling to cope with the plunge in oil prices from a record $147 a barrel hit in July, which directly hit its oil and gas sales income. "Last year, we had forecast an oil price of $80 (a barrel). If we now assume an oil price of $50 or $60, the spending (on domestic exploration) in the next two business years is likely to be postponed," Hiroshi Sato, senior managing director, told reporters. "Spending on overseas exploration has been to a large extent decided already, so that's why we would squeeze domestic exploration." Sato said the size of the investment cuts has not yet been decided. Japex lowered its net profit outlook on Tuesday for the year to March by 41 percent to 11.6 billion yen, hurt by lower oil price and a stronger yen.