Japanese energy company Inpex Corp. expects its final investment decision (FID) on the Abadi LNG project in Indonesia to be delayed because COVID-19 has disrupted survey work and adjustments may be needed due to climate change, a senior executive said Aug. 10.
Japan's biggest oil and gas explorer said in July 2019 that it planned to start front-end engineering design (FEED) on the $20 billion project, also known as the Masela gas project, in 2020, with LNG production at the giant field due to start by 2027-2028. Inpex controls 65% of the project.
But preparatory work for the FEED has been suspended since last year due to the pandemic in Indonesia, Inpex's managing executive officer, Daisuke Yamada, said.
"There will be some delay in the FID though I can't say when," Yamada told media during an earnings briefing.
The company said in 2019 that it aimed to wrap-up its FID in three to four years.
"Also, given the growing global push toward decarbonization, we may need to consider redesigning the Abadi project with carbon capture and storage (CCS) or carbon capture utilization and storage (CCUS)," Yamada said.
Inpex, however, remains committed to developing the project, he said, as it wants to build another pillar in addition to its Ichthys LNG project in Australia.
The company raised its net profit forecast by 21% to 170 billion yen ($1.54 billion) for 2021, marking a V-shaped recovery from last year's 111.7 billion loss due to hefty impairment losses on its oil and gas assets.
"Higher than expected oil prices are behind the upgrade," Yamada said.
The company also lifted its annual dividend estimate to 40 yen a share from 33 yen.
For the January-June period, Inpex booked a 51.98 billion yen net profit, against a 120.80 billion yen loss a year earlier when the pandemic hammered oil prices.
Recommended Reading
US Drillers Cut Oil, Gas Rigs for Fourth Week in a Row-Baker Hughes
2024-04-12 - The oil and gas rig count, an early indicator of future output, fell by three to 617 in the week to April 12, the lowest since November.
US Gas Rig Count Falls to Lowest Since January 2022
2024-03-22 - The combined oil and gas rig count, an early indicator of future output, fell by five to 624 in the week to March 22.
US NatGas Output to Decline in 2024, While Demand Rises to Record High, EIA Says
2024-04-09 - The EIA projected dry gas production will ease in 2024 as several producers reduce drilling activities.
US Drillers Add Oil, Gas Rigs for First Time in Four Weeks: Baker Hughes
2024-05-17 - The oil and gas rig count rose by one to 604 in the week to May 17.
Barnett & Beyond: Marathon, Oxy, Peers Testing Deeper Permian Zones
2024-04-29 - Marathon Oil, Occidental, Continental Resources and others are reaching under the Permian’s popular benches for new drilling locations. Analysts think there are areas of the basin where the Permian’s deeper zones can compete for capital.