Japan’s Inpex Corporation is reviewing its investment plans and looking into other cost-reducing measures due to the current market situation and the impact of the coronavirus and the oil price decline on its business operations.
In a notice concerning the impact of the oil price decline and the coronavirus pandemic, Inpex said on Wednesday that the prices of oil and natural gas are determined in large part by international market trends, which are influenced by numerous factors including international and regional supply and demand fluctuations as well as the condition of the global economy and financial markets.
Currently, oil prices are rapidly declining due to the expectation of a reduction in energy demand following a global economic downturn induced by the COVID-19 pandemic, and the breakdown of the OPEC+ production cut agreement.
While it remains a challenge at this stage to forecast how long these conditions will last, Inpex said its policy is to minimize the impact of oil prices maintaining their current level for a certain amount of time by optimizing operations, reviewing investment plans group-wide, and pursuing further cost-reduction measures, in order to sustain stable business operations.
The company said it would disclose the impact to the forecasted consolidated operating results for the year ending December 31, 2020, announced on February 12, 2020, in a timely manner once the impact was determined.
If Inpex decides to reduce its spending for 2020, it would be joining many oil and gas operators around the world, some of which have taken drastic measures to cut their spending for this year as well as the next.