June 3, 2014 2:49 am JST

Overseas projects to buoy Japan oil companies in fiscal 2014

TOKYO -- Interests in foreign projects will start contributing to earnings at Japanese oil companies in the year ending March 2015.

     JX Holdings Inc. is expected get a 25 billion yen ($242 million) or so boost to pretax profit as full-fledged operations begin at a Papua New Guinea natural gas project and the Caserones copper project in Chile. The company has stakes in both.

     While group pretax profit will likely drop 31% on the year to 210 billion yen amid a sluggish earnings recovery in the mainstay petroleum products business, newly obtained interests in projects will come to provide more than 10% of overall profit.

     With support from the Garraf oil field in Iraq, Japan Petroleum Exploration Co. expects a 34% jump in operating profit to 33 billion yen.

     With international prices of crude oil and natural gas remaining high, participation in projects abroad is becoming a stable source of income for Japanese oil companies.

     Idemitsu Kosan Co. has an interest in a Norwegian oil exploration project in the North Sea that will begin production this fiscal year.

     Major Japanese oil companies are stepping up investment abroad to offset shrinking demand in their petroleum businesses at home.