Fiscal 2008 Performance
The Energy Business Group aspires to make a valuable contribution as an enterprise to society through the provision of stable supplies of energy. These business activities rely on wide-ranging partnerships developed over many years with users in Japan and overseas, oil- and natural gas-producing nations and the oil majors.
High and rising prices for crude oil and natural gas along with mounting geopolitical risks have brought about major change within our operating environment. Boosted by high crude oil prices, this group posted consolidated net income of ¥94.2 billion in fiscal 2008. This new record for this group was ¥20.1 billion higher than the previous year's figure.
In fiscal 2008, we made four major investments related to oil and natural gas exploration and production (E&P): acquisition of working interests in the K2 Unit oil field in the U.S. Gulf of Mexico (approx. US$600 million); acquisition of oil and natural gas interests in the Kangean PSC block in Indonesia (approx. US$180 million); purchase of an equity stake in P.T. Medco Energi Internasional of Indonesia (approx. US$352 million); and acquisition of oil interests in the Dunlin oil field and surrounding oil fields in the U.K. North Sea.
Group Strategy and Fiscal 2009 Outlook
Following the start of the INNOVATION 2009 plan, we have adopted the business philosophy of "to create a rich energy society in everything we do - aiming to be a unique and sustainable energy business." This expresses our belief that we must never lose sight of the need to shape the energy society of tomorrow through our business activities today. To increase our enterprise value further, we must focus on securing energy resources and ensuring stable energy supplies while also taking the global environment into consideration.
Going forward, we will continue to focus on developing our LNG business and our E&P business. Higher prices for crude oil and natural gas mean that it has become steadily harder to acquire quality new equity interests. Under such conditions, our aim is to make steady progress with existing production projects while at the same time seeking to realize additional earnings streams as quickly as possible from LNG projects in various stages of development and planning, notably Sakhalin II and the Tangguh and Donggi-Senoro projects in Indonesia. Moreover, we will also try to expand opportunities to participate in new projects by seeking to add unique value through MC'svalue chain and in other ways. We aim to continue enhancing growth through our petroleum, carbon and LPG trading activities as well.
Although currency and other factors add uncertainty to our forecasts, we expect a further boost to earnings in fiscal 2009 from higher crude oil prices and increased dividend income. We project consolidated net income of ¥100.0 billion, a year-on-year rise of ¥5.8 billion.
Executive Vice President
Group CEO, Energy Business Group
