Japan’s Idemitsu Kosan earns $8.3 mln quarterly income from oil activities in Vietnam

Japan’s Idemitsu Kosan earned an income of JPY1.2 billion ($8.27 million) from oil activities in Vietnam in the first quarter of fiscal year 2024 (April-June 2024).

The figure is a significant improvement over the negative JPY10.3 billion ($71.25 million) in the whole fiscal year 2023, according to a review report by the Japanese firm. The figure is on an “excluding inventory impact” basis, the firm added.

The Japanese firm also attributed the improved performance to the Japanese yen’s depreciation, despite reduced production volumes in Vietnam and Norway, another country where it is engaged in oil exploration and production.

Idemitsu Kosan produced 15.5 kilo barrels of oil equivalent per day (KBOED) in Vietnam in Q1 of fiscal year 2024, down 2.6% year-on-year.

The firm said it would continue constructive discussions with sponsors with an aim to achieve positive net profits in fiscal year 2025.

A significant part of Idemitsu Kosan's business portfolio in Vietnam is the Nghi Son refinery and petrochemical complex in Thanh Hoa province, where it holds a 35.1% stake.

The Nghi Son complex recorded better operating profits in the period thanks to high utilization at over 100% but it also made net losses because of high financial expenses.

It is a $9 billion complex jointly owned by state-run Petrovietnam, Kuwait Petroleum Europe B.V. (KPE), Mitsui Chemical and Idemitsu Kosan Co. with respective stakes of 25.1%, 35.1%, 4.7%, and 35.1%.

Previewing future operations, the company said exploration and development of gas in Vietnam and other parts of Southeast Asia would “shift to production of natural gas,” which will become an important energy source in a decarbonizing society. It noted that it owned 43.08% of rights in Vietnam’s Sao Vang and Dai Nguyet gas fields.

Globally, Idemitsu Kosan earned a net income of JPY95.02 billion ($654.8 million) on net sales of JPY2,260.3 billion ($15.64 billion) in Q1 of fiscal year 2024, up 109.3% and 24.3% year-on-year, respectively.