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Review of Operations:
Oil Exploration and Production Business

Oil Exploration and Production Business
Petroleum Business
Petrochemical Business
Other Businesses
 Oil Exploration and Production Business image

FY2014 RESULTS

(Billions of yen)
  Results Year-on-Year Change
Net sales \82.3 Down \6.4
Operating income \41.0 Down \11.0
Ordinary income \47.5 Down \10.6

FY2015 PROJECTION (Announced in May 2015)

(Billions of yen)
  Projections Year-on-Year Change
Net sales \71.0 Down \11.3
Operating income \26.0 Down \15.0
Ordinary income \25.0 Down \22.5

FY2014 PERFORMANCE

In FY2014, total oil production by the three companies led by Cosmo Energy Exploration & Production Co., Ltd.?ADOC, Qatar Petroleum Development Co., Ltd. (QPD), and United Petroleum Development Co., Ltd. (UPD)?amounted to 38,031 barrels/day, up 3.1% compared with the previous fiscal year. This was largely attributable to the addition of one oil rig at ADOC.

Turning to the price of crude oil, Dubai crude oil began the year (January) at around US$104/barrel and later rose briefly to around US$111/barrel, primarily as a result of turmoil in the Middle East, including Libya and Iraq. However, the price subsequently fell precipitously to around US$60/barrel by the end of the year (December), owing to higher production of shale oil in the U.S. and OPEC deciding to maintain output levels.

Although production volume increased, due to the fall in crude oil prices and higher operating costs, the Oil Exploration and Production Business segment posted net sales of \82.3 billion, a \6.4 billion year-on-year decrease. Ordinary income declined \10.6 billion year on year to \47.5 billion.

OUTLOOK FOR FY2015

In FY2015, Cosmo Oil assumes an average crude oil price of US$55/barrel and an exchange rate of \120 per U.S. dollar. Oil exploration and production activities in the core Abu Dhabi and Qatar areas are expected to remain steady.

We project net sales of \71.0 billion, down \11.3 billion year on year, and ordinary income of \25.0 billion, down \22.5 billion. Despite expectations for higher production volume, we project lower crude oil prices than in FY2014. We accordingly anticipate a decline in profits compared with the previous fiscal year.


Review of Operations:
Oil Exploration and Production Business
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