Japex's Strategic Investment Plan (2026-2035)

Japan Petroleum Exploration (Japex) has announced a 1.5 trillion yen ($9.4 billion) investment plan over the next decade to significantly expand its exploration and production (E&P) portfolio. The company aims to drive overseas E&P primarily through operator business, targeting production growth from 45,000 barrels of oil equivalent per day (boepd) in 2025 to 100,000 boepd by fiscal year 2031, and further to 180,000 boepd by 2035. This strategy is underpinned by an anticipated upward trend in global oil and gas demand, fueled by economic growth in emerging economies and rising electricity demand from artificial intelligence (AI).

Asset Allocation and Strategic Regions

Of the total investment, 1.16 trillion yen is allocated to E&P over the ten-year period. Upstream assets are now expected to constitute 60% of Japex's total assets by March 2036, a revision from the previous 2022 plan that targeted a 50:50 split between E&P and non-E&P assets by 2030. Japex acknowledges that its asset build-up is behind schedule, as acquiring target assets has taken longer than initially anticipated. The company has identified four strategic geographical areas: Norway, Japan, Southeast Asia, and the US.

Near-Term and Long-Term E&P Activities

In the near term (until 2031), Japex plans to solidify its foundation through asset acquisitions for production, development, and exploration in Norway. This includes a recent agreement to acquire a 20% interest in the Equinor-operated Block PL 1119 in the Norwegian Sea, which contains the Mistral South gas condensate discovery and the Mistral North exploration prospect. From 2031 to 2035, the company will focus on exploration and development of large-scale offshore gas fields in Southeast Asia, while expanding investments in Norway and the US. Japex noted that prevailing oil and gas prices and its recent investment in tight oil assets in the Denver-Julesburg basin (US) have helped meet profit targets, and it plans to use this acquisition as a starting point to increase investments.

Carbon Storage and CCUS Portfolio

Japex is also advancing its carbon capture, utilization, and storage (CCUS) portfolio. It aims to achieve 1.5 to 2 million tonnes per annum of CO2 storage capacity by 2031 and surpass a cumulative total of 8 million tonnes by 2035. The company has already injected 300,000 tonnes of CO2 as part of a pilot test at the Tomakomai demonstration project in Hokkaido, Japan, under the Japan CCS initiative. Japex expects its CCUS business in the US and Japan to contribute to earnings from fiscal year 2031 onward, while continuing to pursue opportunities in Norway and Southeast Asia.

Financial Targets and Net-Zero Goal

Financially, Japex aims to more than double its profit attributable to owners from 45 billion yen in 2025 to 100 billion yen by 2035, targeting a return on equity of at least 12% in 2035. The company maintains its net-zero emissions goal but has fine-tuned it to a more pragmatic approach regarding transition timing and process, without providing further details. Japex's 2026 results are expected on May 13.