Inpex on Thursday forecast a 38% fall in net income this year to ?270 billion ($2 billion) due to lower oil prices and a stronger yen, after soaring energy prices carried it to a record 2022.

A rapid recovery in demand after the end of pandemic lockdowns and a surge in crude oil and natural gas prices, driven by Russia¡¯s invasion of Ukraine boosted profits for energy companies worldwide last year.

Japan¡¯s top oil and gas exploration and production company posted a 97% jump in full-year net profit to a record ?438.2 billion.

¡°Our sales rose, (oil and gas) unit prices climbed and the yen fell, which all contributed to a sharp gain in profit,¡± Daisuke Yamada, Inpex¡¯s managing executive officer, said during a news conference.

But the company sees the average Brent oil price falling to $75 per barrel in 2023 from $99 last year, and the yen rising to ?125 per dollar from ?131.6.

Inpex expects sales to fall 19% to ?1.9 trillion this year, reversing some of 2022¡¯s 87% increase, though its key Ichthys liquefied natural gas project in Australia is expected to increase production to 9.2 million tons from 7.8 million tons last year when maintenance reduced output.

¡°We want to offset the impact from lower energy prices with higher production at Ichthys,¡± Yamada said.

The 2023 forecast also includes a ?35 billion expenditure for the project to respond to Australia¡¯s ¡°safeguard mechanism¡± reform.

Australia¡¯s Labor government proposed in January to make the country¡¯s biggest polluters slash emissions by 30% over the next seven years.

¡°We may need to buy carbon credits if we fall short of the requirement of cutting emissions, so we are booking these costs,¡± Yamada said, adding that the project¡¯s closure cost, including restoration, is also included.

Inpex plans to increase its full-year dividend to ?64 per common share this year from ?62 last year.