INPEX is one of the major gas and oil E and P organization in Japan. The company is currently engaged in more than 70 projects in more than twenty countries internationally (Carpenter & Susan, 2015).
The company is engaged in the natural gas and oil exploration, production and development activities worldwide. Moreover, it increases the highest production and reserve volumes amongst the corporations in Japan. The key initiative of INPEX in Australia is its lchthys LNG project and it is engaged actively several projects in Japan and also in other international countries (INPEX, 2017).
The main objective of the company is to provide efficient and stable supply of energy to the customers by exploration and development of resources of gas and oil both internationally and domestically.
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Now we will discuss the structure of the INPEX and the different factors in details.
The structure of the business of INPEX is that of a company. INPEX is a public limited company with its shares listed on different stock exchanges in different countries such as in Japan the company listed its shares on Tokyo stock exchange (Huang & Weibing, 2015). Due to its listing on stock exchange, local individuals are able to purchase a share in the company by purchasing its shares (McGrath & Gabrielle, 2017).
The business environment at international level that surrounds the industry has been increasing severely and uncertain which leads to the following below factors:
Continued and intense anxiety over future of economy of world and decrease in the demand of the oil due to the recent financial crises at the international level, this environment of business has an impact on INPEX business at international level because demand of oil decreases.
Risks of the drastically and rapidly fluctuating gas and oil prices has also risk for the company’s profit margins in future.
Company is also facing increased competition from the major gas and oil companies at the international level especially from companies of gas and oil in India and China. Economic and technical hurdles are rising as the sites of project shifted towards the frontier areas (Hettihewa & Andeobu, 2015). Moreover, the production and exploration costs are escalated and the increased risk of the delays in schedules is affecting the business of the company at international level (Bridge & Gavin, 2018).
Current development of policies at international level regarding the issues of global warming that are directed towards society of low carbon has shifted in higher gear, with policy of energy in Japan has placed priority on this policy so as to encourage the conservation of energy and also development of the alternative different energies (Vivoda & Vlado, 2016). These conditions induce emergence of the movements to bring efficiency in the energy, to supply different forms of the energy with lesser impacts on environment and to promote different new and advance technologies that will promote the working of oil and gas companies (Vlado & Vivoda, 2014). Thus, this change at international level has increased the productivity of INDEX in different international countries such as in Australia.
The business of the company has also to consider some of the risks that it may faces. As the development and exploration are the major steps to secure the reserves of oil and gas that are essential for the sustainable development of business of the Group but these type of investment involves both the economic and technological risks for the company because failed development or exploration could have severe impact on the results of the company’s operations and also on its financial position (Andeobu & Hettihewa, 2015).
The business of the INPEX is also facing the global risk at the international level because different countries have different polices and barriers that INPEX need to consider while working in nay international business. Due to these global risks the company is facing the financial risks also because in overseas businesses the large percent of the prices of crude oil and natural gas are determined by the conditions in the international markets (INPEX, INPEX annual report,business risks, 2017). Moreover, these prices significantly fluctuate in relation to changes in different factors including the international or local demand and supply and also according to the conditions and trends in the financial markets and in global economy. These variety of factors are not in control of the INPEX and that’s why they are not able to predict the oil prices and thus faces the fluctuations in the prices and thus a financial risk they are facing (Crossley & Penelope, 2018).
Due to the fluctuation in the oil price the share price of the company is affected on different stock exchanges due to which the demands of the shares decreases and the supply of the shares increased as the existing shareholders afraid that share price may become more decreased in future that’s why they started selling their shares in the stock exchanges (Crossley & Penelope, 2018). Thus, it affects the financial position of the company.
These were some of the risks that INPEX business faces that are highlighted here.
The success of the INPEX business is also based on its business principles due to which its employees are working productivity and work environment is fantastic.
The company is following the business practice of understanding and complying with Safety, Environmental and health policy of INPEX group. Moreover, the human rights are respected and they don’t engage in any type of discrimination and also avoid its company management from infringement of the human rights (John & Davis, 2018). As it is known that company performance and productivity demands upon the productivity of its employees and employees become productive when they become satisfied (Kim & Hyo-Kyung, 2016) that’s why in right of this theory the company is respecting its employees and are not engaged in any type of harassment (Jain & Ruchi, 2014). Furthermore, in order to improve its employee’s productivity and satisfaction the company has created sound and efficient work environment for them (John & Davis, 2018).
Further, the company is following the fair business practice by engaging in free and fair competition and conform to the agreements of trade at national and international level. INPEX comply with applicable regulations and laws of relevant countries on the bribery prohibitions and corruption and also engage its business in the creation of sound business environment and international reforms (John & Davis, 2018).
This indicates that INPEX is following the best business practices in the industry and the success of the company also depends upon its best practices of business.
The company is working on improving its operational, human resources, financial and marketing functions of its business and is taking different steps for its improvements.
As the mission of INPEX is to provide stable energies supplies so as to improve its financial strength and for achieving this mission the company is investing in its operational capabilities such as it is improving its supply chain management and also investing to increase the level of the existing exploration and own reserves and production after improvement in operational capabilities (Dutton & Cane, 2017).
In next few years, the company has planned to invest about 1400 billion of yens in the existing projects for its development and exploration and also to invest in other new projects.
In order to secure funds from external sources they have consider some trustworthy financial organizations such as commercial banks and financial institutions of government (Dutton & Cane, 2017).
For promotion of the large scale projects such as Abadi and Ichthys the company needs managerial and technical expertise in different fields which should be international standards (Hughes & Llewelyn, 2015). For this purpose company is taking efficient approach of hiring suitable human resources for the operating and developing projects and also they are outsourcing some human resources from other companies (Dutton & Cane, 2017).
Furthermore INPEX is working on its marketing department and is trying to improve it so as in future it will be beneficial for the company productivity and sales (Dutton & Cane, 2017).
Thus, it is concluded that INPEX is a multinational and is facing different challenges due to its international business environment. Furthermore, some of the risks that INPEX is facing in its business operations in different countries are also identified such as financial risk, global economic risks, and technological risks. Moreover, the business practices and principles are also discussed in this essay. In the last but not the least the different improvements that INPEX will introduce in its different functions were also discussed.
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