Inpex, Japex Shares Fall as Oil Drops to 20-Month Low

By Shigeru Sato

Nov. 7 (Bloomberg) -- Inpex Corp., Japan's largest oil explorer, and Japan Petroleum Exploration fell in Tokyo trading as crude oil declined to its lowest in 20 months.

Japex, as Japan's second-biggest energy explorer is known, slumped 10 percent to 3,750 yen, its biggest one-day decline in three weeks. Inpex lost 9 percent to close at 546,000 yen, capping a two-day losing streak. Today's declines outstripped the 3 percent fall in the benchmark Topix index.

Oil plunged below $60 a barrel, its lowest since March 2007, on signs fuel demand will fall as the global economy contracts, reducing the value of the fuel the Japanese companies pump at fields overseas.

``Their declines are in line with falling oil prices and the slumping equities market in Tokyo,'' said Toshinori Ito, a senior energy analyst at UBS Securities Japan Ltd. ``However, the financial crisis won't discourage Japanese exploration companies from pushing ahead with large-scale projects because of the financial backing available from state-controlled banks.''

Japex blamed declining oil prices when it cut its full-year profit outlook by 25 percent today in Tokyo. Inpex will announce its earnings on Nov. 11.

Crude oil in New York has lost more than half its value since touching a record $147.27 a barrel on July 11. It traded at $61.02 a barrel at 3:16 p.m. Tokyo time.

The Topix Mining Index, which tracks the performance of six companies including the oil explorers, slid 8 percent, making it the second-worst performer among the 33 industry groups that make up the benchmark.

To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net;