Japan Petroleum Exploration (Japex) has announced a strategic shift in the company’s investment plans to prioritise oil and gas exploration and production (E&P) investments through 2030, reported Reuters.

This move revises an earlier plan to aggressively expand its renewables businesses, according to the company's president, Michiro Yamashita.

The decision comes as other global industry peers have also scaled back investments in renewables due to lower returns.

Meanwhile, profits from the oil and gas sector have surged, mainly due to supply disruptions caused by Russia's invasion of Ukraine, which have led to higher energy prices.

In 2022, Japex set a goal to evenly split its profits between E&P and other businesses by the 2030 financial year to support the energy transition towards carbon neutrality.

However, Yamashita now indicates that the current earnings contribution from E&P, which stands at 70–80%, is likely to remain stable through 2030. This projection is driven by planned expansion in the US and Norway.

Yamashita also mentioned that while Japex may consider investing in non-oil and gas segments, such investments would be selective and based on the viability of returns.

Japex’s original E&P investment plan was set at Y230bn ($1.5bn) over nine years, but now the company expects to invest 1.5-times that amount or more, as current crude prices have significantly exceeded the plan's assumed $50 a barrel.

"My biggest challenge now is acquiring a tight oil operator business in the US and building an investment structure for sustainable profits," said Yamashita, expressing a desire to secure a deal this year or in 2026.

He noted that investment per project would likely be capped at $300m, reflecting lessons from past losses on large investments and Japex's exit from a Canadian oil sands project.

Yamashita emphasised the importance of striking a balance between shareholder returns, financial soundness and investment discipline for the company.

In Norway, Japex is looking to boost profits by expanding production at an existing project and through further exploration.

The company views the energy policy of the Trump administration as enhancing predictability and stability, which Yamashita described as "favourable" for Japex.

The company aims to gradually acquire gas assets in line with the US plan to expand liquefied natural gas exports.