Inpex Corporation SWOT and PESTLE Analysis

Strength

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Weakness

1. Inpex is betting a lot on “Natural Gas” as a cleaner alternative: Inpex has already invested in a lot of projects that will help boost its production of natural gas, especially Liquified Natural Gas. Inpex is projecting LPG as a cleaner alternative to the other fossil fuels and thus better for climate. Inpex is also investing a lot in making sure that the LNG it produces is carbon neutral. But activists and reports are already coming out and saying that natural gas cannot be a green alternative to fossil fuels as natural gas also emits a substantial amount of carbon dioxide but 50% less than coal. Governments have started looking at natural gas as a transition fuel and investments in it, for the time being, is looked at as investment in green energy. But as the urgency to tackle climate change becomes more imminent and governments become more stringent in their approach to cut down Greenhouse Gas emissions, there is a high risk that natural gas will soon start attracting the negative image of other fossil fuels and will also start attracting all kind of taxes and restriction.

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

1. More and more countries are moving towards imposing carbon tax: Carbon tax is a concept under which a government sets up a certain price that organisations will have to pay for a certain amount of greenhouse gas (generally for each ton of greenhouse gas) they emit. This is done as an incentive for the companies to reduce their greenhouse gas emissions and to move towards renewable and cleaner sources of energy. The idea of carbon tax has been gaining support globally. Even USA, a country with a presence of Big Oil lobby, has seen different five different proposals of carbon pricing introduced in its Congress. Already 12 states in USA have a carbon pricing regulation in place and it is thought that there would be regulation at the federal level too, sooner rather than later.

This can affect Inpex negatively as the process of exploration and production of oil and gas generally emits a lot of greenhouse gas. Although it is trying to make its whole process carbon-neutral and net zero-emission by 2050, a carbon tax or some similar provision placed on it before that can hike Inpex’s total costs and expenses. Also, natural gas, one of the major products on Inpex, produces a substantial amount of greenhouse gases. Thus, organisations might reduce their consumption of natural gas and this will reduce the total net sales of Inpex quite substantially.

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Environmental

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