Akasaka Biz Tower
5-3-1 Akasaka, Minato-ku, Tokyo 107-6332, Japan

https://www.inpex.co.jp/english

This Report was printed using environmentally conscious
methods and vegetable oil-based ink.

INPEX CORPORATION Integrated Report 2022 For the period ended December 31, 2022

Integrated Report 2022
For the period ended
December 31, 2022

ABOUT OUR REPORTING
In editing this Integrated Report, we have referred to documents
such as the International Integrated Reporting Council’s (IIRC) International Integrated Reporting Framework and the Guidance
for Collaborative Value Creation issued by Japan’s Ministry of
Economy, Trade and Industry (METI), incorporating information
with the aim of straightforwardly conveying our business activities within the reporting period from both financial and non-financial perspectives. This Integrated Report reflects ourperception of the business environment, including the Russia-Ukraine situation and transition to a net-zero carbon society,while taking into account our management policy, the first year’s
progress of the Medium-term Business Plan, our human capitalmanagement, climate change response and other factors in thecontext of that perception.
We will continue working to enhance the information coveredby our Integrated Report as a communication tool contributing todialogue with our stakeholders.

Our Mission

We are committed to contributing to thecreation of a brighter future for society
through our efforts to develop, produce
and deliver energy in a sustainable way.

DISCLAIMER
Information contained in this Integrated Report is not an offer ora solicitation of an offer to buy or sell securities. You are requested to make investment decisions using your own judgment.
Although the Company has made sufficient effort to ensure theaccuracy of information provided herein, the Company assumes
no responsibility for any damages or liabilities including, but notlimited to, those due to incorrect information or any other reason.
FORWARD-LOOKING STATEMENTS

Communication Tool Map
Financial Information

Non-financial Information

Integrated Reports
Securities Reports

Basic management policy towards a net zero carbon society by 2050

As a pioneer in energy transformation (EX), INPEX will provide
a stable supply of diverse and clean energy sources including
oil and natural gas, hydrogen and renewable power.

Vision for around 2030

INPEX will transform net zero carbon from an ideal to reality.
Invest up to about 1 trillion JPY in the 5 net zero businesses
and aim for these businesses to generate about 10% of
operating cash flow by 2030

Publications

NOTES REGARDING FIGURES

Fact Books
Sustainability Reports
Corporate Brochures

OnlineThis Integrated Report includes forward-looking information thatreflects the Company’s plans and expectations. Such forward-looking information is based on the current assumptions and beliefs of
the Company in light of the information currently available to it,
and involves known and unknown risks, uncertainties and otherfactors. Such risks, uncertainties and other factors could cause theCompany’s actual results, performance, achievements or financial
position to be materially different from any future results, performance, achievements or financial position expressed or impliedby such forward-looking information. Such risks and uncertainties
include, without limitations, fluctuations in the following:
the price of and demand for crude oil and natural gas;exchange rates; andthe costs associated with exploration, development, production
and other related expenses.
The Company undertakes no obligation to publicly update or revise any information in this Integrated Report (including forward-looking information).

Corporate Website

Securities Reports (available in Japanese only)
https://www.inpex.co.jp/ir/library/securities.html
Fact Books
https://www.inpex.co.jp/english/ir/library/factbook.html
Sustainability Reports
https://www.sustainability-report.inpex.co.jp/fy2022/en/
Corporate Brochures (available in Japanese only)
https://www.inpex.co.jp/company/pdf/brochure.pdf
Corporate Website
https://www.inpex.co.jp/english/

Financial figures in this Integrated Report have been, in principle,
rounded down. The “Project Overview by Core Business Areas”
section (starting on page 38) describes, in principle, the operating
situation as of March 31, 2022. Figures in parentheses denotenegative amounts. The natural gas production volume for projects
in production is not the volume at wellheads but corresponds to
the gas volume sold to buyers. INPEX CORPORATION is listed on
the Prime Market of the Tokyo Stock Exchange under the securities code 1605. The Company is also included in the Nikkei Stock
Average (Nikkei 225) and the JPX-Nikkei Index 400 (JPX400).
International Accounting Standards (IAS) 12 “Income Taxes”(amended in May 2021) has been applied to some foreign consolidated subsidiaries and foreign equity-method affiliates of the INPEX Group from the first quarter of the fiscal year ending
December 31, 2023. As for the quarterly securities report etc.
during the fiscal year ending December 31, 2023, since theamendments are applied to the fiscal year beginning on or afterJanuary 1, 2023, INPEX has retrospectively recognized the cumulative impact by revising the retained earnings at the beginning of
the reference period (fiscal year ended December 31, 2022), andhas revised subsequent profits and losses based on the amendments. As this Integrated Report is for the fiscal year ended December 31, 2022, such amendments to the financial figures are
not required under statutory accounting, however for reader’ convenience, revised figures after the application of the amendments
are shown throughout this Integrated Report.
This report is unaudited.

CONTENTS

02 INPEX’s Vision and Value Creation

24 Growth Strategies for Value Creation

02 A History ofValue Creation
04 INPEX’s Business
06 Value Creation
Process
08 Message fromthe Representative
Directors

24 INPEX Strengths
32 Building a Stronger
Management Foundation
26 INPEX Vision @2022 Longterm Strategy
34 Business Strategy
28 INPEX Vision @2022 Medium- 36 Centralize Business Portfolio
term Business Plan 2022–2024
by Setting Core Business
Areas
30 Message from the SeniorVice President of Corporate 38 Project Overview by Core
Strategy & Planning
Business Areas

10 Message from the
President & CEO
18 Financial and Operating
Highlights
22 Sustainability Highlights

50 Management Foundation to
Advance Growth Strategies

50 Sustainability
66 Corporate Governance
76 Roundtable with Outside Officers

80 Business and Financial Overview
80 Message from the Senior Vice
President, Finance & Accounting
82 Segment Overview

91 INPEX Green Bond
1st Annual Report
92 Subsidiaries and Affiliates

84 11-Year Financial Information

94 Business Risks

86 Management’s Discussion andAnalysis of Financial Condition
and Results of Operations

101 Oil and Gas Reserves andProduction Volume
104 Corporate Information

INPEX’s Vision and Value Creation

Energy Situation in Japan and Worldwide

A History of Value Creation

Teikoku Oil, Co., Ltd.

INPEX has developed as a company built around upstream businesses consisting of the exploration, development and production of oil and natural gas. Going forward, we are committed to contributing to thecreation of a brighter future for society through the stable supply of diverse and clean energy sources,from oil and natural gas to hydrogen and renewable energy-derived electricity, while sustainably increasing our corporate value.

1950

1962

1970

1984

Yabase Oil Field (deep zone
development)

Tokyo Line is completed

Production starts at HigashiKashiwazaki Gas Field

Production starts at
Minami-Nagaoka Gas Field

Founded in 1941
1960

1980

1992

Production starts at West
Bakr Oil Field

Launches an oil field reactivation
project in Venezuela

1970

1980

1959

1975

Production starts
at Kubiki Oil and
Gas Field

Production starts at
Offshore D.R.
Congo Oil Field

1965
Production starts
at Minami-Aga
Oil Field

Other

From 1996

1990

Crude oil

INPEX Corporation

Production starts at Griffin oil fields

Founded in 1966

Discovers Kashagan Oil Field

1970

1980

Production starts one after
another in oil fields in
Offshore Mahakam Block

18%

2017

Naoetsu LNG
Terminal iscompleted

Extension of the
production sharing
agreement for the
ACG Oil Fields

2008

Photo courtesy of BP

Founded INPEXCORPORATIONINPEXFY2022/12
Net sales

2021

2000

2018

Extension ofconcessionagreement forUpper Zakum
Oil Field¥704.2

Production starts
at Ichthys LNG
Project

Crude oil

1984: Tambora Field (oil and gas)/
1990: Tunu and Widuri Fields/
1992: Belida Field

See page 26

2021

66

%

2015

2019

Acquires interestin ADCO onshore
concession

Ichthys LNG Project
ships its 100th LNG
cargo

2004
Production starts at
Bayu-Undan Gas-Condensate
Field

Production starts at Attaka Field

1974
Production starts at Bekapai Field

Business Development Strategy

Towards a Net Zero Carbon Society by 2050

Changes in 1966 North Sumatra Offshore Petroleum Exploration Co., Ltd. 1967 Japex Indonesia, Ltd. 1975 Indonesia Petroleum, Ltd.
corporate name 2001 INPEX CORPORATION

2004

Japan Oil Development
Co., Ltd.

Established 1973
1990

Vision 2040

Japan Oil Development Co., Ltd. becomesa wholly owned subsidiary of INPEX

2000

Delivering Tomorrow’s Energy Solutions

Participates indevelopment of Umm
Shaif and Lower Zakum
Oil Fields throughacquisition of interestin ADMA Block

Medium-term Business
Plan 2018–2022

Medium- to Long-term
Vision of INPEX
1982

1985

1987

Production starts at Upper
Zakum Oil Field

Production starts at Umm
Al-Dalkh Oil Field

Production starts at Satah Oil
Field

Background of Integration On October 1, 2008, three companies—INPEX Holdings, Inc., INPEX CORPORATION and Teikoku Oil Co., Ltd.—were integrated to form a new company, INPEX CORPORATION with thegoal of establishing an internationally competitive management foundation and achieving sustainable growthin corporate value by building a balanced asset portfolio, further strengthening its sound financial base andbringing together technical capabilities for resource development.

02

INPEX CORPORATION Integrated Report 2022

©Equinor

Acquires Snorre
Oil Field, etc. in
Norwaybillion

1984–1992

1980

From 2022
Formulates INPEX
Vision @2022, ourLong-term Strategy
and Medium-term
Business Plan withan eye toward 2030
and 2050

Changes its
Japanese corporatename to Kabushiki
Kaisha INPEX

2010

INPEX
FY2006/3
Net sales

Oil and gas fields in various locations commences production

1972

2013

2014

Acquires interest in
ACG Oil Fields

Production starts
at Handil Field

Kashagan Oil
Field commences
crude oilshipments¥2,324.6

34%

2003

1975

Final investment
decision (FID) for
Ichthys LNG
Project

Crude oil76%

Natural gas, LPG

Discovers Abadi Gas
Field and Ichthys
Gas-Condensate Field

1990

2016

1%

billionFounded INPEX
Holdings, Inc.

2000

Other

23%

2012

billion

2006

2000

Natural gas, LPG¥100.7

2006

Expansion of domestic Production starts at
Shizuoka Line istrunk pipelines Shin
Ohanet Gas Field
completed
Tokyo Line Stage 1–3
Matsumoto, Iruma,
1984
2004
Kofu Lines
Production starts at
Launches gas field development
Offshore Iwaki Gas
services in northeast Mexico
Field

1994

40%

LPG

Teikoku Oil Co., Ltd.
FY2005/12
Net sales

2000

2003

42

Natural gas,%

INPEX’s Vision and Value Creation

In 2022, the world economy had been on a modest recovery track from the slowdown associated with the impact of
COVID-19 until it was hit by a series of challenges triggered by the crisis in Ukraine, including threats to the security
situation, strategic use of natural resources and energy in international relations, and a tightening energy market leading to soaring oil and natural gas prices. Furthermore, the Japanese yen significantly weakened due to factors such as
interest rate hikes in the US and other countries.
We expect that energy demand will continue to trend upward over the medium to long term, driven mainly by the
expansion of the world’s population and economic growth in emerging countries. In particular, demand for oil and natural gas is also expected to trend upward in line with the world economy’s recovery and growth, creating robust demand especially in Asia.
A continued challenge for Japan is to improve its independent development ratio of oil and natural gas. The Japanese government raised its target independent development ratio of oil and natural gas to 50% or more in 2030 and
60% or more in 2040 in its Sixth Strategic Energy Plan approved in 2021.
On the other hand, since COP26 in 2021, efforts have been strengthened to achieve the long-term goal of limiting
the average temperature increase from pre-industrial revolution levels to less than 2°C and further to 1.5°C in order toaddress climate change. In addition, countries such as the EU nations and the UK have announced so-called “net zerotargets” to reduce greenhouse gas emissions to effectively zero in 2050. The Japanese government has also declaredits plans for carbon neutrality by 2050 and set greenhouse gas reduction targets. We believe that the urgency of addressing carbon neutrality will increase as these discussions toward a net zero carbon society progress.

Outlines specific initiatives andtargets for the five-year period
between fiscal 2018 and fiscal 2022

Ichthys and our growthover the next decade

Clarifies key initiatives and targets
for the period leading up to the
Ichthys production start-up

Net
sales

2007/3

2008/3

2009/3

2010/3

2011/3

2012/3

2013/3

2014/3

2015/3

2016/32017/3

2018/3

2019/3

2019/122020/122021/122022/122023/12
Forecast
INPEX CORPORATION Integrated Report 2022

03

INPEX’s Business
INPEX’s Vision and Value Creation

INPEX is developing its oil and gas business and its net zero businesses. In the oil and gas business,
which is our core business, we will continue to fulfill our responsibilities for the development of sourcesof energy and their stable supply by promoting a more resilient and cleaner business. At the same time,in the 5 net zero businesses, we will expand each business at an accelerated pace and secure our position as a major and trusted player.

Oil and Gas Business5 Net Zero Businesses

Our core business is the upstream oil and gas business, which involves finding and extracting crude oil and natural
gas that exists underground.
The activities of the oil and gas business can be envisioned as the flow of a river. The upstream consists of the
exploration, development and production of oil and natural gas. The midstream is where products are transported.
The downstream refers to refining and sales to users.

Net zero businesses provide solutions that contribute to the reduction of greenhouse gas emissions toward the realization of a net zero carbon society.

We collect extensive information on the local legal
systems and country risks
related to areas in which oil
and natural gas are expected to exist. We then apply
and bid for mining rights
and/or exploration and development rights and entera contract for explorationand development.

Signing ceremonyof a contract

1

The processed oil and natural gas are sold to customers in Japan andoverseas by tanker whenmarine transportation isrequired, or by pipeline
when land transportationis necessary.

Acquisitionof Blocks

6

Marketing5.

3

Appraisal

INPEX CORPORATION Integrated Report 2022

Renewable
Energy Business
Reduction of CO

The hydrogen and ammonia business entails the production and supply of hydrogen and ammonia, energy
sources that do not emit CO2 when combusted.
Among these, the blue hydrogen project isa business that sells hydrogen produced from oil andnatural gas, and stores the CO2 emitted in the production process into the ground by CCS/CCUS.
The ammonia business converts hydrogen into ammonia for transportation and sale. Ammonia is easier
to liquefy than hydrogen and has established transportation technology, making it promising as anenergy carrier for hydrogen, and demand is also expected for its direct
use as a fuel, including for mixed
combustion with other fuels inthermal power plants.

Hydrogen and2
The renewable energyammoniabusiness generates elec- emissions from oil and gas
operations(CCUS)
tricity using natural energy sources such as thewind, sun, and geothermal heat. Renewable
5 net zero businesses
energy emits significantly less CO 2 thanthermal power generated by coal, oil, or LNG.

Reservoir
evaluation(image)Facility
construction

Development

After a final investment decision (FID) has been made,steps are taken to construct
the facilities needed to produce and ship crude oil andnatural gas. This includes
facilities that separate resources into their liquid andgaseous states to remove
impurities and pipelines tofacilitate transportation.

Where do crude oil and natural gas come from?
Crude oil and natural gas are thought to originate from organic matter, such as the remains of once-living organisms that accumulated at thebottom of seas and lakes, that was then subjected to extreme heat and pressure underground (organic origin theory). Crude oil and natural
gas that have formed deep underground are lower in weight than the water in the earth, allowing them to gradually rise to the surface over along period of time. If the crude oil and natural gas encounter highly dense geological formations on the way to the surface, however, deposits form that become oil and gas fields.

04

In the CCS business, CO2 is separated and captured,placed in stable geological formations deep underground, and stored for a long period of time. In addition to CCS, in the CCUS2 business the captured CO2
is used to improve oil and natural gas recovery rates or
to convert CO2 into new products or energy.
1

Renewableenergy4.
LNG plant

Hydrogen and Ammonia Business

Carbon recycling
and new business
opportunities

Development

Production

The extracted oil andnatural gas are processed
to separate and remove
impurities so that they
can be sold as products.
Natural gas is also liquefied in the case of marinetransportation.

When the presence of oil
and natural gas has been
confirmed, we drill appraisal wells to assess the extent
of the oil and gas fields andto evaluate the amount ofreserves, while also making
judgments regarding thecommercial viability.

Exploration

4

Appraisal

Carbon Capture, Utilization andStorage (CCUS) BusinessBusiness and Financial Overview

Production

3.

2

Oil and Gas Business

5

LNG tanker

In addition to geologicalsurveys, we utilize geophysical surveys conducted
through satellite images
and seismic waves to assess
the potential subsurface accumulations of oil and natural gas. In areas thought tobe promising we drill exploratory wells to confirm
the presence of oil and gas.

Drilling rig

MarketingExploration

Management Foundation to Advance Growth Strategies

6.

2.

Acquisition of Blocks

Growth Strategies for Value Creation

1.

Forest Conservation

Forest conservation

Forest conservation refers to projects that reduce CO2
emissions or absorb CO2 through forest conservation
and afforestation. In addition, these projects are expected to have synergistic co-benefits such as preservation of precious biodiversity and water resources,
reduction of soil erosion, alleviation of poverty and improvement of the livelihoods of local communities, andwill broadly contribute to the SDGs advocated by theUnited Nations.

Carbon Recycling and
New Business Opportunities

Carbon recycling refers to the reuse of CO2 as a valuable
resource using methanation, artificial photosynthesis
and other technologies.
Methanation is a technology for synthesizing methane from CO2 and hydrogen, which means it can produce methane as an energy source without increasing
CO2 emissions.
As for new business opportunities, we are engaged
in research and development for the use of drones in facility inspections.

1 CCS: Carbon dioxide Capture and Storage
2 CCUS: Carbon dioxide Capture, Utilization and Storage

INPEX CORPORATION Integrated Report 202205

Value Creation Process

Rising geopolitical risk
Increasing oil and gas prices
Spread of COVID-19 continues
Countries announcing net zero targets
Government policy to increase Japan’s
independent development ratio of oil andnatural gas rilemma in which the resolution of threeTchallenges is sought at the same time
• Increased
awareness of the importance of energy
security (Security)• Attention focused on equitable access to energy(Affordability)• Acceleration of energy transition (Sustainability)

InputsBusiness Processes

Human Capital

INPEX Vision @2022 Long-term Strategy andMedium-term Business Plan 2022–2024

 lobal and diverse personnelGNumber of employees:
3,364 (consolidated)

Opportunities

Risk of disasters, accidents, system failures, etc.
Risk of failure in exploration, development or
production
Risk of fluctuations in crude oil prices, natural
gas prices, foreign exchange and interest rates
Climate change risk
Country risks, etc.

Increasing importance of natural gas in energy transition
Opportunities for a more resilient and cleaner upstream businessVarious changes toward a net zero carbon society (e.g.,increasing demand for hydrogen, ammonia, CCUS andrenewable energies)
Opportunities to develop new businesses that respondto society’s new needs

Energy supply
indispensable topeople’s livelihoods

Upstream Oil andNatural Gas Business

Increasing
reserves

Exploration, production and marketing of
crude oil and natural gas

C rude oil, natural gas, air,water, land, natural energy

Accounting ofrevenue attributableto sales

Oil

390.3
1,211.5

Growth ofproduction
volumeSee page 05

million cubicfeet per day

Environmental Values

Renewable energy

ForestconservationPowergenerated

744,259

MWh

Manufactured Capital roduction, manufacturingPand supply facilities inJapan and around the world

CCUS
Renewable energyIntellectual Capital &D activity expenses:
R¥1.91 billion
Establishment of INPEX
Research Hub for Energy
Transformation (I-RHEX)

Carbon recycling
New businessGovernance

Sustainability
Material Issues

Compliance

Note: Results for the fiscal year ended December 31, 2022

06

INPEX CORPORATION Integrated Report 2022

Scope2

6,839
69
28

Net carbon
intensity

See page 50Expanding
supply of natural gas asa cleaner source of energy
Cleaner upstream operations
through hydrogen/CCUS businesses
Reduction of greenhouse gas
emissions
Conservation of biodiversity

Greenhouse gas emissions
Scope1

Human capital

Stable supply of energy to societyIncrease in Japan’s independent
development ratio of oil and natural gas
Contribution to local communities andcreation of employment opportunities
Reduction of workplace injuries
and prevention of major accidents

thousandtons- CO2e
thousandtons- CO2e
kgCO2e/BOE

Contribution to
Achieving the SDGs*

As a pioneer inenergy transformation(EX), INPEX will
provide a stablesupply of diverse andclean energy sources
including oil andnatural gas, hydrogenand renewable power.

Vision foraround 2030
INPEX will transformnet zero carbon froman ideal to reality.

Business and Financial Overview

Hydrogen/Ammonia

thousandbarrels per day(Barrels of Oil Equivalent 231.8
thousand barrels per day)(as of June 30, 2023)

5 Net Zero Businesses

Generation of free cash flow
Shareholder returns
Improvement of enterprise value/
shareholder value

Social Values

Natural gas

See page 04

Economic Values

Basic management policy
towards a net
zero carbon
society by 2050

Management Foundation to Advance Growth Strategies

Investments for
exploration anddevelopment

Natural Capital

Moody’s A2 (stable),
S&P A− (positive),
R&I AA (stable),
JCR AA+ (stable)

Outcomes

Products

 ood relationships withG
stakeholders in Japanand around the world

 quity ratio: 60.1%
E
Net D/E ratio (Inclusive of
Ichthys downstream IJV): 46%
Long-term credit ratings:

Risks

Outputs

See page 26

Social and Relationship Capital

Financial Capital

We are committed to contributing to the creation ofa brighter future for society through our efforts todevelop, produce and deliver energy in a sustainable way.

Growth Strategies for Value Creation

External
Environment

Global Developments

Our Mission

INPEX’s Vision and Value Creation

INPEX will proactively engage in energy structure reforms toward the realization of a net zero carbon society by 2050, while responding to the growing energy demands of Japan and the world and fulfilling theCompany’s responsibility for the development and stable supply of energy over the long term. By doing so,
INPEX will contribute to a brighter future for society and sustainably increase its corporate value.

Invest up to about 1
trillion JPY in the 5
net zero businesses
and aim for thesebusinesses togenerate about 10%of operating cash
flow by 2030

*SDGs: Sustainable Development Goals

Local
communities
Climate change
response

HSE
INPEX CORPORATION Integrated Report 2022

07

Message from the Representative Directors
INPEX’s Vision and Value Creation

Accelerating our growth strategy toturn the rapidly changing businessenvironment into an opportunity

Representative Director
and Chairman

Takayuki Ueda
Representative Director,
President and CEO

INPEX CORPORATION Integrated Report 2022

Business and Financial Overview

08

Management Foundation to Advance Growth Strategies

Representative Director
and Chairman

Growth Strategies for Value Creation

Toshiaki Kitamura

In the fiscal year ended December 31, 2022, net sales hit an all-time high, surpassing 2 trillion Japanese yen on the back of higher oil prices, a weaker Japanese yen and other external factors. Ordinary income and net income both reached record-high levels. This performance was not fueled
simply by these external factors, but also by our ability to maintain stable operations at sites suchas the Ichthys LNG Project even during the COVID-19 pandemic.
The energy industry is currently facing the trilemma of having to simultaneously address thechallenges of security, affordability and sustainability. Against the backdrop of rising crude oil andgas prices, tight supply and other conditions triggered by Russia’s invasion of Ukraine, we are seeing a growing emphasis on ensuring energy security and affordability, meaning equitable accessthat would enable all people worldwide to secure stable energy, both in terms of volume andprice. At the same time, there are ongoing debates on the need to accelerate the energy transition to help achieve sustainability of the global environment. How we address these three challenges has become a key focus of the international community. Many more people are also
starting to realize that natural gas and especially LNG will play an important role in the energy
transition.
The most important things we can do to turn these changes into business opportunities for ourcompany based on our long-term vision are: (1) firmly understand market trends and keep up withthe market, (2) accelerate our response to the energy transition and (3) refer back to our mission ofproviding a stable supply of energy as we meet the needs of our customers by steadily supplying
energy, including oil and natural gas.
In February 2022, we formulated our Long-term Strategy and Medium-term Business Plan (INPEX
Vision @2022) that includes specific initiatives, goals and strategies for promoting the stable supply of energy and energy transition initiatives at the same time. We will continue to monitor trends
in market demand and pursue much cleaner upstream oil and natural gas operations as our corebusiness. We will also accelerate our efforts in our 5 net zero businesses (hydrogen and ammonia,
CCS/CCUS, renewable energy, carbon recycling and new business and forest conservation). In
other words, we will do our utmost to turn the rapidly changing energy business environment intoa business opportunity for INPEX.
Domestic and international circumstances surrounding energy remain uncertain, but we aim toutilize our capital and technological strengths to become a pioneer in the field of energy transformation, as expressed in the identity that spells out our company name—Innovative Pioneer of Energy Transformation (EX).
We will continue to help create a net zero carbon society through the two-pronged pursuit ofensuring a stable supply of diverse, clean energy not limited to oil and natural gas but includinghydrogen and renewable energy, and addressing climate change in a responsible manner.
We would like to take this opportunity to ask for the continued and unwavering support andunderstanding of all our stakeholders.

Representative Director,
President and CEO

INPEX CORPORATION Integrated Report 2022

09

Message from the President & CEO
INPEX’s Vision and Value Creation

To maintain a leading role in any era.
We will implement both stable energy supply
and climate change response.

Growth Strategies for Value Creation

Amid the rapid changes in the global energy business environment, INPEX is steadily advancing the threeyear Medium-term Business Plan outlined in INPEX Vision @2022 and continues to take on the challenge of
expanding its business opportunities.

Overview of the fiscal year ended December 31, 2022

In the fiscal year ended December 31, 2022 (fiscal 2022),
Japan’s economic outlook remained uncertain as theconflict between Russia and Ukraine intensified, but webegan to see a recovery trend as people grew accustomed to living with the pandemic. However, the downturn in the global economy that has accompanied further
monetary tightening around the world does pose a risk
to the Japanese economy, and many people remain concerned about the impact of factors such as inflation andsupply disruptions on economic activities. Against thisbackdrop, looking at international crude oil prices andforeign exchange rates, which influence the performanceof the INPEX Group, the price of Brent crude oil increased considerably to approximately 99 US dollars per

Representative Director,
President and CEO

barrel over the period due to factors including the Russia-Ukraine conflict. The average exchange rate stood at
131 Japanese yen against the US dollar due in part to theincrease in US interest rates, which represented a significant year-on-year depreciation in the Japanese yen.
The price of Brent crude oil, which started the period
at 78.98 US dollars per barrel, rose above 120 US dollars
in the first half of the year. This was due to economic
sanctions imposed on Russia primarily by the EU following Russia’s invasion of Ukraine in February and moves bymajor Western nations to ban imports of Russian crude
oil and natural gas. However, due to forecasts that the resurgence of COVID-19 in China and concerns that an
economic downturn primarily in the US and Europe andBusiness and Financial Overview

Takayuki Ueda

Management Foundation to Advance Growth Strategies

International crude oil prices rose sharply, and the Japanese yen
continued to weaken

Brent crude oil price/ Exchange rate
Crude oil priceExchange rate
(Yen/US$)(US$/bbl)

160

160

140

140

120

120

100

100

80

80

60

60

40

40

20

20

0

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

0

Note: Data for 2023 are through to the end of March.

10

INPEX CORPORATION Integrated Report 2022

INPEX CORPORATION Integrated Report 2022

11

Message from the President & CEO

Steady promotion of initiatives in the first year of the Medium-term
Business Plan

Note: Please refer to page 26 to 29 for more information on the Long-term
Strategy and Medium-term Business Plan 2022–2024 and page 34 to 49 forour initiatives in the oil and gas business and our 5 net zero businesses.

Continued safe and stable operations to achieve a record profit forthe second consecutive year
In fiscal 2022, crude oil and natural gas production operations in which the INPEX Group is involved, including

12

INPEX CORPORATION Integrated Report 2022

the Ichthys LNG Project, continued to proceed safely andstably for the most part worldwide. Also, external factors

Consolidated Financial Highlights
Net Sales(¥ billion)

2,324.6

Operating income

Ordinary income(¥ billion)(¥ billion)

Net income attributable toowners of parent
1,441.9(¥ billion)

1,246.4

461.0

1,244.3

2021/122022/122021/12

223.0

657.6

590.6

2022/122021/122022/122021/122022/12

FY2022 Net Production
Americas 2%

Japan 1%

8 thousand
BOE/day

3 thousand
BOE/day

Oil,
Condensate
and LPG
Middle East/
Africa390.3

thousand BOE/day

Asia/
Oceania

Americas 2%

45 thousand
BOE/day

Middle East/
Africa12%

Eurasia(Europe/NIS)

69%

16

Eurasia

Americas 1%%

64 thousand
BOE/day

271 thousand
BOE/day(Europe/NIS)
54 million
cf/dayNatural Gas

1,211.5
Asia/
Oceania87%

1,048 million
cf/daymillion cf/day(231.8 thousand BOE/
day)

Japan 3%

9 thousand
BOE/day

21 thousand
BOE/day43%

271 thousand
BOE/day

Oil and Gas Total

622.2

thousand BOE/day

9 million cf/day

4%

Business and Financial Overview

competitive and sustainable project aligned to the energy transition. Following discussions with the Indonesian
government on amending our revised plan of development (POD), we submitted an updated POD in April
2023. We are now working towards reaching a final investment decision (FID) in the latter half of the 2020s andstarting production in the early 2030s.
We are also making steady progress on initiatives relating to our 5 net zero businesses. In addition to reaching FID on our blue hydrogen and ammonia production
demonstration project in Niigata Prefecture, Japan, in
the renewable energy business we also acquired several
geothermal power generation projects in Indonesia andan offshore wind power generation project in Europe.
Regarding CCS, we won a joint bid with Total Energies
and Woodside Energy to acquire a GHG storage assessment permit off the northwestern coast of Australia forwhich we will continue to carry out evaluation and appraisal work. We aim to utilize this acreage to store GHG
emitted from the Ichthys LNG Project and are also considering developing the acreage into a future CCUS hub.
Regarding our methanation business, we are conducting
engineering, procurement and construction (EPC) workfor our demonstration plant as part of our aim to start
supplying e-methane through INPEX pipelines in fiscal
2025. Finally, in terms of forest conservation, we are working towards acquiring 1.5 million tons of carbon credits infiscal 2024.

also strengthened shareholder returns through sharebuybacks totaling approximately 120.0 billion Japanese
yen during the period, resulting in a total payout ratio of
44.1 percent.
Our net production volume (combining crude oil andnatural gas in barrels of oil equivalent) stood at approximately 622 thousand barrels per day in fiscal 2022. We intend to continue focusing on quantitative expansion
while strengthening our focus on qualitative growth, including a shift to natural gas. In addition, proved reserves(combined crude oil and natural gas reserves in barrels ofoil equivalent), a key source of our future earnings, now
amount to approximately 3.74 billion barrels.

Management Foundation to Advance Growth Strategies

Our INPEX Vision @2022 is divided into two major parts:
our Long-term Strategy towards 2030 and 2050 and our
Medium-term Business Plan 2022–2024. We are currently
implementing the basic policies guided by that Vision,
which involve continuing to make our upstream oil andnatural gas business thoroughly cleaner to fulfill our roleof ensuring the stable supply of energy, while also proactively engaging in our 5 net zero businesses. In fiscal
2022, the first year of the Medium-term Business Plan, we
steadily implemented initiatives in both our oil and gas
business and our 5 net zero businesses including (1) hydrogen and ammonia, (2) reduction of CO2 emissions
from oil and gas operations (CCUS), (3) renewable energy, (4) carbon recycling and new business opportunitiesand (5) forest conservation.
In the oil and gas business, we safely completed ourplanned shutdown maintenance at the INPEX Group’s
flagship Ichthys LNG Project in Australia on schedule andcontinued stable operations. As a result, we shipped 112
LNG cargoes over the year and the Ichthys LNG Projectcontributed 310.0 billion yen to INPEX’s net income attributable to owners of parent in fiscal 2022. In Abu Dhabi, we pursued our existing crude oil development andproduction plans at offshore and onshore oil fields andcontinued stable production, while also studying opportunities to further expand production capacity. We maintained stable production at various projects in Norway,
including the Snorre oil field. As part of our Abadi LNG
Project in Indonesia, we conducted a comprehensive
study on the introduction of CCS and other measures tomake the project cleaner and promote the project as a

had a positive influence on our performance, where
crude oil and natural gas sales prices increased and theJapanese yen depreciated. As a result of these developments, net sales for fiscal 2022 increased by 86.8 percent
year on year to 2,324.6 billion Japanese yen, operating
income increased by 111.0 percent to 1,246.4 billion Japanese yen and ordinary income expanded by 119.3 percent to 1,441.9 billion Japanese yen. Accordingly, net
income attributable to owners of parent increased by
106.7 percent to 461.0 billion Japanese yen. This was thesecond consecutive year in which INPEX posted a record
profit since the company’s integration in 2008.
We increased our annual dividend per share of common stock by 14 yen year on year to a record 62 yen. We

Growth Strategies for Value Creation

US dollar at one point. However, the interest rate differential between Japan and the US started to shrink towards the end of the year and the yen started toappreciate as concerns over inflation in the US diminished and the Bank of Japan decided to widen its targetband for long-term interest rates. As a result, the yearend exchange rate (TTM) decreased by 17.68 Japanese
yen year on year to 132.70 Japanese yen against the US
dollar. The average exchange rate for the Group’s net
sales during the period stood at 131.73 Japanese yen
against the US dollar, 21.62 Japanese yen lower than in
the previous year.

INPEX’s Vision and Value Creation

other factors would cause global crude oil demand toshrink, the Brent crude oil price declined, closing the fiscal year at 85.91 US dollars per barrel. The INPEX Group’s
average crude oil sales price rose 29.28 US dollars fromthe previous year to 97.71 US dollars per barrel.
Meanwhile, the exchange rate started the period at
the 115 Japanese yen level against the US dollar. The yen
subsequently depreciated to the 136 Japanese yen level
against the US dollar on the back of soaring resource
prices following Russia’s invasion of Ukraine and rising USinterest rates in the face of global inflationary pressures.
The continued divergence of US-Japan financial policies
in the second half resulted in a weaker yen, which further
depreciated to the 150 Japanese yen level against theJapan 8%101 million
cf/dayEurasia(Europe/NIS)

12%

74 thousand
BOE/day

Asia/
Oceania40%

247 thousand
BOE/day

INPEX CORPORATION Integrated Report 2022

13

Message from the President & CEO
INPEX’s Vision and Value Creation

Against this backdrop of dramatic change, the INPEXGroup is engaging in active dialogue with institutional
investors and other stakeholders, in Japan and othercountries, to share our outlook for the energy-related
business environment and to explain that INPEX’s strategic direction is in step with the changing environment.
We are pleased to see that our efforts are being

recognized and appreciated. The biggest challenge for
the INPEX Group going forward will be how to transform these changes in our environment into fresh business opportunities.

Growth Strategies for Value Creation

How to turn the changes in our business environment into business
opportunities

Our group vision in a changing business environment

Dramatic changes in the energy landscape for both Japan andthe world

14

INPEX CORPORATION Integrated Report 2022

worldwide in terms of volume and price), both of which
tend to conflict with decarbonization.
Second, the world is becoming increasingly aware of
the fact that both fossil fuels and new energy sources
including renewables will play a part in the energy transition process, and that natural gas and LNG in particular will play a central role in the process. These global
developments dovetail with the INPEX Group’s quest toaccelerate the expansion of its 5 net zero businesses toward 2050, to promote the shift to natural gas and to
pursue cleaner and more resilient upstream oil and natural gas operations, which make up our core business.
The third point relates to changes in the energy supply chain. Players are looking to construct or plan new
LNG liquefaction and export facilities and natural gas
pipelines in Europe, the United States, the Middle Eastand other parts of the world. In other words, global supply chains are being restructured in response to geopolitical risk.

Business and Financial Overview

The energy business environment is changing dramatically against the backdrop of the conflict between Russia
and Ukraine, climate change issues and other factors.
I believe there are three key points to these changes.
First, the challenge facing the world is shifting from arapid energy transition that simply seeks to eliminate
fossil fuels to finding a realistic solution to the energy
trilemma, namely the need to address the sometimes
conflicting issues of (1) energy security, (2) energy affordability that offers equitable access to affordable andclean energy and (3) energy sustainability through therealization of a sustainable global environment. In lightof advancing climate change, the need to develop initiatives for carbon neutrality (energy sustainability) remains as urgent as ever. However, given the increasingly
tight energy supply and rapid rise in energy prices, thechallenge facing the world today is how to realize energy transition while balancing energy security and energy
affordability (ensuring energy access for people

assessment permit for acreage off the northwestern
coast of Australia, which is a potential CCS site. We willproceed with evaluation and appraisal work with theaim of utilizing the acreage for CCS activities supporting the Ichthys LNG Project. We will also study and evaluate the possibility of the subsurface storage of residual
CO 2 generated by the blue hydrogen and ammonia
production demonstration project in Niigata Prefecture,
Japan. Both projects will enable us to gain extensive
knowledge of CCS and accelerate our net zero carbon
efforts.
The third point involves relating back to our Group’s
mission of providing a stable supply of energy as we
strive to stably produce key sources of conventional energy, namely crude oil and natural gas, and supply energy in ways that meet the needs of our customers moreclosely than ever. We will continue to champion the INPEX Value of “Safety Number One” and to achieve stable, accident-free production operations at each of our
projects. On the trading front, in 2022 we signed a 20year LNG offtake agreement for approximately 1 million
tons/year with Venture Global LNG of the United States
to expand our LNG supply capacity and diversify our
supply sources. For INPEX to be an even more reliable
partner for customers at critical moments, we will continue to build frameworks to help us fulfill our mission
to society of providing a stable supply of energy, evenwhen various factors combine to tighten the global
market.

Management Foundation to Advance Growth Strategies

Ichthys LNG Project LNG tanker

There are three key themes that we must pursue to turnthe industry’s changing environment into business
opportunities.
The first involves gaining a firm understanding ofmarket trends and needs. In other words, how to supply
optimal energy at the speed the market demands. Regarding LNG, which is widely considered as a form ofenergy supporting the transition, we are working tobuild a production framework at the Ichthys LNG Project that will enable us to stably increase capacity fromthe current 8.9 million tons per year to 9.3 million tons
per year. Over the long term, we will accelerate our participation in exploration activities in the vicinity of theIchthys Field as well as the development of discovered
but undeveloped assets to further ensure a sustained
production volume, and then aim to further expand
production volume visualizing the expansion of Ichthys
in around 2030. With regard to hydrogen and ammonia,
it is important to fully understand when future demandis likely to develop and what action needs to be taken
now. Naturally, we do not want to fall behind other companies, so it is important to constantly monitor market
trends and identify future demand.
The second point relates to our CCS initiatives, which
form part of our net zero commitment. Currently, there
is a general global consensus that CCS is a realistic
technology that can help achieve both net zero carbon
emissions and a stable energy supply. We believe CCS
could prove to be a game changer in energy transformation, and INPEX is aiming to become a leading company in this field. INPEX has been granted a GHG

Technological capabilities are key
Technological capabilities are key when it comes toachieving energy transformation and aiming for sustainable growth. In the past, our technology development
focused on integrating the world’s various existing technologies and linking them to our operations. Today, weare very much aware of the need to focus on researchingand developing previously unexplored technologies in
net zero and other fields. In April 2022, we establishedthe INPEX Research Hub for Energy Transformation, or

I-RHEX for short, within our Technology Division’s Technical Research Center as part of our initiative to establish
fundamental research facilities to help achieve a net zerocarbon society. We intend to grow I-RHEX as an open
platform for R&D applying oil and natural gas development technologies to clean energy technologies and thedevelopment of advanced technologies, such as CCUS
and low-cost hydrogen production. We want I-RHEX tocontribute to society’s energy transformation by

INPEX CORPORATION Integrated Report 2022

15

Message from the President & CEO

digital energy company, so that we can create and provide fresh added value to stakeholders in Japan and other countries.

Company’s basic policy is to maintain stable dividends,
while also strengthening shareholder returns in line withgrowth in financial performance through share buybacks
and other means after considering the business environment, our financial base, management conditions
and other factors. Based on the above policy, INPEX
plans to increase the annual dividend per share of common stock by 2 yen to 64 yen in fiscal 2023. We will continue to offer appropriate dividends based on ourshareholder returns policy, the underlying business environment and other factors.

The INPEX Group’s Sustainability Principles outline ourmain principles for conducting business, including thestable supply of clean energy, efforts to engage in energy transformation, thorough safety management for all
personnel associated with INPEX business operations
and compliance with laws and regulations. We placeparticular importance on health, safety and the environment (HSE) because of the nature of our business, inwhich stable operations based on the “Safety Number
One” principle enhance the sustainability of our company. We recognize the importance of creating a corporate culture that can generate further innovation in achanging environment. As such, the whole Group strives
to become the most rewarding place to work by expanding the job-focused HR system and career-development support as well as working from home, flextime
work and other systems. Our officers and employees areworking together to steadily resolve issues with regards
to various management themes, such as further
strengthening our financial base and ensuring thoroughcompliance.

To epitomize our namesake commitment to serve asan Innovative Pioneer of Energy Transformation (EX),INPEX seeks to fulfill its commitment to society by ensuring the stable and efficient supply of essential energy in increasingly clean forms. We also strive to play aleading role in the supply of energy, from oil and natural gas to hydrogen and renewable energy, in any era,
and we are determined to continue to serve as a leading energy provider. In the second year of the current
Medium-term Business Plan, we will seek to further
strengthen our business frameworks to build a value
chain in our 5 net zero businesses as well as in the oiland gas business. The INPEX Group will continue towork together to achieve the INPEX Vision @2022.
I would like to ask for the continued support of all our
stakeholders as we undertake this important challenge.

Management Foundation to Advance Growth Strategies

Assuming a crude oil price average of 80.00 US dollars
per barrel (down 19 US dollars year on year) and an exchange rate average of 130 Japanese yen against the US
dollar for the full year (appreciation of roughly 1 yen), we
expect to generate net sales of 1,994.0 billion Japaneseyen, a net income attributable to owners of parent of
300.0 billion yen and cash flow from operations before
exploration of approximately 860.0 billion yen in fiscal
2023.
Regarding shareholder returns, under the Medium-term Business Plan 2022–2024, we are targeting a
total payout ratio of 40 percent or greater and setting aminimum annual dividend per share of 30 yen. The

Ensuring that INPEX continues to maintain a leading role in any era

Growth Strategies for Value Creation

Consolidated forecasts for fiscal 2023 (based on as of May 10, 2023 earnings report)

INPEX’s Vision and Value Creationcooperating and forming alliances with a wide range ofcompanies, universities, research institutes and other organizations. We will also promote the use of digital technology and establish the appropriate foundations for a

Achieving sustainable growth

Coexisting with local communities

16

INPEX CORPORATION Integrated Report 2022

The INPEX Group also pursues various support activities to promote harmony with local communities in Japan and other countries. In recent years, we have madea cumulative donation equivalent to three million US
dollars in humanitarian assistance for Ukraine via theJapanese Red Cross Society. We also provided a total of
one million Australian dollars in relief funds to help alleviate large-scale flood damage caused by cyclones inWestern Australia and the Northern Territory, dispatchedhelicopters to rescue victims and matched donations
made by employees. We also contributed relief funds
for the 2023 Turkey-Syria earthquakes. The INPEX Groupwill strive to do everything in its power in times of emergency to build bonds of trust with local communities.

Business and Financial Overview

The INPEX Group has positioned the five regions ofAustralia, Abu Dhabi, Southeast Asia, Japan and Europe
as core business areas and is seeking to concentrate its
management resources in these areas to improve business efficiency. We believe the ability to operatesmoothly in each area does not depend simply on the
pursuit of business efficiency, but more precisely on
having local communities recognize and appreciate thevalues that INPEX offers and obtaining a social license
to operate. To mark the 50th anniversary of our subsidiary Japan Oil Development Co., Ltd. (JODCO), we held
our Board of Directors meeting in Abu Dhabi in January
2023. This was only the second time that an INPEX
board meeting has been held outside Japan following asimilar meeting in Darwin, Australia in 2019. These initiatives present a great opportunity to promote mutual
understanding by conveying the INPEX Group’s stanceto local governments and other organizations and enabling our outside directors and others to learn about
local initiatives.

INPEX CORPORATION Integrated Report 2022

17

Financial and Operating Highlights (Five-Year Comparative Graphs)

Profitability Indices

INPEX’s Vision and Value Creation

INPEX has changed its fiscal year-end from March 31 to December 31, effective from fiscal 2019.
The fiscal year ended December 31, 2019 is a transitional, nine-month accounting period from April 1, 2019 to December 31, 2019.

Reserve/Production Indices

Net Sales

Net Income (Loss) Attributable to Owners of Parent

Crude oil (¥ billion)
Natural gas (¥ billion)
Other (¥ billion)

Net income (loss) attributable to owners of parent (¥ billion)

Net Proved Reserves3

Net Production (barrels of oil equivalents)

Crude oil (Million BOE)
Natural gas (Million BOE)

Crude oil (Thousand boed)
Natural gas (Thousand boed)

2,324.6

20.8

461.0

525.1

3,857

933.7

15.3
208.1

971.3

18.5
320.5

12.8
771.0
223.0
14.9

17.9
170.7

1,778.6

250.5
710.2

2018/3

782.6

2019/3764.0

2019/12

1,030

40.3

96.1

586

3,738

3,645

878

941

450
121

123.5
2,747

2,864

2,974

2,700

2,704

329

573

584

622
232

234

242

241

352

331

344

2019/122020/122021/12

424
121

2,860

905.1

505.5

2020/12

3,730

1,112

223.0

1,244.3
1,000.0

1,146

4,086

Growth Strategies for Value Creation

1,110

4,010

303

390

(111.6)2021/122022/122018/3

2019/3

2019/122020/122021/122022/12

Cash Flow from Operations

2018/3

2019/3

2019/122020/122021/122022/12

Average Production Cost per BOE Produced

2019/32022/12

Exploration and Development Cost per BOE (3-year average)

Average production cost per BOE produced (Excluding royalty)(US$/BOE)4

Exploration and development cost per BOE (3-year average)(US$/BOE)5

Management Foundation to Advance Growth Strategies

Cash flow from operations (¥ billion)
Cash flow from operations before exploration investments(including Ichthys downstream IJV) (¥ billion)1

2018/3

1,061.6
22.9
751.2

349.2
278.5

2018/3

238.5

2019/3

274.7

18.1

16.4

586.8

445.4

5.9

5.7

5.3

5.2

5.4

5.8

2018/3

2019/3

2019/122020/122021/122022/12

7.7

8.4

2018/3

2019/37.1

292.9
2019/122020/122021/122022/122019/122020/122021/122022/12Business and Financial Overview

Stability Indices
Net Assets Excluding Non-Controlling Interests, Equity Ratio
Net assets excluding non-controlling interests (¥ billion)
Equity ratio (%)

Net D/E Ratio
Net D/E ratio (based on institutional accounting practices) (%)
Net D/E ratio (including Ichthys downstream IJV) (%)2

3,760.8
2,916.6 3,006.4 3,040.7
68.6

62.7

62.7

3,124.0

75.8

2,736.5
59.0

65.1
60.6

46.0

60.1
30.0

31.0

2019/3

2019/12

38.4

31.3

25.6

14.5

2018/318

2019/3

2019/122020/12INPEX CORPORATION Integrated Report 2022

2021/122022/122018/32020/122021/122022/12

Notes:
1. Cash flow from operations before exploration investments includes Ichthys downstream Incorporated Joint Venture (Ichthys LNG Pty Ltd) and differsfrom institutional accounting basis. Data after FY2020/12 is disclosed.
2. Net D/E ratio (including Ichthys downstream IJV) includes Ichthys downstream IJV (Ichthys LNG Pty Ltd) and differs from figures based on institutional
accounting practices. Data after FY2020/12 is disclosed.
3. The proved reserves are evaluated in accordance with SEC regulations. The reserves cover most of INPEX group projects including the equity-method
affiliates. The reserves of projects which are expected to be invested a large amount and affect the Group’s future result materially are evaluated by DeGolyer & MacNaughton, and the others are done internally.
4. Average expenses per BOE produced is the production cost per barrel of oil equivalent produced during the year.
5. Exploration and development cost per BOE is calculated by dividing the sum of exploration and development costs and interest acquisition costs by
the increase in proved reserves.

INPEX CORPORATION Integrated Report 2022

19

Financial and Operating Highlights
INPEX’s Vision and Value Creation

Performance Indices
Share Price

Total Shareholder Return (TSR)

Year-end share price (Tokyo Stock Exchange closing price) (Yen)

Total Dividends, Total Share Buybacks,
Total Payout Ratio, Payout Ratio

Cash Dividend per Share (DPS)TSR (%)6
TOPIX (including dividends) (%)

Cash dividend per share (2nd quarter end) (Yen)
Cash dividend per share (Fiscal year-end) (Yen)

Total dividends (¥ billion)
Total share buybacks (¥ billion)
Total payout ratio (%)11
Payout ratio (%)

62
146.0

1,396

1,316
1,136.5

1,002

110.0

115.9

1,055.5

100.3

120.6
110.4

2019/3

2019/122020/122022/12

Earnings (Loss) per Share (EPS)

2018/3

2019/3

2019/122020/122021/122022/12

31.2
12

30
20

9

9

12

12

2018/3

2019/3

2019/122020/122021/122022/1226.3

2018/335.0

2019/343.8

35.0

2019/122020/12153.87

1,997.24 2,058.95 2,082.43

84.61

Return on Equity (ROE)

2020/122022/12

ROA (%)13

2,253.17

8.1
13.5

1,874.08

1.4(76.50)2019/122021/1218.4

Return on Assets (ROA)

ROE (%)12

4.6

7.6

2019/368.0

83.4

2021/122022/122018/3

2019/3

2019/122020/122021/12

3.2

2.1

4.1

2.6

0.9

2022/12

(3.9)

(2.4)

Price Book-Value Ratio (PBR)

PER (Times)9

PBR (Times)10

2018/3

2019/3

2019/122020/122021/122022/122018/3

2019/3

2019/122020/122021/12Business and Financial Overview

Price Earnings Ratio (PER)

Management Foundation to Advance Growth Strategies

2,879.68

2018/344.1

35.5

Efficiency Indices

BPS (Yen/share)8337.37

27.64

18
9

70.0

36.5

24
15

120.0

61.9

28

30
18

138.0

65.1

Book Value per Share (BPS)

EPS (Yen/share)7

65.81

32

104.7

59.6

2021/12

48

142.5

24

556

2018/3146.4

Growth Strategies for Value Creation

121.9

129.5

203.4

2022/12

47.6

0.7
16.0

0.5
13.4

0.3
6.5

2018/320

2019/30.5

2019/122020/12INPEX CORPORATION Integrated Report 2022

2021/12

0.4

0.5

4.1
2022/122018/3

2019/3

2019/122020/122021/122022/12

Notes:
6. Total shareholder return (TSR) is the return on the closing price of our common stock on the First Section of the Tokyo Stock Exchange in FY2017/3.
7. Earnings (loss) per share (EPS) are calculated by dividing the net income (loss) attributable to owners of parent by the average number of shares during
the year.
8. Book value per share (BPS) is calculated by dividing the year-end net assets (excluding year-end non-controlling interests and year-end net assets related to Class A stock) by the year-end number of common shares outstanding (excluding the year-end number of treasury shares).
9. Price earnings ratio (PER) is calculated by dividing the year-end share price by earnings (loss) per share. No price earnings ratio (PER) is shown for
FY2020/12, as a net loss was recorded in this year.
10. Price book-value ratio (PBR) is calculated by dividing the year-end share price by the book value per share.
11. Total payout ratio has been disclosed since FY2021/12. No payout ratio is shown for FY2020/12, as a net loss was recorded in this year.
12. Return on equity (ROE) is calculated by dividing the net income (loss) attributable to owners of parent by the average of net assets excluding non-controlling interests at the beginning and end of the year.
13. Return on assets (ROA) is calculated by dividing the net income (loss) attributable to owners of parent by the average of total assets at the beginningand end of the year.

INPEX CORPORATION Integrated Report 2022

21

Sustainability Highlights

Please refer to our Sustainability Report 2022 for more information about our ESG performance data.

Environment

https://www.sustainability-report.inpex.co.jp/fy2022/en/

Society

Greenhouse Gas Emissions

Net Carbon Intensity

LTIR, TRIR

Social Investment

Scope 1 emissions (thousand tons-CO2e)
Scope 2 emissions (thousand tons-CO2e)
Boundary: Equity share1

Net carbon intensity (kg-CO2e/BOE)
Boundary: Equity share1

LTIR
TRIR
Boundary: Operational control2

Social investment (million JPY)
Boundary: Consolidated

8,557

7,328

7,302

6,839

148

136

69

2019/122020/122021/122022/12• Scope 1 emissions are direct emissions from sources that the Company owns
or controls. Scope 2 emissions are indirect emissions associated with the electricity, steam, heat, and cooling that the Company purchases and consumes.

2.90

41
35

2019/1233

2020/122021/12

2.24

1.78
28
2022/12• Net carbon intensity includes offsets. Intensity indicates the volume of GHG

emitted per unit of consolidated production of oil and natural gas (converted
to calorific values).

2.54

0.32

0.26

0.38

0.27

2019/122020/122021/122022/12

2,239

2,196

2019/122020/12

3,045
2,013

2021/12per million hours worked.

• T RIR (Total Recordable Injury Rate): Rate of total fatalities, lost work day cases, restricted work day cases, and medical treatment cases per million hours worked.

Freshwater Consumption

Number of Employees by Gender

Training Cost per Employee

Methane emissions intensity (%)
Boundary: Operational control2

Domestic freshwater consumption (m3)Overseas freshwater consumption (m3)
Boundary: Operational control2

Male (persons)Female (persons)Boundary: Consolidated

Training Cost per Employee (JPY)Boundary: Unconsolidated + Australia

0.07

2020/122021/122022/12

1,637,999

652,263642,241

1,111,606

2019/122,257,038

1,023,389

1,200,485

995,758

1,187,815

1,056,553

2020/122021/122022/12

3,117

3,163

3,189

3,364

554

609

611

667

2,563

2,554

2,578

2,697

2019/122020/122021/122022/12206,294

206,092

196,085

2019/122020/122021/12281,216

Management Foundation to Advance Growth Strategies

0.04

0.05

2,211,204

1,763,869

2022/12• L TIF (Lost Time Injury Frequency): Rate of injury resulting in fatalities or lost time

Methane Emissions Intensity
0.10

Growth Strategies for Value Creation

204

2019/12INPEX’s Vision and Value Creation

Sustainability Report

2022/12• A ustralia, which is included in the boundary, refers to the employees ofsubsidiaries in Australia.

Oil Spills

VOC/NOx/SOx Emissions to the Atmosphere

Unconsolidated Staff Turnover Rate

Quantity of spills (bbl)
Number of spills (cases)
Boundary: Operational control2

Emissions (tons)
VOC
NOx
Boundary: Operational control2

Unconsolidated staff turnover rate (%)
Boundary: Unconsolidated

SOx

814
5

4
1 0.0636
2019/122020/122021/12

4,160
1,594

3,571
0 0.0
2022/12

2.65

9,362

8,260

422
2019/122020/12

5,867
4,297
3,984
3,987
2,322
1,008
2021/122022/12• Domestic VOC emissions are calculated using the “PRTR Release and Transfer

2019/122020/12INPEX CORPORATION Integrated Report 2022

CDP Climate
Change2022 score:A-

MSCI Japan ESG Select Leaders
Indexes

THE INCLUSION OF INPEX CORPORATION (INPEX) IN ANY MSCI INDEX,AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR
INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF INPEX BY MSCI OR ANY OF ITS
AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF
MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE
TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Selected as“Yearbook
Member” in the
S&P Global
SustainabilityAward 2023

2022/12

14

6

97.6

14

39

2019/4-2020/3

24 26

29 36

2020/4-2021/3

2021/4-2022/3

38

16

2022/4-2023/3

Number of Audit & Supervisory Board Members

6

43

43

8

8

2020/3100•T he data is a cumulative number. From 2022, the data represents the number offirst-time acquirers during the year in line with the method used to calculate theacquisition rate.
• T he rate of employees returning to work is calculated by dividing the number of
employees who have returned by the number expected to return for each fiscal
year, multiplied by 100.

Directors (inside)
Directors (outside)
Percentage of female directors (%)
Percentage of outside directors (%)
Boundary: Consolidated

7
Special award as an Environmentally
Sustainable Company
in the Ministry of
the Environment’s
ESG Finance AwardJapan

2021/12 alculated based on the number of voluntary resignees.
•C

Number of Directors

S&P/JPX
CarbonEfficient Index

22

26

INPEX has engaged in active dialogue with stakeholders through information disclosure and responded to external
evaluations by third-party. The evaluations by external organizations and the major ESG Indexes for which INPEX has
been selected as a component stock are shown below.
MSCI ESG Leaders Indexes

97.5

Female employees taking parental leave (persons)

92.7

Governance

FTSE Blossom
Japan,FTSE Blossom
Japan Sector
Index

2.75

1.58

External Evaluation

FTSE4Good
Developed
Index,
FTSE4Good
Japan Index

2.25

Male employees taking parental leave (persons)
Percentage of those returning to work (%)
Boundary: Unconsolidated

Business and Financial Overview

Calculation Manual for Oil Refineries and Oil Storage Depots, etc.” publishedby the Petroleum Association of Japan. Overseas VOC emissions are calculated in accordance with the laws and regulations of each country.

Number and Percentage of Employees Taking advantage
of Parental Leave System by Gender

7

2021/3

12 42
5
7

8

2022/3

12

Audit & Supervisory Board members (inside)
Audit & Supervisory Board members (outside)
Percentage of female Audit & Supervisory Board members (%)
Percentage of outside Audit & Supervisory Board members (%)
Boundary: Consolidated

5

5

5

5

80

80

80

4

4

4

4

8

20

20

20

20

1

1

1

1

2023/32020/32021/32022/32023/3

42

5
7

80

• T he number of Directors and Audit & Supervisory Board Members is for those elected at the ordinary general meeting of shareholders held in March of each year.
Notes:
1. The total amount of emissions corresponding to the net economic share of each production project.
2. These data are reported on an operational control basis, including headquarters, Technical Research Center, overseas offices and operational organizations in Japan and overseas.

INPEX CORPORATION Integrated Report 2022

23

Growth Strategies for Value Creation

INPEX Strengths

1

Stable energy supply to Japan and theworld through our global business portfolio

2

Exceptional technological capabilities andR&D structure for achieving net zero carbon

3

Climate Change

of Japan’s annual
energy consumption

Human Capital

Human Capital

Governance

By product622

21 thousandbarrels per day

12%74
thousandbarrels
per day

By region

Americas2%

9 thousandbarrels perday

thousand Asia,
barrels Oceania 40% Middle East,
thousandAfrica 43%
per day 247
barrels per day
390 thousand barrels per day
271 thousand
Crude oil, condensate,
LPG 63%

Related pages
Centaralize Business Portfolio
by Setting Core Business Areas
See page 36
Project Overview byCore Business Areas
See page 38

barrels per day

R&D activity
expenses

Number of partnerships withindustry, academia, and government

R&D employees attached toTechnical Research Center(Results for the fiscal year
ended December 31, 2022)(Fiscal year ended December 31,
2022, cumulative)(As of December 31, 2022)¥1.91 billion

Approx.

Number of Group
employees(Results for the fiscal year ended
December 31, 2022)

3,364

40

Initiatives towards
Stronger Management
Foundation

38 employees

See page 32

Diverse human resource composition

Related pages(As of December 31, 2022)

Percentage of female
employees in the entire
Group, including overseas
Percentage of foreign
employees in the entire
Group, including overseas

19.8% (667
Approx. 39.9% (1,343

employees)

Approx.

Related pages

people)Sustainability Featured
Content 1
Human Resources
Strategy
See page 56

Related pages

Strong financial position and rising cash flow
We generate stable and solid revenues and cash flow through the stable operation of
Ichthys and other domestic and international projects. We appropriately control our financial balance by constantly monitoring outstanding borrowings, investments and returns to build a resilient financial base that can withstand a low-oil-price environment.

10

232
thousandbarrels
per day

Local Communities

Global human resources with diverse values
To sustain and strengthen responsible management as a global company, we believe it
is important to diversify our workforce and develop human resources that can shareglobal values.
To achieve this aim, we promote a range of HR policies from a global perspective
and maximize organizational performance by ensuring the diversity of our talent pool.

37%%

Climate Change

for fiscal year ended
December 31, 2022

Naturalgas

aboutJapan 3%

Net production volume Eurasia

Governance

Net D/E ratio

Cash flow from operations before exploration(Result for the fiscal year ended December 31, 2022)(Result for the fiscal year ended December 31, 2022)

46%

Including Ichthys downstream IJV¥1,061.6

billionIncluding Ichthys downstream IJV

Message from Senior Vice Presidentof Corporate Strategy & Planning

Business and Financial Overview

4

Production
equivalent toManagement Foundation to Advance Growth Strategies

INPEX Research Hub for Energy Transformation (I-RHEX) was established in the TechnicalResearch Center to promote research and development with the aim of diverting and applying oil and gas business technologies to clean energy technologies, as well as to acquire advanced technologies in the CCS/CCUS, hydrogen and other businesses.

Relevant material
sustainability
issuesGrowth Strategies for Value Creation

We produce oil and natural gas on a daily basis in countries around the world on ascale equivalent to approximately 10% of Japan’s annual energy consumption. This
production volume is the largest among Japanese companies, and, internationally,
is second only to the output of major oil companies, so we play a part in ensuring astable supply.

INPEX’s Vision and Value Creation

Leveraging our strengths, we will promote both our oil and gas business and 5 net zerobusinesses, while pursuing synergies between the two.

See page 30
Message from the Senior Vice
President, Finance & Accounting
See page 80

5Close partnerships with gas- and oil-producing
nations and support from the Japanese government
We have built long-term relationships with governments and other stakeholders in various countries, and we will pursue synergies by leveraging this network for our 5 net
zero businesses as well. We use financial support from JOGMEC, JBIC, NEXI and otherorganizations to promote oil and natural gas upstream projects. We also help develop
policy frameworks and provide other assistance for the sectors of our 5 net zero businesses and promote the prompt and efficient development of those businesses by utilizing subsidies from NEDO, JOGMEC and others in an appropriate manner.

24

Related pages

INPEX CORPORATION Integrated Report 2022

Centaralize Business Portfolio
by Setting Core Business Areas
Local Communities

See page 36
Project Overview byCore Business Areas
See page 38

Climate Change

Board meeting held in
Abu Dhabi
See page 73

INPEX CORPORATION Integrated Report 2022

25

INPEX Vision @2022

Vision for 2030 and 2050

Basic management policy
towards a net zero carbon
society by 2050

We are committed to transforming net zero carbon from an aspiration to reality by 2030, and then on toward a net zero carbon society by 2050. Oil and natural gas being an essential energy source for economic and social activities, we will work toensure their stable supply. Natural gas, for which demand is expected to be strong, especially in Asia, is a business that will
be strengthened and expanded as a revenue base while moving to thoroughly make it cleaner through the introduction of
CCUS and other measures. In the 5 net zero businesses, we will aim to achieve commercialization and establish a strong
position.

Medium-term Business Plan

Revenue

Adequateshareholder
returns

Approx.
trillion

Achievecommercializationand establish
a strong position(Maximize use ofgovernment support
and collaboration
with industry,
academia andgovernment, etc.)

Kashiwazaki
demonstration
project, etc.

CCUS

6Kt/year
Renewable power
generating capacity

Renewableenergy500MW
Domestic technology
development
business

Methanation

400Nm3/hApprox.
400 times

Approx.

2–4 times

Approx.
25 times

Approx.

¥3.8–4.4

REDD+ project3

trillion

Including¥0.7–1
trillionfor 5 netzero
businesses

Forestconservation

Oil & gasbusiness
Maintain andexpand stablesupplyStrengthen andexpand the businessas a revenue basewhile making it
cleaner throughCCUS, etc.

Project
participation

INPEX CORPORATION Integrated Report 2022

Scale upMonetization
as CCUSbusiness

Scale up

Futureproduction ofgreenhydrogen2

1

CO2 injection

2.5MMt per year
Renewable power
generating capacity

1–2GW

Around 2035

Production business scale

10

K Nm3 /h(60Kt/year)

Carbon credit
acquisition

2MMt per year

Expansion

Production
businessscale 60K Nm3/h(360Kt/year)

Expandedsustainable
forestExpansionconservation
business

GHG intensity reduction by
GHG intensity
reduction by

10% or more
Oil & gas

Investment ratio
for gas businessApprox. 50%

30% or more

Making thebusiness cleaner(vs. 2019)

Investment ratio
for gas businessApprox.

Gas shift70%

Reinforced trading functions4

LNG handling volume
Approx.

All figures based on INPEX equity portion

1: Ammonia volume shown in hydrogen equivalent
2: Hydrogen that is produced by splitting water using electricity generated from renewable energy
3: Concept defined at the 2010 United Nations Climate Change Conference that augments REDD (Reducing Emissions from Deforestation and forest Degradation) withthe active prevention of forest degradation through forest management and enhancement of carbon stocks through forestation.

26

100Kt/year

Scale up

Supply ofapprox. 10%of domestic
demand10

MMt

Sustained
efforts

Expandedstable supply
of clean oil &gas

Maintain stable energy supply
on the basis of thoroughly
making the business cleaner

Promoteinvestment
for sustainablegrowth

1.5MMtCommercialization of
3 or more projects

2050
Challenge fornet zero

Be a company
rich in vitality,
creativity anddiversity, capableof sustainable
development

Business and Financial Overview¥5–6

Investment
for growth

5 net zerobusinesses

700t/year

Approx.
150 times

Management Foundation to Advance Growth Strategies

Shareholder
returns

HydrogenAmmonia

Kashiwazaki
demonstration
project

Expand each business at anaccelerated pace and become
recognized as a credible key player

Maintaina strong
financial
position

CF from
operations
beforeexploration

Around 10% of operating CF5

Expenditure

Debt
reduction

2050

Around 2030

Growth Strategies for Value Creation

Estimated cash
allocation 2022–
2030 (9 years)

As a pioneer in energy
transformation (EX), INPEX
will provide a stable supply of
diverse and clean energy
sources including oil andnatural gas, hydrogen andrenewable power.

4: Inclusive of midstream and downstream business, etc.
5: Operating Cash flow before exploration (including Ichthys LNG Pty Ltd, the Ichthys Downstream Incorporated Joint Venture). Cash flow from renewable energy business is estimatedbased on equity operating cash flow.

INPEX CORPORATION Integrated Report 2022

INPEX’s Vision and Value Creation

Long-term Strategy

27

INPEX Vision @2022

Milestones by Core Business Area

Positioning and Targets of Medium-term Business Plan 2022–2024

We have identified Australia, Abu Dhabi, Southeast Asia, Japan, and Europe as our five core business areas and willcommit to ensure a stable supply of energy and to make our business more resilient and cleaner.

INPEX Vision @2022 consists of two parts: the Long-term Strategy and the Medium-term Business Plan 2022–2024.
The Long-term Strategy outlines our basic policy toward a net zero carbon society in 2050, as well as our “Vision foraround 2030,” which will be an important milestone toward 2050, and the specific measures we will take to get there.
The Medium-term Business Plan 2022–2024 spells out the specific policies and indicators for this initial three-year period, which will be an important first step toward realizing our vision for where we want to be around 2030.

We will accelerate our efforts over the three-year period of the Medium-term Business Plan 2022–2024 to realize the vision of the Company around 2030, which is set forth in our Long-term Strategy.

Gaining momentum toward realizing our
Vision for around 2030
5 net zero businesses
Oil and gas business teadfastly implementSdemonstration and research
activities
Prepare for full-scale
investment

Vision 2040/Medium-term Business Plan 2018–2022

New business/Renewable energy business

80.00

60

70

130.00110

110

Income attributable to owners of parent (JPY)

223.0 billion

461.0 billion

300.0 billion

170.0 billion

240.0 billion

Management CF from operations before exploration*1 (JPY)targets
ROE

586.8 billion

1,061.6 billion

Around 860.0 billion

600.0 billion

700.0 billion

Around 8%

Around 6.0%

Around 8.0%

50% or less

50% or less

Production cost per barrel, excl. royalties
Net carbon intensity2
Safety

13.5%

65%

46%

Around 35%

584 thousand barrels

622 thousand barrels

633 thousand barrels

Level exceeding 700 thousand boed

USD 5.4/barrel

USD 5.8/barrel

USD 5.7/barrel

Reduction towards USD 5.0/barrel

33 kg/BOE

28 kg/BOE (provisional)

Reduction by at least
two-thirds of fiscal
2024 target

Reduction of 10% (4.1 kg/BOE) or more overa 3-year period toward 2030 target3

Zero major accidents

Zero major accidents

Zero major accidents

Zero major accidents4

Shareholder Returns
 trengthen shareholder returns in line with growth in financial performance,
S
while maintaining the basis for stable dividends
Aim for a total payout ratio of 40% or greater	Implement share buybacks based on business environment, financial position andmanagement conditions, etc.
	Set minimum annual dividend per share of 30 Japanese yen even in case of shortterm deterioration of business environment, etc.
INPEX CORPORATION Integrated Report 2022

Level of returns

1. Includes Ichthys downstream IJV and differs from cash flows based on institutional accounting practices
2. Net carbon intensity = (equity share emissions volume (Scope 1+2) − offset)/(net production volume of upstream oil and gas business + power generation volume of renewable energy business)
3. 2030 target: reduction of 30% or more in net carbon intensity from 2019 level (41.1kg/BOE)
4. Major accidents: fatalities, major leakages, serious injuries in operator business

28

Clean ammonia and hydrogen business

Verify GHG emissions from ADNOC’s ammonia production business/ Pursue clean hydrogen and ammonia business opportunities

Total payout
ratio of 40%
or greater

30 JPY

minimum
dividend

Level of net profit

Southeast Asia

Submitted updated plan of development to Indonesian
government for introduction of CCS, aim to obtainapproval in 2023

Gas exploration and asset acquisition
Establish an Asian gas value chain

Promote exploration and M&A activities in Vietnam, Malaysia, etc. to acquire additional natural gas resources in Asia

Promote demand creation centered on trading and midstream and downstream investment
Tangguh CCUS
Plan to implement EPC following FID on CCUS project

Strengthen supply resilience
Complete the 5th stage extension of the Shin Tokyo
Line in the domestic gas pipeline network to enhance
the resilience of the domestic supply system by 2024
Reduce cost and improve technical capabilities by centralizing plants and conducting in-house maintenance, improve
plant reliability through suitable management

Drilling off the coasts of Shimane and Yamaguchi Prefectures and in the northernarea around Minami-Nagaoka gas field
Improve resistance to low oil prices throughenhanced operational efficiency

Promote hydrogen and CCUS site
demonstrations and commercialization

Promote hydrogen and CCUS site
demonstrations and commercialization

Commence CO2 injection tests
Establish CO2EOR efficiency improvement
technology to expand CCUS technology in Japanand deploy EOR technology at overseas oil fields

Construct blue hydrogen and ammonia production
demonstration plant in Kashiwazaki City, Niigata
Prefecture, and aim to commence operations in 2025

Take measures at production sites to make operations cleaner
Conduct methanation site demonstrations

Save energy consumption, introduce carbon neutral power, implement zero flare measures, etc.

 ommence methanation production at Minami-Nagaoka in fiscal 2025, supply synthetic methane using INPEX’s natural gas trunkCpipeline networkS ecure stable revenue using the newly acquired Norwegian assets as a platform, promote the development of nearby discovered but undeveloped assets and pursue
exploration opportunities in the vicinity

NorwayHywind Tampen offshore wind farmCommence power generation
Wisting Oil Field
Introduce the use of onshore hydroelectric powerin the development plan
Deepen knowledge of clean energy
technologies

Sharebuybacks

DividendsC ollaborate with governments and concerned parties on the selection of prospective CCS locations and development oflegal frameworks/ Invest in fuel switching and new fuel businesses to promote energy transition in Asian countries (naturalgas, hydrogen and ammonia, biofuels, etc.)

Conduct gas exploration to supplement reserves

Europe99.00
131.60Businesstargets

Make existing production assets cleaner

Business and Financial Overview

70.95
109.90Net D/E ratio

At Onshore Block 4, work to assess the successful appraisal wells and proceed to commence production at an early stage
 ake operations cleaner in cooperation with ADNOC by supplying offshore facilities with clean power from onshore,M
etc./ In cooperation with ADNOC, increase CCUS capacity of Abu Dhabi Onshore Concession from the current 0.8
million tons per year

Japan

Fiscal 2024
(Target)Exchange rate (JPY/USD)

Net production volume (barrels of oil
equivalent per day)

Existing exploration and development assets

Create clean energy business opportunities

Kashagan

OthersFiscal 2022
(Actual)Fiscal 2023
(Financial Forecasts)(as of May 10, 2023 earnings report)

Brent crude oil price (USD/barrel)

1

Increase production capacity across all producing assets including Abu Dhabi Onshore Concession (to 2MM BD), Upper Zakum (to 1MM BD), Lower Zakum (to 450K BD) and Satah/
In addition to increasing production capacity at Abu Dhabi Onshore Concession (to 2 MM BD), Upper Zakum (to 1MM BD), Lower Zakum (to 450K BD) and Satah/Umm Al-Dalkh (to 45K
BD), further production increases are being considered/ Further reduce production cost by optimizing personnel allocation and introducing new technologies (AI, DX, etc.)

Management Foundation to Advance Growth StrategiesIn the fiscal year ended December 31, 2022 (fiscal 2022), we continued stable operations at Ichthys, worked to increase production capacity in Abu Dhabi and sold some upstream business assets to optimize our portfolio. In addition, we acquired a geothermal power generation project in Indonesia and offshore wind power generation projects,
etc. in Europe, and won a bid for a CCS permit in Australia. Through these and other projects, we pressed ahead
with energy transition initiatives and made steady progress towards achieving our management targets.
In fiscal 2023, in addition to our oil and gas business, we will consider how to build a value chain in our 5 net zerobusinesses and seek to further strengthen our business structure as we strive to achieve INPEX Vision @2022.

7.6%

Introduce measures to minimize flaring during production and fuel gas consumption and promote low-carbon operations

Proactively participate in Australian renewable energy businesses/ Promote clean hydrogen projects

Abadi, Indonesia

 uild a strong financial position to prepareB
for future investments and risks and improvestakeholder returns
Strengthen R&D and reinforce organizational
structure, etc.

Fiscal Year Ended December 31, 2022: Progress on Management and Business Targets

ConditionsA cquired GHG assessment permit (G-7-AP)/ Implement appraisal well drilling and evaluation work toward conducting Ichthys CCS operations/
Play a leading role to realize a CCUS hub project in Darwin, Australia

Strong management foundation

Started production at the Ichthys LNG Project (2018)
 greed to acquire stakes in offshore wind power generationA
projects in the Netherlands (2021)
Achieved then-record profits of 223.0 billion yen (2021)
Paid a then-record dividend of 48 yen per share (2021)
Conducted INPEX’s first share buyback (2021)

Fiscal 2021
(Actual)Expand forest conservation by 2024
CO2 reduction through CCS

Reduce flaring, improve operational efficiency

Fiscal year ended March 31, 2019 to fiscal year ended December 31, 2021

 aise LNG production capacity and build a framework to stably supply 9.3 million tons per
Ryear by 2024 (aim for achievement one year ahead of schedule in 2023)

New business opportunities/Renewable energy business

Existing production assets

 afely and stably operateSbusinesses
Contribute to the stablesupply of energy and securerevenue and cash flow

Ichthys2024

Growth Strategies for Value Creation

 reparing to start production at the Ichthys LNG Project afterPmaking the final investment decision (FID) in 2012 (2012–2018)
Completed the Naoetsu LNG Terminal (2013), completed the
Toyama Line in Japan (2016)
Joined the Sarulla Geothermal Project (2015)
Acquired interests in the Lower Zakum Oil Field and extended
interests in the Satah and Umm Al-Dalkh Oil Fields (2018)

Abu Dhabi

INPEX Medium- to Long-term Vision
Ichthys and our growth beyond2023

A ccelerate participation in and development of the exploration blocks of surrounding areas and discovered assets and aim to further grow production volume withan eye toward the expansion of Ichthys around 2030

IchthysAustralia

Positioning of Medium-term
Business Plan 2022–2024

Fiscal year ended March 31, 2013 to fiscal year ended March 31, 20182022
 nsuring stable supply and making the businessE
more resilient
Making the business cleaner

INPEX’s Vision and Value Creation

Medium-term Business Plan 2022–2024

ACG

Evaluate and implement additional development with strong investment efficiency, increase production capacity to 450 thousand BD/ Improve
operational efficiency of facilities, increase production through additional development, and reduce unit costs through OPEX reduction, etc.

 ommence production of additional development project/ Maintain and reduce operational costs by optimizing personnel allocation, contracts, etc./
C
Accelerate crude oil production (early value creation), use surplus capacity effectively (draw in crude oil produced from other projects, etc.)

Iraq Block 10 (Eridu Oil Field)
KashaganACGC arry out gas exploration, expand gas assets/ Pursue opportunities to enter renewable, hydrogen and CCUS businesses in Europe,leveraging the London and Oslo offices

Submit and receive approval for development plan/ Promote measures aimed at early-stage production

Promote GHG reduction based on GHG & Energy Management Strategy (GHG emissions reduction target)

Promote GHG reduction based on ACG Life of Field Strategy (Plan to set a GHG emissions reduction target)

INPEX CORPORATION Integrated Report 202229

We will promote and pursue both our oil andgas business and 5 net zero businesses.

Kimihisa Kittaka,
Director, Senior Managing Executive Officer,
Senior Vice President, Corporate Strategy & Planning,
Legal Affairs

Expected cash allocation for the threeyear Medium-term Business Plan period
Cash flow from operations before exploration will be allocated in the following order of priority: (1) debt reduction, (2) shareholder returns and (3) investment for
growth. We expect roughly 20 percent of investment for
growth to be channeled into our 5 net zero businesses.
Expected cash allocation for 2022–2024 (3-year period)
Debt reduction
Approx. 500 billion JPY
Cash flow fromoperations
before exploration
USD 60/barrel+USD 10/barrelApprox.

1,800 billion JPY+300 billion JPY

Shareholder returns
Approx. 200 billion JPY

INPEX CORPORATION Integrated Report 2022

In our oil and gas business, we plan to conduct exploration
activities in the vicinity of the Ichthys Field and in Abu Dhabi,
Iraq, the Gulf of Mexico and other areas. We will also invest
in the upkeep and maintenance of our existing facilities andthe expansion of production capacity. In January 2023, wedivested from all tight oil development and production in
Texas in the United States.
We are considering various opportunities for our 5 net
zero businesses and plan to allocate approximately 100 billion Japanese yen to this field. In March 2023, we acquired a
16.7 percent stake in the Moray East Wind Farm operating
off the coast of Scotland in the United Kingdom.

[Forecasts at start of fiscal 2022]
Brent crude oil price: USD 75.0/barrel,
exchange rate: 110.0/USD(Assumptions)[Fiscal 2022 results]
Brent crude oil price: USD 99.0/barrel,
exchange rate: 131.6/USD
Debt reduction2
525.1 (+320.1)

Debt
reduction2
Approx. 205
Cash flow from Shareholder returns
Approx. 75
operations
beforeInvestment
exploration
for growth
Approx. 710
Approx 430
5 net zero businesses
Approx. 120

Revenue

Expenditure

Cash flow fromoperations
Shareholder returns
before200.4 (+125.4)
exploration
Share buybacks
120
1,061.6 (+351.6)
Investment
for growth336.1 (−93.9)
5 net zero businesses
82.2

Revenue[Forecasts for fiscal 2023][Forecasts for fiscal 2023]

Brent crude oil price: USD 75.0/barrel,
exchange rate: 125.0/USD(Assumptions)

Brent crude oil price: USD 80.0/barrel,
exchange rate: 130.0/USD(Assumptions)(as of February 9, 2023)(as of May 10, 2023)

Debt reduction2
Approx. 190
Shareholder returns
110 or more

Cash flow fromoperations
beforeexploration3
Approx. 800

Expenditure

Total payout ratio
40% or more

Investment
for growth
Approx. 500
5 net zero businesses
Approx. 100

RevenueCash flow fromoperations
beforeexploration
Approx. 860

Expenditure

Revenue

Investment for growth
Approx. 1,100 billion JPY

1. Cash flow includes that from the downstream IJV (Ichthys LNG Pty Ltd), an equity-method affiliate.
2. Includes incremental cash and deposits, etc.
3. Amount after deducting roughly 8 billion Japanese yen in R&D expenses for the blue hydrogen and ammonia demonstration plant in Kashiwazaki City, Niigata
Prefecture, methanation and other efforts.

5 net zero businesses
Approx. 200 billion JPY

Fiscal 2022 and fiscal 2023 shareholder returns

Approx. 2,100 billion JPY

300 billion JPY

Revenue

Expenditure

Cash allocations for the fiscal year ended December 31, 2022 and the fiscal year
ending December 31, 2023

30

In our oil and gas business, we conducted exploration activities off the coast of Shimane and Yamaguchi Prefectures inJapan and in Norway, Abu Dhabi and other countries. We
invested in the upkeep and maintenance of existing facilities
and the expansion of production capacity. We also divested
our interests in the Lucius Oil Field in the U.S. Gulf of Mexico
as well as in Angola Block 14.
With regard to our 5 net zero businesses, we acquired additional shares in the Muara Laboh Geothermal Power Project and joined the Rantau Dedap and other geothermal
power projects in Indonesia. We also acquired stakes in the
Luchterduinen and Borssele III/IV offshore wind farms in Europe, among other acquisitions.

(as of February 9, 2023)

Fiscal 2022 and fiscal 2023 allocation of cash flow from operations before exploration1 (Billion JPY)

*These figures include the Ichthys downstream IJV and differ fromthose based on institutional accounting practices.

In the fiscal year ended December 31, 2022 (fiscal 2022),
cash flow from operations before exploration stood at
1,061.6 billion Japanese yen thanks to external factors including higher oil prices supporting our oil and gas business, and our steadfast promotion of safe and stable

Fiscal 2023 investment plansproduction operations. Given the uncertainty of our futurebusiness environment and our desire to ensure greater
flexibility in our management strategy, we focused on measures such as reducing interest-bearing debt to a greater
extent than originally planned. Combined with factors such

In fiscal 2022, we paid a dividend of 62 yen per share,
which represented an increase of 14 yen compared tothe previous year and a record dividend for the company.
We also implemented a share buyback on the scale of
120.0 billion yen. The total payout ratio was 44.1 percent.
In fiscal 2023, while we expect sales and income to
decline year on year, we plan to pay an annual dividendof 64 yen per share, which would represent another record payout, to further strengthen shareholder returns.
We will also consider additional returns depending on
the business environment and other factors in line withour commitment to a total payout ratio of 40 percent or
greater declared in the shareholder return policy in theMedium-term Business Plan.

Fiscal 2022 shareholder
returns (results)
Total payout ratio: 44.1%

Annualdividend(year on year)

62 JPY/share+14 JPY

Share buybacks

120.0 billion
JPY+50.0 billion JPY

Business and Financial Overview

When acquiring new projects in the upstream oil andgas business, the New Ventures & Global Exploration
Division analyzes and evaluates whether to take on new
projects and addresses risks in cooperation with associated departments. For existing projects, the INPEX Value Assurance System (IVAS) Committee works as across-organizational mechanism mainly on technicalevaluations at each project phase, such as exploration,
evaluation and development. At the same time, we conduct economic and risk evaluations at least once a year
as a matter of principle. For major projects, we provide
a summary of risk evaluation results to the Board of Directors each year.
Regarding our renewable energy, hydrogen, CCUS
and other 5 net zero businesses, the Renewable Energy& New Business Division and the Hydrogen & CCUS
Development Division coordinate their respective businesses overall, conduct economic evaluations and evaluate relevant risks to mitigate them. When acquiring
new projects, the INPEX Value Assurance System (IVAS)
Committee and external experts conduct verifications,and a summary of risk evaluation results is reported at
Board of Directors meetings for important projects.

Fiscal 2022 investment results

Management Foundation to Advance Growth Strategies

Investment policy

Japanese yen to debt reduction, etc. and at least 110 billion Japanese yen to shareholder returns to reflect the policy indicated in the Medium-term Business Plan policy ofachieving a total payout ratio of 40 percent or more. We
expect to allocate approximately 500 billion Japanese yen
to investment for growth. That represents a year-on-yearincrease of 160 billion Japanese yen resulting from an expected increase in oil and gas investment primarily in the
Oceania region and the delayed timing of investment projects from the previous year. As of the earnings report for
the first quarter of fiscal 2023 (on May 10, 2022), forecasted
cash flow from operations before exploration for fiscal 2023
is expected to increase by roughly 60 billion Japanesecompared to the previous forecast to approximately 860
billion Japanese yen due to higher oil prices and a weakeryen. The increase will be used strategically and comprehensively considering business strategy progress, shareholder returns and financial base, etc.

Growth Strategies for Value Creation

The conflict between Russia and Ukraine heightened concerns overthe stable supply of energy in 2022.
This also increased the world’s awareness of the importance of
simultaneously and realistically addressing the three themes ofstable energy supply, energy affordability and the energy transition
towards net zero.
INPEX Vision @2022, which we formulated in February 2022,
incorporates targets for the two-pronged pursuit of both our oil andgas business and our 5 net zero businesses. Our vision has helped
us respond to recent changes in our business environment, and wewill continue to follow its management parameters going forward.

as an increase in cash and deposits, etc. at the end of theperiod, we were able to increase the allocation of funds toreduce interest-bearing debt and other purposes to 525.1
billion Japanese yen, which is roughly 320.1 billion Japanese yen more than initially expected. We allocated 200.4
billion Japanese yen to shareholder returns in the form of
dividends and share buybacks. We allocated 336.1 billion
Japanese yen to investment for growth. That total was 93.9
billion Japanese yen less than initially expected owing tosome disciplined investment decisions and delays in thetiming of cash payments to investment projects.
As of the earnings report for fiscal 2022 (on February 9,2023), forecasted cash flow from operations before exploration for fiscal 2023 is expected to decrease by roughly
260 billion Japanese yen year on year to approximately 800
billion Japanese yen due to our somewhat conservate assumptions for oil prices and foreign exchange rates. During
fiscal 2023, we expect to allocate roughly 190 billion

INPEX’s Vision and Value Creation

Message from the Senior Vice President of Corporate
Strategy & Planning

Fiscal 2023 shareholder
returns (forecast)T otal payout ratio: 40 %or greater

Annualdividend

64 JPY/share+2 JPY

Shareholder returns for this fiscal
year will be determined based on
our shareholder returns policy outlined in INPEX Vision@2022 after
assessing the year-end forecasts etc.
in the second quarter of fiscal 2023.

INPEX CORPORATION Integrated Report 2022

31

Building a Stronger Management Foundation

5 Net Zero Businesses

Strengthening Technology
1 We will further improve the technologicalTechnology
in new fields(strengthen
R&D)

RenewableenergyOil andgas E&P(geothermal,
wind)More efficient, low-carbon
oil and gas E&P

SAF
Methanation

UndergroundCO2 storage

Hydrogenandammonia

CO2 capture
DAC

Establish a competitive
advantage in renewableenergy and undergroundCO2 storage

Achieve practicalimplementation of
decarbonized energy

2030

Oil and Natural Gas Business
Case 3: R educing costs and building resilience of
natural gas development projects

Recent advances in technology have made it possible toobtain a substantial amount of relatively high-quality information, such as physical exploration data and welldata related to underground areas where oil and gas reservoirs exist. However, the information we can acquirefrom underground is still limited and a great deal of laborand costs are expended on improving the accuracy ofunderground evaluation and reducing uncertainty. We
are developing subsurface evaluation methods to improve the accuracy and efficiency of subsurface evaluation using machine learning, which has shown remarkabledevelopment in recent years.

Generally speaking, natural gas development projects,
especially the construction of LNG terminals and associated projects, require large-scale investment and theplants can take many years to construct. We leverage theexperience we have gained through developing and operating the Ichthys LNG Project to help bring projects tofruition more swiftly and at a lower cost. This involves
considering the use of new technologies in such ways as
applying pre-designed modular plants from individual
process licensors and EPC contractors and utilizing subsea equipment, which has advanced remarkably in recent
years, to simplify offshore facilities.

Case 2: T echnology for enhanced oil recovery using
carbon dioxide (CO2-EOR)

Case 4: U sing AI-land technical data platform to manage
big data for exploration and development

CO2 enhanced oil recovery (CO2-EOR), which involves theinjection of CO2 into oil reservoirs to increase oil recovery,is attracting attention due to its potential contribution toresolving environmental issues through the storage of CO2
underground.
However, CO2 is a lighter and faster flowing substancethan oil, so it sometimes only penetrates the highly permeable zones of the oil reservoir, leaving large amounts ofoil behind underground. We are using CO2 foam technology to overcome this weakness and are researching anddeveloping a special technology to recover undergroundoil more efficiently by mixing CO2 and water to create
foam that is less likely to collapse even in the severe reservoir environment with high temperatures and pressure.

The AI-land technical platform, a system for managing
technical data on the INPEX cloud, has been operational
since 2021. At the core of the AI-land platform is the geographic information system (GIS), which collects andstores underground data such as seismic exploration
data (1 petabyte) and well data (4 terabytes).
Such initiatives as the visualization of geospatial databy overlaying the AI-land maps of well and seismic exploration data with maps of CCS and CO2 emission sources
data can be applied to our 5 net zero business and arecontributing to creating new synergies.

Case 4: Decarbonization technology
Compressors and power generators driven by gas turbines or gas engines have conventionally been employedin many oil and natural gas production facilities. The
technologies for capturing CO2 from exhaust gas fromgas combustion facilities are important to facilitate clean
oil and gas production going forward, so we are constantly evaluating such aspects as whether its use would
be suitable in existing facilities.
We are also conducting research and development on
direct air capture (DAC) and other technologies for capturing CO2 from the atmosphere, sustainable aviationfuel (SAF) manufacturing processes and other fields.

Case 2: Hydrogen and ammonia
One initiative in our hydrogen and ammonia business has
involved building a blue hydrogen* and ammonia production demonstration plant in Kashiwazaki City, Niigata
Prefecture, which we plan to start operating in 2025.
INPEX is also examining sites for the construction of alarge-scale clean ammonia production plant in Abu Dhabi, UAE. We will explore transportation and storage technologies, both essential elements of the hydrogen supply
chain, as a technical challenge for I-RHEX.
*B
 lue hydrogen is a type of clean hydrogen produced through the steam reforming of
natural gas, combined with the capture and underground storage of CO2 produced
during the process, and it contributes to preventing global warming.

Reinforcing Marketing Capabilities
Make energy cleaner

Diversify energy supply

Fiscal 2022
initiatives

Strengthened relationships with existing customers, acquired new customers, diversified sales methods
Expanded LNG trading volume to further stabilize supply Expanded sales of carbon offset products
Prepared to develop LNG bunkering business to strengthen midstream and downstream businesses

Fiscal 2023
strategy xpand cooperation with existing customers, secure business opportunities with new customers, pursue new sales methods
E
Expand transportation functions Strengthen sales of carbon offset products and expand carbon credit portfolio
Establish business in the gas value chain (LNG bunkering, biofuels, etc.)

Enhancing HSE
INPEX seeks to further enhance HSE management to achieve zero major accidents.
Fiscal 2022
initiatives

Formulated our corporate HSE medium-term plan in line with INPEX Vision@2022 business goals
Formulated our commitments on environmental management for disclosure in conjunction with our revised Health, Safety
and Environmental Policy.

Fiscal 2023
strategy

Improve measures to prevent accidents implement HSE management in our 5 net zero businesses Further improve process
safety management through systematic programs
Address global environmental issues and create environmental value,Prepare for new threats Strengthen health management and infectious disease control Demonstrate HSE leadership andimprove the effectiveness of HSEMS Improve HSE competence and secure human resources Implement HSE managementin our 5 net zero businesses

Business and Financial Overview

Case 1: U sing machine learning in subsurface
assessments

INPEX CORPORATION Integrated Report 2022

Methanation is a technology involving the reaction of
CO2 and hydrogen to synthesize methane, the main component of city gas. Synthetic methane can be supplied tocustomers through existing gas infrastructure so it canhelp promote the decarbonization of society, including
areas where electrification is difficult, without incurringlarge infrastructure costs.
From 2017 to 2021, INPEX undertook basic technicaldevelopment of CO2 methanation at INPEX’s Koshijihara
Plant, Nagaoka City, Niigata Prefecture. The plant has
been conducting a technology development project forthe practical application of methanation at a rate of
400Nm3-CO2/h since 2021.

 einforce marketing capabilities respondingR
to customer needs

R&D Themes

32

Carbon dioxide Capture and Storage technology (CCS)
involves injecting CO2 into the ground.
For the effective storage of CO2 underground, a suitable distribution of both permeable and impermeable
rocks is necessary. One such example is a combination ofsandstone that enables the injection of CO2 and mudstone that seals the injected CO2 and prevents leakage
to the surface. These combinations are similar to theconditions required for the formation of oil and naturalgas, so we can use the geological and geophysical exploration expertise that we have cultivated in our oil andnatural gas exploration and development business tohelp select appropriate CO2 injection sites. We are currently conducting evaluations in Japan and overseas toselect appropriate injection sites.

Management Foundation to Advance Growth Strategies

To further promote these efforts, we will work to strengthen the INPEX Research Hub for Energy Transformation, or
I-RHEX for short, enhance our digital infrastructure and bolster the capabilities of our human resources.

Case 3: Methanation

Growth Strategies for Value Creation

prowess of our oil and natural gas development to reduce costs, make the industry cleaner, promote a shift to natural gas
and encourage early development.
2 We will adapt and develop the technologies cultivated through oil and natural gas
development to the technologically compatible fields of underground CO2 storage, geothermal power generation andoffshore wind power generation.
3 We will test and verify decarbonization
technologies such as hydrogen and ammonia as well as methanation and exploreand develop innovative and practical decarbonization technologies.

2022
Existing
E&P
technologies

Case 1: Carbon dioxide Capture and Storage (CCS)INPEX’s Vision and Value Creation

We will strengthen our management foundation in four fields that are crucial as we forge ahead in the 5 net zerobusinesses and the oil and gas business. In those four fields, we will pursue the following: strengthening technology
to be applied to making the oil and gas business cleaner and to the 5 net zero businesses, reinforcing marketing
capabilities in line with customer needs, enhancing HSE to achieve safe operations and strengthening human resources and organizational structure as the bases of organizational performance.

Strengthening Human Resources and Organizational Structure
Human
resources

Create a most rewarding
company to work for

Organizational
structure

Flexibly update the company’s organizational structure according
to the business environment and management strategy

Fiscal 2022
initiatives

Introduced a job-focused HR system for senior management Secured human resources by expanding mid-career recruitment quotas
Implemented the third round of COVID-19 vaccinations in the workplace and expanded the occupational
Introduced a self-nomination and selection-basis leadership development programphysician team at the head office
Introduced a one-on-one communication system
Acquired continuous certification as an outstanding health and productivity management organization (Health & Productivity Stock Selection and White 500 programs)

Fiscal 2023
strategies

Formulate personnel strategy proposals in line with business strategies Introduce role-based personnel systems for general employees and those under re-employment contracts
Further expand the use and scope of internal job-posting
scheme Actively recruit diverse human resources such as women, researchers, and highly skilled specialists (also introduce
Renew welfare systems (introduce cafeteria plan)
Formulate and implement health management
referral recruitment)
measures to ensure continuous certification as an outstanding health and productivity management organization
Resumehead office training programs for overseas local employees that had been suspended due to COVID-19

INPEX CORPORATION Integrated Report 2022

33

Business Strategy

Develop a hydrogen business

Quantitative Kashiwazaki demonstration project: 700 tons per year (2025 forecast)target:Priority
Conduct well drilling for CCUS
measures:Design above-ground equipment, order major equipment and carry out construction work
Fiscal 2022 achievements
Implemented final investment decision (FID) for well drilling and construction of above-ground facilities for an integrated
demonstration test of blue hydrogen and ammonia production and utilization in Kashiwazaki City, Niigata Prefecture
Initiated feasibility study with Australian energy provider AGL Energy for green hydrogen production projects in South
Australia and New South Wales

CCUS

Reduce CO2 emissions from oil & gas operations (CCUS)

Renewable energy

Enhance and emphasize renewable energy initiatives

Fiscal 2024 Targets/ Priority Measures

Wind Power: Be a key player in the floating offshore wind power business
Geothermal Power: Aim for further expansion, mainly in Japan and Indonesia
Quantitative Renewable power generating capacity of 500MW
Qualitative
target:target:Priority
measures: ind Power: Progress development of offshore wind power business, and construction for floating offshoreWwind power project offshore Goto City, ensure stable operations and expand business at European wind power projects, generate business opportunities in Southeast Asia, Australia and the United States
Geothermal Power: Carry out additional development at Muara Laboh Geothermal Power Project in Indonesia, progress construction for Oyasu Geothermal Power Project, progress exploration of geothermal energy inother regions, including Indonesia and Japan

Fiscal 2022 achievements
Wind Power: Joined Luchterduinen and Borssele III/IV offshore wind power projects in the Netherlands, established theLondon office of INPEX Renewable Energy Europe Limited, a subsidiary in the UK in charge of wind farms in Europe, which
was established in November 2021, and began work through this office, began construction for floating offshore wind
power project off Goto City, Nagasaki Prefecture
Geothermal Power: Acquired new concessions at Muara Laboh Geothermal Power Project in Indonesia, opened Jakarta
office of INPEX Geothermal, Ltd., made FID for Oyasu Geothermal Power Project, Akita Prefecture

34

INPEX CORPORATION Integrated Report 2022

Promote forest conservation

Fiscal 2024 Targets/ Priority Measures

Strengthen and expand businesses aimed at reducing CO2 emissions
through forest conservation
Quantitative REDD+ project: 1.5 million tons
Qualitative
target:target:Priority
measures:

Acquire carbon credits from Rimba Raya REDD+ and support project rocure high-quality credits from forest conservation projects based on highly reliable certification systems
P

Fiscal 2022 achievements
Started cooperating with ANZ Bank and Qantas Airways on carbon farming and biomass fuel business in Australia

Targets and initiatives in the oil and gas business isk of disasters, accidents, system failures, etc.
R
Risk of failure in exploration, development and production
Risk of fluctuations in resource prices, foreign exchange
rates, interest rates, etc.
Risks relating to climate change (increased costs due tochanges in policies and regulations, decreased demandfor oil and natural gas products, etc.)
Country risk, etc.

Increased importance of natural gas
in energy transition
Opportunities to make oil and natural gas upstream businesses cleaner
and more resilient etc.

Fiscal 2024 targets/ priority measures
Qualitative
targets:
Quantitative
targets:
Priority
measuresBusiness and Financial Overview

Fiscal 2022 achievements
Won bid for offshore GHG assessment permit (G-7-AP) in the Northern Territory of Australia
Commenced discussions with PTTEP and JGC Holdings to develop CCS projects in Thailand
Completed drilling of two wells for CO2EOR demonstration tests in Minami-aga, Niigata Prefecture

Forest conservation

Management Foundation to Advance Growth Strategies

Fiscal 2024 Targets/ Priority Measures
Quantitative Kashiwazaki demonstration project, etc.: 6,000 tons per year (2025 forecast)target:Priority
Start CO2 injection tests at the CO2EOR demonstration in Minami-aga, Niigata Prefecture, by end
measures:2023, seek to establish EOR efficiency-improvement technology currently under development, aim to expand
CCUS technology in Japan and deploy EOR technology in overseas oil fields.
Based on the Long-Term CCS Roadmap formulated by the Japanese government, promote surveys and studies
with partner companies on CCS in Japan with the aim of commercializing them as advanced CCS businesses.
Recording of 3D seismic exploration data in the Bonaparte CCS Project in Australia planned to start in 2023;
proceed with evaluation and preparation work to start drilling. Study CCS injection facilities, etc.
Advance discussions on the development of specific CCS projects in Thailand together with PTTEP and JGC
Holdings. Pursue detailed discussions to develop a CCS project in Sarawak with PETROS, a Sarawak stateowned company in Malaysia.

Fiscal 2022 achievements
Conducted engineering works for the construction of the methanation demonstration facility of 400Nm 3/h in Nagaoka
City, Niigata Prefecture
Conducted a study for large scale demonstration facility of 10 thousand Nm3/h in Australia etc.

Growth Strategies for Value Creation

Fiscal 2024 Targets/ Priority Measures

Fiscal 2024 Targets/ Priority Measures

Opportunities

Hydrogen Ammonia

 arious changes towards a net zero carbon society (increasedVdemand for hydrogen, ammonia, CCUS, renewable energy etc.)Opportunities to develop new businesses that meet the
new needs of society, etc.

Promote carbon recycling andcultivate new business opportunities

Quantitative Domestic technology development business of 400Nm3/htarget:Priority
Commence production of synthetic methane during fiscal 2025 in Nagaoka City, Niigata Prefecture
measures:and aim to commence supply via our pipeline network
Conduct engineering, procurement and construction works for the methanation demonstration facility

Risks

 isk of disasters, accidents, systemRfailures, etc.
Risk of business failureCountry risk, etc.

Opportunities

Risks

To realize our Vision for around 2030, we will steadily promote demonstration tests and research in our 5 net zerobusinesses and prepare for full-scale investment.

Carbon Recycling and
New Business Opportunities

INPEX’s Vision and Value Creation

Target Initiatives in the 5 Net Zero Businesses

Safely and stably operate businessContribute to stable energy supply, secure new revenue and cash flow
Net production of over 700 thousand barrels per day
Reduce production costs to under 5 US dollars per barrel
Zero major accidents
Core area selection and concentration

Natural gas shift

Resilience and cleaner operations

Fiscal 2022 achievements
Safely completed Australia Ichthys LNG Project’s planned shutdown maintenance as scheduled; shipping 112 LNG cargos
per yearProceeded with existing development plans in Abu Dhabi and considered further production increases
Implemented smooth production activities in Norway projects
Conducted a comprehensive study on cleaner production, including the introduction of CCS at Abadi LNG in Indonesia,
and continued negotiations with the government and related organizations on re-revising the development plan
Sold the Lucius Oil Field and Angola Block 14

For project details, see Project Overview by Core Business Areas

See page 38

INPEX CORPORATION Integrated Report 2022

35

Centralize Business Portfolio by Setting Core Business Areas

Oil & gas

Hydrogen/Ammonia

CCUS

Wind

Geothermal

Methanation

Forest conservation

EuropeHydrogen/Ammonia:
Integrated demonstration of hydrogen &ammonia production and usage(Kashiwazaki City, Niigata Prefecture, Japan)

Renewable energy:
Floating offshore wind power business(Goto City, Nagasaki Prefecture, Japan)

Growth Strategies for Value Creation

EuropeOil & gas business:
Minami-Nagaoka Gas Field, etc.

CCUS:
CO2EOR demonstration at Minami-aga(Niigata Prefecture, Japan)

Oil & gas business:
Norway Business, etc.
Renewable energy:
Luchterduinen and
Borssele III/IV
offshore wind power
generation projects(the Netherlands)Japan

INPEX’s Vision and Value Creation

We have designated the five regions of Australia, Abu Dhabi, Southeast Asia, Japan, and Europe as our core business areas, expanding upon our previously established core business areas in the oil and gas business to include
the new 5 net zero businesses. The Company will pursue synergies by leveraging business foundations such as existing business assets, networks, and technologies, while improving operational efficiency by focusing management
resources.

Geothermal power generation business(The Oyasu area Akita Prefecture, Japan)
Carbon recycling/New business:
Technical development of Methanation etc.

©Equinor

The Moray East
offshore wind power
generation projects(The UK)

Southeast Asia
Japan

Management Foundation to Advance Growth Strategies

Oil & gas business:
Abadi LNG Project (Indonesia), etc.
CCUS:
CCUS studies for Abadi LNG Project
Renewable energy:
Muara Laboh Geothermal Power
Project, Rantau Dedap Geothermal
Power project(Indonesia), etc.

Abu Dhabi

Forest conservation:
Rimba Raya Biodiversity Reserve
REDD+ project (Indonesia)
Southeast Asia

Australia

Business and Financial Overview

Abu Dhabi

Australia
Oil & gas business:
Ichthys LNG Project, etc

Oil & gas business:
Zakum oil fields, Onshore
Concession, etc.

Hydrogen/Ammonia:
Pursuing opportunities inhydrogen businessHydrogen/Ammonia:
Clean ammonia
production joint study

CCUS:
Ichthys LNG Project CCS underconsideration and preparation etc.

CCUS:
CO2EOR Pursuing in
Abu Dhabi

Forest conservation:
Afforestation and savanna fire
management

Note: Icons on the map indicate that the company currently owns assets or has concrete plans.

36

INPEX CORPORATION Integrated Report 2022

INPEX CORPORATION Integrated Report 2022

37

Project Overview by Core Business Areas
In production
Under development
Preparation for development
Under explorationOP

G-7-AP(GHG storage assessment permit) OP

Darwin2 Prelude FLNG Project(WA-44-L)
1 Ichthys LNG Project(WA-50-L/WA-51-L)

Operator project
Key group company
headquaters and offices

EP(A)318

OP

Under
exploration(blocks underappraisal on
the discovery
of gas andcondensate)

WA-285-P
WA-532-P/WA-533-P
WA-343-P
AC/P36
AC/P66

WA-35-L (Van Gogh Oil Field)
WA-43-L(Ravensworth Oil Field)

Under
exploration

AUSTRALIA

2
Bayu-Undan Project 3(PSC-TL-SO-T 19-12 (former JPDA03-12))

Perth

PSC-TL-SO-T 19-11
WA-74-R

WA-85-R

AC/P66

OP

AC/P36

2 Prelude FLNG Project(WA-44-L)

WA-285-P

1

WA-281-P

1 Ichthys LNG Project
WA-532-P

In production

Venture company(established)

LNG: Approximately 8.9 million tons per year
INPEX Ichthys
LPG: Approximately 1.65 million tons per year
Pty Ltd
Condensate: Approximately 100 thousand barrels(April 5, 2011)
per day (at peak)Interest owned(*Operator)
INPEX Ichthys Pty Ltd* 66.245%
TotalEnergies 26.000% CPC 2.625%
Tokyo Gas 1.575% Osaka Gas 1.200%
Kansai Electric Power 1.200%
JERA 0.735% Toho Gas 0.420%

Introduction of CCS
While maintaining and expanding LNG production, INPEX addresses climate change by considering CCS projects for the capture,underground injection and storage of CO2 emitted from our production operations. In August 2022, we were awarded a GHG storage assessment permit (title G-7-AP) located off the northwestern coast of the Northern Territory, Australia. Going forward, we intend to conduct evaluation and appraisal work in the block and assess the feasibility of introducing CCS in the late 2020s. We will
introduce CCS to Ichthys in the late 2020s and aim to start injection of 2 million tons or more of CO2 per year as a first step.
Contract area
(block)G-7-AP(GHG storage assessment
permit)38

Project status
Underevaluation

INPEX CORPORATION Integrated Report 2022

Venture company
INPEX Browse E&P Pty Ltd(October 21, 2013)

Interest owned(*Operator)*INPEX Browse E&P Pty Ltd 53%
TotalEnergies CCS Australia 26%
Woodside Energy 21%

Concerto Gas Field

Contract area
(block)Project
statusIchthys Gas-Condensate
Field
40km

Venture company(established)

Production capacity

LNG: Approximately 3.6 million tons per year
LPG: Approximately 400 thousand tons per year
In production(at peak)Condensate: Approximately 1.3 million tons per
year (at peak)

INPEX Oil & Gas
Australia Pty Ltd(February 28, 2012)

WA-44-L

AUSTRALIA

Prelude Gas Field

03

Production capacity

Timor Sea

Gas field

Interest owned(*Operator)
INPEX Oil & Gas Australia 17.5%
Shell* 67.5% KOGAS 10.0%
OPIC 5.0%

Bayu-Undan Project (PSC-TL-SO-T 19-12 (former JPDA03-12))

In 1993, INPEX acquired an interest in the former JPDA03-12 contract area, which was jointly
managed by Australia and East Timor. Exploration within this contract area resulted in the
discovery of oil and gas fields. Of these, studies revealed that the Undan structure and theBayu structure, located in the adjacent former JPDA03-13 contract area, were a single structure. The interest holders unitized both contract areas into one in 1999, which is now known
as the Bayu-Undan Gas-Condensate Field and produces and ships condensate, LPG and
LNG. As a result of the ratification of a maritime boundary treaty between Australia and East
Timor, a new production sharing contract (PSCTL-SO-T 19-12) was bound with East Timor in
2019. As part of our action on climate change, the project is considering a CCS project forthe capture, underground injection and storage of the CO2 emitted from the Barossa Gas
Field located in waters northwest of Australia and other oil and gas fields around it, by reusing the production facilities of the Bayu-Undan Gas-Condensate Field after the terminationof production there, along with the Darwin LNG facilities.
Contract area
(block)Bayu-Undan Unit

Project
status

Production volume**

Crude oil: 5 Kbbld
In production Natural gas***: 99 MMcf/d
LPG: 2 Kbbld

Venture company(established)
INPEX Sahul, Ltd.
(March 30, 1993)

EAST TIMOR INDONESIA
AUSTRALIA

Bayu-Undan
Gas-Condensate Field
DarwinGas Pipeline
DarwinAUSTRALIA
050km

Gas field

Business and Financial Overview

WA-50-L/
WA-51-LIn June 2012, INPEX acquired a 17.5% interest in the Prelude FLNG (floating LNG) Projectfrom Shell during the project’s development stage. The Prelude FLNG Project involves the
production of approximately 3.6 million tons per year of LNG, 400 thousand tons per year of
LPG at peak and approximately 1.3 million tons of condensate per year at peak from the
Prelude Gas Field located in Block WA-44-L, approximately 475 kilometers north-northeastof Broome, off the coast of Western Australia. Shell as the operator of the Prelude FLNG
Project announced its FID in May 2011. Following the completion and commissioning ofproduction facilities, gas production from the wellhead commenced in December 2018. The
first condensate cargo was shipped in March 2019 followed by the first LNG cargo in June2019.

WA-44-LIn 1998, INPEX acquired an exploration permit in the block where the Ichthys Gas-Condensate Field is now located, and following development studies including exploration, evaluation, and front-end engineering design (FEED) work, INPEX announced
its final investment decision (FID) in January 2012. Following the completion and commissioning of production facilities, INPEX
commenced production in July 2018 and later began shipping condensate, LNG and liquefied petroleum gas (LPG). Stable production has continued since the launch of production in 2018, and 117 LNG cargoes were shipped from the plant in 2021 and112 LNG cargoes in 2022. There are no plans for any large-scale shutdown maintenance in 2023, so assuming that operations
proceed smoothly, we expect to ship around 11 LNG cargos per month . Also, in 2023, we aim to further increase the current annual LNG production capacity of 8.9 million tons and build a framework to stably supply 9.3 million tons per year as set forth in
our Medium-term Business Plan one year ahead of schedule.
Project
statusINPEX Browse E&P Pty Ltd* 100%

Prelude FLNG Project (WA-44-L)

OP

Ichthys LNG ProjectContract area
(block)INPEX Browse E&P Pty Ltd 40% Santos* 60%
INPEX Browse E&P Pty Ltd
INPEX Browse E&P Pty Ltd* 62.245% TotalEnergies 30.000%(October 21, 2013)
CPC 2.625% Tokyo Gas 1.575% Osaka Gas 1.200%
Kansai Electric Power 1.200% JERA 0.735% Toho Gas 0.420%
INPEX Browse E&P Pty Ltd* 100%
INPEX Browse E&P Pty Ltd* 100%
INPEX Browse E&P Pty Ltd* 50% Murphy 50%

OP(WA-50-L/WA-51-L) OP

CPF Ichthys
Explorer

INPEX Browse E&P Pty Ltd* 60% TotalEnergies 40%
INPEX Browse E&P Pty Ltd 26.6064% Santos* 63.6299% Beach 9.7637%
INPEX Browse E&P Pty Ltd 29.5% Santos* 70.5%

Management Foundation to Advance Growth Strategies

WA-343-P OP
WA-56-R OP

WA-81-R
WA-79-R
WA-84-R
WA-80-R
WA-86-R
WA-533-P OP

OPInterest owned(*Operator)
INPEX Browse E&P Pty Ltd 40% Santos* 60%

INPEX Oil & Gas
Australia Pty Ltd(February 28, 2012)

EP(A)318
Van Gogh Oil Field,
Ravensworth Oil Field
and others

Venture company(established)

Growth Strategies for Value Creation(Coniston Oil Field)

Project
statusOP

3 Bayu-Undan Project(PSC-TL-SO-T 19-12(former JPDA03-12))

WA-35-L & WA-55-L

Contract area
(block)WA-84-R/WA-85-R/
WA-86-R
WA-56-R
WA-80-R
WA-281-P
WA-74-R/WA-79-R/
WA-81-R/

INPEX’s Vision and Value Creation

Australia

In the Oceania region, INPEX is the operator of Ichthys, a largescale liquefied natural gas (LNG) project, and is actively involvedin exploration projects, seeking further growth in the region.

Surrounding exploration blocks
INPEX holds interests in 16 exploration blocks in the vicinity of the Ichthys Gas-Condensate Field and has discovered gas in several of these blocks. Expecting various synergies, including effectively using existing facilities, we will accelerate participation in
exploration activities in the vicinity of the Ichthys Field as well as the development of discovered but undeveloped assets to further ensure a sustained production volume in the long term, and then aim to further expand production volume visualizing the
expansion of Ichthys in around 2030.

Oil field

Map includes provisional maritime
boundaries

Interest owned(*Operator)
INPEX Sahul 11.378120% Santos* 43.437907%
SK E&S 25.000000% Eni 10.985973%
Tokyo Timor Sea Resources (JERA/Tokyo Gas) 9.1980000%** Daily production volume on the basis of all fields and average rate of fiscal year ended December 31, 2022*** Not the volume at wellheads but corresponds to the gas volume sold to buyers

Other projects
Country
Australia

Contract area
(block)WA-35-L & WA-55-L (Van Gogh Oil
Field, Coniston Oil Field)

Australia

WA-43-L (Ravensworth Oil Field)

East Timor

PSC-TL-SO-T 19-11

Project
statusVenture company

In production INPEX Alpha, Ltd.
Under
exploration

Interest owned(*Operator)
INPEX Alpha, Ltd. 47.499% Santos* 52.501%

INPEX Alpha, Ltd. 28.5% Woodside* 39.999%
Santos 31.501%
INPEX Offshore Timor-Leste, INPEX Offshore Timor-Leste, LTD. 35.47%
LTD.
Eni* 40.53% Timor Gap 24%
INPEX CORPORATION Integrated Report 2022

39

Project Overview by Core Business Areas

Under development
Under exploration
OP Operator project

Key group company
headquaters and offices

In Abu Dhabi in the United Arab Emirates, INPEX works on, in addition to exploration
activities, further expanding production capacity through various production projects
continuing steady production.

SYRIA

IRAQ

AFGHANISTAN

Block 10

Abu Dhabi Offshore Oil Fields

INPEX has been engaged in the development and production of oil fields offshore Abu Dhabi in the United Arab Emirates since1973. In January 2014, we extended our concession agreement for the Upper Zakum Oil Field by 15 years. Subsequently, in November 2017, we agreed on the plan to increase the oil field’s production capacity to one million barrels per day and extended
our concession agreement by a further ten years. In February 2018, we newly acquired an interest in the Lower Zakum Oil Field
concession and extended our existing concession agreements for the Satah and Umm Al-Dalkh Oil Fields by 25 years. INPEX isnow engaged in the development and production of four oil fields offshore Abu Dhabi, namely the Upper Zakum Oil Field,
which is one of the largest in the world, as well as the Lower Zakum, Satah, and Umm Al-Dalkh Oil Fields. The crude oil produced in the Upper Zakum, Satah and Umm Al-Dalkh Oil Fields is transported to Zirku Island, about 60 kilometers from the Upper Zakum Oil Field. There, the crude oil is processed before being stored and shipped as Upper Zakum Crude Oil. The crude
oil produced in the Lower Zakum Oil Field is transported to Das Island, about 90 kilometers away, where it is processed before
being stored and shipped as Das Crude Oil. INPEX was appointed as the asset leader of the Lower Zakum Oil Field concession
by ADNOC. As asset leader, INPEX plays a leading role in advancing development and is working closely with ADNOC and its
partners to lift the oil field’s production capacity to 450 thousand barrels per day.
60km

0

JORDAN

2 Abu Dhabi Offshore Oil Fields

Satah Field

KUWAIT

Upper Zakum Oil Field
Lower Zakum Oil Field

Das Island
PAKISTAN

Abu Dhabi

Zirku Island

3 Onshore Block 4

OP

Abu Dhabi

UNITED
ARAB
EMIRATESSAUDIARABIA

Growth Strategies for Value Creation

IRAN

2

INPEX’s Vision and Value Creation

Abu Dhabi

In production

Umm Al-Dalkh Field

OMAN

United Arab Emirates

Management Foundation to Advance Growth Strategies

Oil field
Subsea pipeline

Zirku Island

Contract area
(block)YEMEN

1 Abu Dhabi Onshore Concession

1

60km

Venture company(established)

Lower Zakum Oil
Field

Approximately 450
thousand barrels per day

Upper Zakum Oil
Field

Approximately 1 million
In production barrels per day

3

Interest owned
JODCO 10% ADNOC 60%
Consortium of three Indian companies 10%
CNPC 10% TotalEnergies 5% Eni 5%

JODCO Lower Zakum Limited(January 25, 2018)

JODCO 12% ADNOC 60%
ExxonMobil 28%

Japan Oil Development Co., Ltd.
Approximately 25(JODCO)
thousand barrels per day / (February 22, 1973)
Approximately 20
thousand barrels per day

JODCO 40% ADNOC 60%

Onshore Block 4

INPEX participated in the first-ever block bid round conducted by the Abu Dhabi National Oil Company (ADNOC) in Abu Dhabi
in the United Arab Emirates in 2018 and was exclusively awarded Onshore Block 4 as the operator. After drilling exploratory
wells from May to August 2021, we have discovered multiple oil and gas reservoirs. Currently appraisal work is underway aiming
for early-stage development and production commencement.

Business and Financial Overview

INPEX acquired a 5% interest in the ADCO Onshore Concession in Abu Dhabi in April 2015 following its participation in a bid.
INPEX also concluded a 40-year agreement, effective January 1, 2015, with the Supreme Petroleum Council of the Emirate of
Abu Dhabi and Abu Dhabi National Oil Company (ADNOC). The concession contains one of the world’s largest deposits of oil.
Stable production of crude oil is currently under way from twelve deposits, and plans are being considered to further increase
the daily production capacity from its current two million barrels per day.
0

Target production
capacity

Satah Field/
Umm Al-Dalkh Oil
FieldsAbu Dhabi Onshore Concession

Oil fields in production

Project
statusAbu Dhabi

Undeveloped oil fields

IRAQ

Crude oil pipelines

IRAN

Onshore Block 4
Abu Dhabi

SAUDI ARABIA

United Arab Emirates

OMAN
SAUDI ARABIAUNITED ARAB
EMIRATES

Block

Saudi Arabia

0

OMAN

100km

Oil processing facility

Contract area
(block)Abu Dhabi Onshore
Block

40

Project status
In production

INPEX CORPORATION Integrated Report 2022

Venture company(established)
JODCO Onshore Limited(April 15, 2015)

Interest owned
JODCO 5% ADNOC 60%
TotalEnergies 10% BP 10% CNPC 8%
NPIC 4% GS 3%

Contract area
(block)Onshore Block 4

Project status
Under exploration

Venture company(established)
JODCO Exploration Limited(February 6, 2019)

Venture company(established)
JODCO 100%

INPEX CORPORATION Integrated Report 2022

41

Project Overview by Core Business Areas

Under development
Preparation for development
Under exploration
Renewable energy project

In Southeast Asia, INPEX focuses on Abadi, a large-scale LNG project,and other projects such as the Muara Laboh Geothermal Power Project.

OP

Operator project
Key group company
headquaters and offices

THAILANDVIETNAMPHILIPPINES

3 Block 05-1b/05-1c(Sao Vang and
Dai Nguyet Gas Field)

MALAYSIA

SK418

4E

2 Tangguh LNG
Project(Berau Block)

SINGAPORE
Muara Laboh Geothermal
Power Project

Sebuku Block

Rantau Dedap
Geothermal Project
Rajabasa
Jakarta
Geothermal
Project(Ruby Gas Field)

INDONESIA

1 Abadi LNG Project OP
Abadi LNG Project drilling ship

In 2004, INPEX acquired Blocks 05-1b and 05-1c, located 350
kilometers southeast of Ho Chi Minh City, Vietnam. In 2010, an
exploration well was drilled in the Dai Nguyet (DN) structureleading to the discovery of gas and condensate accumulations. In 2014, another exploration well was drilled in the Sao
Vang (SV) structure, which also led to the discovery of gas andcondensate accumulations. In 2017, a development plan for
the SV/DN gas field was approved by the Vietnamese government, and production commenced at the Sao Vang Gas Field
in 2020, followed by the Dai Nguyet Gas Field in 2022.
Contract area
(block)Project
statusInterest owned(*Operator)
INPEX Masela* 65%, Shell 35%

Tangguh LNG Project (Berau Block)

INPEX CORPORATION Integrated Report 2022

Sao Vang and Dai Nguyet Gas Field

CAMBODIAVIETNAMTHAILANDMALAYSIA

Block 05-1b/05-1c

Gas field

010km

Venture company(established)

Production volume**

Interest owned(*Operator)
Teikoku Oil (Con Son) Co., Ltd. 36.92%
Teikoku Oil (Con
Idemitsu Gas Production (Vietnam) Co., Ltd.*Son) Co., Ltd.
43.08%(October 29, 2004)
Vietnam Oil and Gas Group (PetroVietnam) 20%

4

Geothermal Power Projects in Indonesia

In geothermal power generation, the thermal energy of underground magma is used to creSarulla Geothermal Power Plant
INDONESIAate steam to power turbines and generate power. INPEX has joined four geothermal power
projects (Muara Laboh, Rantau Dedap, Sarulla and Rajabasa) located on Sumatra Island, InSumatra Island
Kalimantan Island
donesia. Among these, the Muara Laboh Geothermal Power Project, Rantau Dedap GeoMuara Labohthermal Power Project and Sarulla Geothermal Power Project, are in commercial operation.
Rantau Dedap
Geothermal
Geothermal
Combined, these projects provide a generation capacity of approximately 513 megawatts,
Power Plant
Power Plant
an output equivalent to what is consumed annually by the approximately 2.9 million houseRajabasa
Java Island
holds in Sumatra, Indonesia. Electricity generated by the plants using geothermal resources
Geothermalis planned to be marketed to Indonesian national power company PT PLN (Persero) overPower Plant
the period of about 30 years from the start of commercial operation. For the Rajabasa Geothermal Power Project, which is still in the exploration stage, surface and geophysical surveys have indicated a certain potential
for geothermal resources. If sufficient geothermal resources are located through exploration activities to warrant the development of the Project, this is expected to contribute to the further expansion of INPEX’s geothermal business in Indonesia.
Contract area
(block)Muara Laboh
Geothermal
Power Project
Rantau Dedap
Geothermal
Power Project

Berau BlockGas field
050km

Venture company(established)

In commercial
operation

SarullaGeothermal
Power Project

INPEX GEOTHERMAL,LTD.
(May 26, 2021)

INPEX Geothermal
Sarulla, Ltd.
(April 1, 2014)

Rajabasa
Geothermal
Power Project
Papua Province (Indonesia)

Project
statusUnder
exploration

Generation
capacity

Interest owned(*Operator)
PT Supreme Energy Muara Laboh*
85 MW (Share owned: INPEX GEOTHERMAL 30% Sumitomo Corporation
50% PT Supreme Energy 20%)
PT Supreme Energy Rantau Dedap*
98.4 MW (Share owned: INPEX GEOTHERMAL 27.4% Marubeni 27.4%
Tohoku Electric Power 20.0% PT Supreme Energy 25.2%)
Sarulla Operations Ltd.*(Share owned: INPEX Geothermal Sarulla 18.2525% Kyushu Electric
330 MW
Power 25% Itochu 25% Medco Energy International 18.9925%
Ormat Technologies 12.75%)

INPEX GEOTHERMAL,LTD.
(May 26, 2021)−

Business and Financial Overview

Venture company(established)
Preparation for development INPEX Masela, Ltd. (December 2, 1998)
Project status

MI Berau B.V., jointly established by INPEX and Mitsubishi Corporation, acquired an interestin the Berau Block in October 2001. In October 2007, MI Berau Japan Ltd., also a joint venture with Mitsubishi Corporation, acquired a stake in KG Berau Petroleum Ltd., effectively
increasing INPEX’s interest in the Tangguh LNG Project to around 7.79%. In March 2005, Indonesian authorities approved an extension of the PSC and project development plans for
the Tangguh LNG Project until 2035. Following development work, the first shipments of
LNG began in July 2009. The FID to expand the Tangguh LNG Project was made in July
2016. The Tangguh LNG expansion project will add a third LNG processing train, which iscurrently under construction, with production capacity of 3.8 million tons per annum, to theexisting two trains with production capacity of 7.6 million tons per annum. In addition, CCUS

42

Block 05-1b/05-1c (Sao Vang and Dai Nguyet Gas Field)** Production on the basis of all fields

The Abadi LNG Project is based on an onshore LNG development scheme that INPEX as
INDONESIA
the operator is preparing for development in the Masela Block offshore Indonesia. The
Arafura Sea
project is expected to produce approximately 9.5 million tons of LNG per year and up to
approximately 35 thousand barrels of condensate per day. The project will also supply 150
Abadi Gas Field
million cubic feet of natural gas per day via pipeline to address local demand for naturalgas. INPEX acquired a 100% interest in the Masela Block in November 1998 through an
open bid conducted by the Indonesian authorities. INPEX subsequently conducted exploTimor Sea
ration activities as the operator, discovering the Abadi Gas Field through the first explorAUSTRALIA
atory well drilled in 2000. Following exploration, evaluation activities and development
Gas field
studies, INPEX conducted Pre-FEED work from March to October 2018 based on an onDarwin
200km
0shore LNG development scheme envisaging an annual LNG production capacity of 9.5
million tons. INPEX submitted a revised plan of development in June 2019 and received
approval from the Indonesian authorities in July 2019. Alongside the approval of the revised development plan, the Indonesian authorities also approved an extension of the term of the Masela Block Production Sharing Contract (PSC) until 2055.
Detailed survey work in the planned construction site for the LNG plant and its surrounding areas had been underway until it
was suspended due to the impact of the COVID-19 pandemic. Subsequently, considering the need to contribute to a net zerocarbon society and aspiring to make the project cleaner and more competitive amid energy transition, INPEX has been consulting with the Indonesian authorities on a revised development plan introducing CCS and submitted that plan to the authorities in April 2023. INPEX is currently working toward making the FID in the latter half of the 2020s and commencing production in the early 2030s.

2

Crude oil: 6 Kbbld
MI Berau B.V.
Natural gas***: 1,145 MMcf/d (August 14, 2001)

Natural gas: 1.5 billion m3 per year
(expected)
Block 05-1b/05-1c In production
Crude oil and condensate: 2.8 million
bbl per year (expected)

Abadi LNG ProjectContract area
(block)MaselaIn production
Tangguh Unit

Interest owned(*Operator)
Ml Berau 22.856% BP* 48.0%
Nippon Oil Exploration (Berau) 17.144% KG Berau 12.0%
MI Berau 16.3% BP* 40.22% CNOOC 13.9%
Nippon Oil Exploration (Berau) 12.23% KG Berau 8.56%
LNG Japan 7.35% KG Wiriagar 1.44%

Management Foundation to Advance Growth Strategies

1

Venture company(established)

Growth Strategies for Value Creation

PALAU

Sarulla Geothermal
Project
Singapore

Production volume**

Berau

3

SK10

Project
status** Daily production volume on the basis of all fields and average rate of fiscal year ended December 31, 2022*** Not the volume at wellheads but corresponds to the gas volume sold to buyers

CAMBODIA

4
Geothermal Power
Projects in Indonesia

Contract area
(block)INPEX’s Vision and Value Creation

Southeast Asia

In productionis planned to be introduced in accordance with the development plan approved by SKK Migas in 2021, and this is expected tomake the LNG plant one of the cleanest in the world in terms of greenhouse gas emissions. The project also obtained government approval in December 2022 to extend the term of the PSC by 20 years to 2055.

PT Supreme Energy Rajabasa*(Share owned: INPEX GEOTHERMAL 31.50% Other 68.50%)

Other projects
Country

Contract area
(block)Indonesia

Sebuku Block

Malaysia

SK10

Malaysia

4E

Malaysia

SK418

Project
statusVenture company
INPEX South Makassar, Ltd.

In production JX Nippon Oil & Gas Exploration(Malaysia) Limited
Under
exploration

INPEX Malaysia E&P 4E Sdn. Bhd.
INPEX Malaysia E&P SK418 Sdn. Bhd.

Interest owned(*Operator)
INPEX South Makassar 13.5% Pearl Oil* 63% TotalEnergies 13.5%
JX Nippon Oil & Gas Exploration (Malaysia) Limited* 75%
PETRONAS Carigali 25%
INPEX’s share in JX Nippon Oil & Gas Exploration (Malaysia) Limited 15%
INPEX Malaysia E&P 4E Sdn. Bhd.* 52.5%
PETRONAS Carigali 40.0% PETROS 7.5%
INPEX Malaysia E&P 4E Sdn. Bhd. 40.0%
PETRONAS Carigali* 52.5% PETROS 7.5%
INPEX CORPORATION Integrated Report 2022

43

Yabase Oil Field

Project Overview by Core Business Areas

Akita PrefectureJapan

INPEX is active in the Minami-Nagaoka Gas Field in Niigata Prefecture, one of the largest of its
kind in Japan and operates a natural gas pipeline extending approximately 1,500 kilometers
and an LNG receiving terminal.
East Japan Station

Sekihara Gas Field(underground storage)

0

100km

Niigata City

Naoetsu LNG Terminal

Toyama Line

Nagaoka City

Minami-Nagaoka Gas Field

Joetsu City

Toyama Prefecture

Shin Oumi Line

Domestic
Natural Gas

Gunma
Prefecture
Fujioka BS*
Shin Tokyo Line

Karuizawa
Town

Yamanashi
Prefecture

Sodeshi LNG Terminal
Shizuoka Prefecture
Shizuoka City

Shizuoka Line
Gotemba City

Kofu City

Iruma Line

JoetsuShinkansen
Line

Kashiwazaki City

Sano City
Konosu City

Minami-Nagaoka
Gas Field
Ojiya City

Head Office (Akasaka, Minato-ku)
Ome City

SaitamaPrefecture
Metropolitan
Tokyo

Adachi-ku, Tokyo

Oil and gas fields

Minamifuji Line

Chiba City
Technical Research Center
Naruto Line
(Kitakarasuyama, Setagaya-ku)
Sammu City

Other project
Natural gas pipeline network*BS … Booster station

Naruto Gas Field[INPEX, Shizuoka Gas, Tokyo Gas]

In October 2022, INPEX made a FID on drilling operations and the construction of facilities associated with a demonstration
blue hydrogen and ammonia project to be implemented at the Higashi-Kashiwazaki Gas Field in the Hirai area of Kashiwazaki
City, Niigata Prefecture, Japan.
The project is expected to involve the transportation of natural gas produced at the INPEX-operated gas field in Niigata Prefecture to the Hirai area using an existing pipeline, and the production of 700 tons of blue hydrogen per year from that natural
gas at a hydrogen production facility to be newly constructed in the area. A portion of this hydrogen will be used to produce
blue ammonia, and the remaining hydrogen will be utilized for power generation. The CO2 generated during the production ofhydrogen will be separated, pressurized and injected in a subsurface gas reservoir in the Hirai area of the Higashi-Kashiwazaki
Gas Field, where gas production has alreadybeen terminated, as a Carbon dioxide CapWater Oxygen
Gas
HydrogenHydrogen powerture, Utilization and Storage (CCUS) initiative,
production
production
generation
thereby ensuring the production of blue hydrogen and ammonia and contributing toNatural gas
HydrogenElectricity
the low carbon movement. INPEX plans to
Pipelineoversee the safety of the CO2 injection proMinamiCO2 capture
cedure as well as monitor its effects.
NagaokaThis will be Japan’s first demonstration
Ammonia production
Gas Field
project integrating blue hydrogen and amNitrogenGasmonia production and usage, and one of theAmmonia
few in the world that have taken FID on theCOconstruction of an actual production plant,
where most of the blue hydrogen and amEGR*
monia production projects currently remainin the conceptual or planning stages. It is
Oil
Subsidized by NEDO
also an important project from the perspective of Japan’s energy security as it will proJoint research with JOGMEC
Higashi-Kashiwazaki
duce clean energy from domestically sourced
Gas Field Hirai areagas.
2

Joetsu LineGas field

Regasified LNG

Fuji City

Shinetsu
HonsenNagaoka City

Integrated Demonstration of Hydrogen and Ammonia Production and Usage inKashiwazaki City, Niigata Prefecture

Major office

Chiba Prefecture

Hirai hydrogen demonstration projectManagement Foundation to Advance Growth Strategies[Shizuoka Gas]

Showa
City

Ryomo Line

Honjo City

Kofu Line(underground storage)

Tochigi Prefecture

Chino City
Tomioka City

MitsukeCity

Sekihara
Gas Field

Tomi BS*

Matsumoto City

Nagano Prefecture

Echigo LineSea of JapanINPEX commenced exploratory onshore drilling operations at a location north of the INPEX-operated Minami-Nagaoka Gas
Field (Nagaoka City, Niigata Prefecture) in December 2022 and plans to continue drilling until around July 2023.
The aim of this drilling is to determine the extent of oil and natural gas deposits at the location.

Growth Strategies for Value Creation

Tokyo Line

Matsumoto Line

Niigata
Prefecture

Domestic Natural Gas/
Regasified LNG

Nagano City

Second Suruga Trunk Line

Minami-Kuwayama Oil Field

Kashiwazaki City

Itoigawa City

Toyama City

Minami-Aga Oil Field

INPEX’s Vision and Value Creation

Domestic Exploration Projects* EGR: Enhanced gas recovery

Geothermal Power Plant in Yuzawa City, Akita Prefecture
Domestic Natural Gas Business

44

INPEX CORPORATION Integrated Report 2022

(Reinjection plant)

Business and Financial Overview

In Japan, INPEX began natural gas exploration, development and production
activities in the 1950s and has continued production at the Minami-Nagaoka
Gas Field (Nagaoka City, Niigata Prefecture), one of the largest of its kind inJapan, since 1984. In 2013, INPEX commenced operation of the Naoetsu LNG
Terminal (Joetsu City, Niigata Prefecture), an LNG receiving terminal where thereceived LNG is re-gasified and then transported, combined with natural gas
produced at the Minami-Nagaoka Gas Field, to city gas companies and industrial customers through a natural gas trunk pipeline network stretching approximately 1,500 kilometers across the Kanto, Koshinetsu and Hokuriku regions.
Further, in October 2018, the Naoetsu LNG Terminal began receiving LNG
from the Ichthys LNG Project, which INPEX operates for LNG production inAustralia, starting with the first LNG cargo shipped from the Project. This has
served to further strengthen INPEX’s natural gas supply capacity and stablesupply framework, enabling INPEX to play a role in the global gas value chainthat links overseas gas sources and the Japanese gas market.
In the Japanese market, customers now have diverse needs, including thosefor solutions to deal with soaring energy prices, initiatives conducive to a net
zero carbon society and measures to strengthen their resilience. INPEX addresses such needs by making proposals for the introduction of carbon neutral
gas and the installation of photovoltaic power generation facilities with future
onsite methanation and hydrogen supply in mind, in addition to conversion
from other fuels to gas. Efforts are also made to help city gas providers serving
as gas wholesalers by supporting their initiatives to respond to local expectations and needs through our INPEX 4U Challenge Lab, and to promote theelectric power sales business, including the microgrid business conducive to
localized energy production and consumption and reinforcing resilience. At
the Naruto Gas Field in Chiba Prefecture, natural gas is being produced fromwater-soluble gas fields. In addition, after extraction of the natural gas fromunderground water (brine water), the brine water is used to produce iodine,
which is exported to Europe, the United States and elsewhere.

In June 2022, INPEX, Idemitsu Kosan Co.,Ltd. and Mitsui Oil Exploration Co., Ltd. decided to enter into the construction phase of ageothermal power plant (Katatsumuri Yama Power Plant, output: 14,990 kW) in the Oyasu district of Yuzawa City, Akita Prefecture.
The power plant will be built halfway up Katatsumuri Yama mountain and is scheduled to commence operations in March 2027.

(Production plant)

LNG tanker entering the Naoetsu LNG Terminal(Production/Reinjection plant I)

Natural Gas Sales Volume in Japan
Note: 41.86 MJ per 1 m

17.5 18.0 17.9 17.5

19.1(100 million Nm/year)

Cooling tower

21.2 21.7

20.7

22.0 22.0(Power generation plant)(approx. 13 m high)Katatsumuri Yama Power Plant facilities

15.1(Material storage)

Power generator
building(approx. 10 m high)Goto City Offshore Wind Power Generation Project in Nagasaki Prefecture

2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2019/12 2020/12 2021/12 2022/12(9 months)

A consortium led by TODA CORPORATION and in which INPEX participates was selected as the business operator of a floating
offshore wind power project off the coast of Goto City, Nagasaki Prefecture in June 2021. This is the first time for INPEX to be involved in an offshore wind power project in Japan, and construction is in progress toward the targeted commencement of commercial operation in 2024.
INPEX CORPORATION Integrated Report 2022

45

1-b

2

Project Overview by Core Business Areas
In production

Under exploration

Renewable energy project
INPEX Idemitsu Norge AS
Key group company headquarters and offices

3 Offshore Wind Power
Generation Businessin the UK
1-a

FINLANDSWEDENNORWAYOslo

In Europe, our focus is placedon the upstream business in
Norway and other areas, aswell as wind power projects in
the Netherlands and the UK.

ESTONIALATVIA
LITHUANIAUNITED
KINGDOM
LondonGERMANYBELARUSPOLANDCZECH REP.

2 Offshore Wind Power Generation
Business in the Netherlands

1-cPL1130UKRAINE
PL1194100km

PL882B

Contract area
(block)Luchterduinen (Q10)

PL1016

PL1133

PL1170PL537*

PL1153

PL609*
PL609B*
PL609D*

PL636
PL636B
PL636C
PL090C
PL090JS*

PL293B*
PL293CS*Blocks where oil/gas accumulations
were confirmed
60km

0PL090B
PL090F
PL090G*Blocks where oil/gas accumulations were confirmed
0

100km

PL090
PL090E
PL090I*

PL11793

In January 2022, INPEX acquired 50.5% of shares in Idemitsu Snorre Oil Development Co., Ltd. (new corporate name: INPEX
Norway Co., Ltd.), which had been held by Idemitsu Kosan Co., Ltd. and Osaka Gas Summit Resources Co., Ltd. Through its
wholly owned Norwegian subsidiary INPEX Idemitsu Norge AS (IIN), INPEX Norway currently owns 10 oil and gas assets in production, including the Snorre Project, as well as interests in multiple promising discovered but undeveloped oil and gas fields
and exploration licenses. The new addition is expected to help optimize INPEX’s upstream business portfolio. The Snorre Project, IIN’s flagship asset, is drawing approximately 35% of the electricity required for the production operations from the Hywind
Tampen floating wind farm.

PL089

Country

VigdisTordisNorwayStatfjord
60km©Equinor

Rendering of Hywind Tampen as viewed from theplatform, upon completion

PL089

46

Shareholders
Ocean Winds 56.6% China Three Gorges Corporation 10%
DGL* 33.4%**

Other projects

Snorre

Sygna

PL057

Moray East
Offshore Wind FarmContract area
(block)PL090, PL090E
PL090B
PL090GIn production (Fram)In production (Byrding)
In production (Fram H-Nord)

PL090CIn production (Vega)

Project status

Venturecompany

Interest owned(*Operator)
INPEX Idemitsu Norge AS 15% Equinor* 45% Vår 25% Neptune 15%
INPEX Idemitsu Norge AS 15% Equinor* 70% Neptune 15%
INPEX Idemitsu Norge AS 40% Equinor* 45% Neptune 15%
INPEX Idemitsu Norge AS 15% Wintershall Dea* 45% Spirit 25%
Neptune 15%

In production (Duva), under
INPEX Idemitsu Norge AS 30% Neptune* 30% PGNiG 30% Sval 10%
exploration
Development scenario
INPEX Idemitsu Norge AS 10% Equinor* 35% Lundin 35% Petoro
PL537, PL537B
studies ongoing (Wisting)
20%
Under development study
INPEX Idemitsu Norge AS 20% Neptune* 45% Petrolia NOCO 20%
PL882, PL882B(Dugong), under exploration
Concedo 15%
Under development study
PL090IINPEX Idemitsu Norge AS 15% Equinor* 45% Vår 25% Neptune 15%(Blasto), under exploration
Under development study
INPEX Idemitsu Norge AS 40% Equinor* 40% Neptune 15%
PL090JS(Grosbeak)Wellesley 5%
INPEX
Under development study
INPEX Idemitsu Norge AS 10% Equinor* 51% DNO 29%
PL293B, PL293CS
Idemitsu(Kveikje, etc.), under exploration
Longboat 10%
NorgeAS
PL318, PL318B, PL318C Under development study (Peon)
INPEX Idemitsu Norge AS 20% Equinor* 60% Petoro 20%
Under development study
PL609, PL609B, PL609D
INPEX Idemitsu Norge AS 15% Lundin* 55% Wintershall Dea 30%(Alta, Neiden)
PL090F
INPEX Idemitsu Norge AS 40% Equinor* 45% Other 15%
PL090HSINPEX Idemitsu Norge AS 15% Equinor* 45% Other 40%
PL1133
INPEX Idemitsu Norge AS 10% Lundin* 35% Other 55%
PL1153
INPEX Idemitsu Norge AS 30% Aker BP* 40% Other 30%
PL1170INPEX Idemitsu Norge AS 10% Lundin* 35% Other 55%
INPEX Idemitsu Norge AS 60% INPEX Idemitsu Norge AS*
Under exploration
PL1130
Other 40%
PL1016INPEX Idemitsu Norge AS 40% OMV* 60%
PL1129INPEX Idemitsu Norge AS 30% Wintershall Dea* 40% Lundin 30%
INPEX Idemitsu Norge AS 15% Equinor Energy AS* 45% Vår Energi ASA 25%
PL1179Neptune Energy Norge AS 15%
PL1194
INPEX Idemitsu Norge AS 30% OOMV (Norge) AS* 40% Vår Energi ASA 30%
PL636, PL636B, PL636C

PL057

Contract area
(block)Venture company(established)
INPEX Renewable Energy
In commercial Europe Limited
operation(November 17, 2021)

Moray Firth* Diamond Green Limited (intermediate holding company invested in by DGI)** DGI has a 16.7% stake

Oil field

0

Project
statusUNITED
KINGDOM

Business and Financial Overview

Gas field

INPEX Renewable Energy Europe Limited 15% Eneco 10%
Shell 20% Luxcara 10% Partners Group 25%
Swiss Life Asset Managers 20%

In March 2023, INPEX acquired a 16.7% stake in the Moray East Offshore Wind Farm,which is currently in operation in the Moray Firth, approximately 22 kilometers off thecoast Scotland in the UK. The acquisition was enabled through an agreement between
INPEX Renewable Energy Europe Limited (INPEX Renewable) and Diamond Generating
Europe Limited (DGE), a subsidiary of Mitsubishi Corporation registered in the UK, totransfer stock in Diamond Generating Europe Investments Limited (DGI) from DGE to
INPEX Renewable, which was established in the UK to promote INPEX’s renewable energy business in Europe. The Moray East offshore wind farm has been in commercial operation since April 2022 with an output scale of 950 megawatts produced by 100
9.5-megawatt units.
Contract area
(block)Snorre and Other Projects in Norway

INPEX Renewable Energy Europe Limited 50% Eneco 50%

Offshore Wind Power Generation Business in the UK

Moray East Offshore
Wind Farm

1

INPEX Renewable Energy
In commercial
Europe Limited
operation(November 17, 2021)

Shareholders

Management Foundation to Advance Growth Strategies

PL090HS

Venture company(established)

PL537B*

PL882*

PL057
PL089

Borssele III/IV (B34)

Project
statusGrowth Strategies for Value Creation

1-b

PL318C*
PL318*
PL318B*

Luchterduinen Offshore Wind Farm

PL112901-a

INPEX entered in December 2021 a stock transfer agreement with Diamond Generating Europe B.V. (DGE-NL), a Dutch registered,
wholly owned second generation subsidiary of Mitsubishi Corporation, and, after approval by concerned parties, acquired a 50%
stake in the Luchterduinen offshore wind farm in February 2022 and a 15% stake in the Borssele III/IV offshore wind farm in March
2022, both operating off the coast of the Netherlands. The Luchterduinen offshore wind farm is located 23 kilometers offshore
Noordwijk and has been in commercial
operation since September 2015 with
Luchterduinen Offshore
an output scale of 129 megawatts proWind Farm
duced by 43 3-megawatt units. The
UNITED
KINGDOM
Borssele III/IV offshore wind farm is located 22 kilometers off the coast ofWestkapelle and has been in commerNETHERLANDS
cial operation since January 2021 with
Borssele III/IV
an output scale of 731.5 megawatts
GERMANY
Offshore Wind Farm
BELGIUMproduced by 77 9.5-megawatt units.

INPEX’s Vision and Value Creation

Europe1-cOffshore Wind Power Generation Business in the Netherlands

Project status

Venture company(established)

INPEX Idemitsu
Norge AS
In production (Snorre, Tordis, Vigdis, (September 25,
1989)
Statfjord Øst, Sygna)
In production (Snorre)

INPEX CORPORATION Integrated Report 2022

Interest owned(*Operator)
INPEX Idemitsu Norge AS 9.6% Equinor* 31.0%
Petoro 30.0% Wintershall Dea 24.5% Vår 4.9%
INPEX Idemitsu Norge AS 9.6% Equinor* 41.5%
Petoro 30.0% Vår 16.1% Wintershall Dea 2.8%

INPEX CORPORATION Integrated Report 2022

47

Project Overview by Core Business Areas

1

3

INPEX’s Vision and Value Creation

Other Areas

BTC Pipeline Project

Stretching approximately 1,770 kilometers from Baku on Azerbaijan’s Caspian coast to Ceyhan in Turkey, the BTC pipeline has
been used to transport crude oil since its commencement of full-scale operation in June 2006. With a transport capacity of 1.20
million barrels per day, the pipeline mainly transports crude oil produced in the ACG Oil Fields in Azerbaijan.

Offshore North Caspian Sea Contract Area (Kashagan Oil Field and Others)

In September 1998, INPEX acquired an interest in the Offshore North Caspian Sea Contract Area in Kazakhstan’s territorial waters. The Kashagan Oil Field is located within this area in the Caspian Sea where the water reaches depths of 3–4 meters, approximately 75 kilometers southeast of Atyrau, Kazakhstan. The shipment of crude oil commenced in October 2016. INPEX andits partners have achieved the project’s initial production volume target of 370 thousand barrels per day and are currently working to increase the daily production volume to 450 thousand barrels.

Caspian Sea

GEORGIA

TbilisiBlack Sea

TURKEY

Baku
ARMENIAAZERBAIJAN
TURKEY

Kairan Structure

BTC Pipeline
IRAN

CeyhanCYPRUSSYRIA
Mediterranean Sea

Caspian Sea

0

IRAQ

200km

Pipeline

Aktote structure

Shipping terminal

Kashagan Oil Field
RUSSIA

Contract area
(block)KAZAKHSTAN

Oil field
Gas field
Block

TURKEY

0

CHINA

BTC Pipeline Project

IRAN

20km

Growth Strategies for Value Creation

KAZAKHSTAN

Offshore North Caspian
Sea Contract Area

RUSSIARUSSIA

INDIA

Venture company(established)
INPEX BTC Pipeline, Ltd.
(October 16, 2002)

Interest owned(*Operator)
INPEX BTC Pipeline 2.5% BP* 30.1% Azerbaijan (BTC) Limited 25%
MOL 8.9% Equinor 8.71% TPAO 6.53% Eni 5% TotalEnergies 5%
Itochu 3.4% ExxonMobil 2.5% ONGC 2.36%

Contract area
(block)Project
statusOffshore North CaspianSea

2

Venture company(established)

In production

Interest owned

INPEX North Caspian Sea, Ltd.
(August 6, 1998)

INPEX North Caspian Sea 7.56% Shell 16.81% Eni 16.81%
ExxonMobil 16.81% TotalEnergies 16.81% CNPC 8.33%
KMG 16.87%

ACG Oil Fields

INPEX acquired an interest in the Azeri- Chirag-Deepwater Gunashli (ACG) Oil Fields in the south Caspian Sea offshore Azerbaijan in April 2003. At the ACG Oil Fields, oil is being produced at the Chirag, the Central Azeri, the West Azeri, the East Azeri, theDeepwater Gunashli and the West Chirag locations. In September 2021, cumulative crude oil production reached 4.0 billion barrels. INPEX and its partners are working on development to commence production with a new platform in 2023.
Caspian Sea

AZERBAIJANManagement Foundation to Advance Growth Strategies

Offshore facility

Other projects
Country

Contract area
(block)Project status

Venture company

Interest owned(*Operator)

Brazil

BM-ES-23

Under exploration(blocks where oil/gas
accumulations wereconfirmed)

INPEX Petróleo Santos Ltda.

INPEX Petróleo Santos 15% Petrobras* 65%
PTTEP 20%

MexicoR2.4 Block 22 (Salina)

Under exploration

INPEX E&P Mexico, S.A. de C.V.

INPEX Petróleo Santos 35% Chevron* 37.5%
Pemex 27.5%

Iraq

Block 10

Under exploration(blocks where oil/gas
accumulations wereconfirmed)

INPEX South Iraq, Ltd.

INPEX South Iraq 40% Lukoil* 60%

RussiaSakhalin 1

RussiaZapadno-Yaraktinsky Block/Bolshetirsky BlockIn production

Sakhalin Oil and Gas*SMNG-Shelf and other (INPEX’s share in
Development Co., Ltd. (SODECO) SODECO 6.08%)
Japan South Sakha Oil Co., Ltd.
(JASSOC)JASSOC 49% INK* 51%
Share in JASSOC 24.998%

Baku

Business and Financial Overview

ACG Oil fields
Deepwater
Gunashli Field
Chirag Field
Azeri Field

KAZAKHSTANRUSSIAUZBEKISTANAZERBAIJAN

Oil field
Block
Pipelines

TURKMENISTAN
IRAN

50km

0

Offshore production facility

Contract area
(block)ACG

Project
status

Production volume**

In production Crude oil: 415 Kbbld

Venture company(established)

Interest owned(*Operator)

INPEX Southwest Caspian Sea, Ltd.
(January 29, 1999)

INPEX Southwest Caspian Sea 9.31%
BP* 30.37% MOL 9.57% SOCAR 25.00%
Equinor 7.27% ExxonMobil 6.79%
TPAO 5.73% Itochu 3.65% ONGC 2.31%** Production volume on the basis of all fields and average rate of fiscal year ended December 31, 2022

48

INPEX CORPORATION Integrated Report 2022

INPEX CORPORATION Integrated Report 2022

49

Management Foundation to Advance Growth Strategies

Sustainability

Sustainability Governance Structure
operational-level members from various divisions to support Group-wide, cross-sectional consultation.
General Meeting of Shareholders

Board of Directors

INPEX Advisory Committee

Management Committee

We are committed to accurately identifying and assessing the complex and diverse risks inherent in our business environment and establishing appropriate risk
prevention and mitigation measures and systems to
manage these risks. In addition to preparing for largescale natural disasters and epidemics, we also addressrisks related in the business environment—such aschanges to economic and social conditions or laws andregulations—as well as risks that exist in each process ofour business, including in the areas of exploration, pro-duction, transportation, and sales. We have establishedinternal controls under Japan’s Financial Instruments
and Exchange Act—known as “J-SOX”—based on the
COSO* framework, and each business division also conducts risk management related to occupational health,safety, and environmental protection under our HSE
Management System. Additionally, we analyze the impact of fluctuations in oil prices and foreign exchange
rates on our net income and disclose this information at
every financial result briefing.
*COSO: The Committee of Sponsoring Organization of the Treadway Commission

Audit &
Supervisory Board

Growth Strategies for Value Creation

Nomination and Compensation
Advisory Committee

Our Policy

Risk Management Structure
Board of Directors

Sustainability Committee

Sustainability
Working Group

Compliance Committee

Information Security
Committee

Corporate HSE Committee

INPEX Value Assurance
System (IVAS) Committee*

Climate Change
Strategy
Working Group* INPEX Value Assurance System: A committee that supports INPEX’s project
promotion and value enhancement decision-making process

Exercise adequate supervisory functions and ensure fairness
and transparency in management

Long-term Strategy andMedium-term Management PlanINPEX Vision @2022

Nomination and Compensation Advisory Committee
INPEX Advisory Committee

Feedback

Compliance Committee
Sustainability Committee
Corporate HSE Committee

Information Security Committee
IVAS (INPEX Value Assurance
System) Committee

Department Level Action Plans andFiscal year plans & targets

Management Foundation to Advance Growth Strategies

Corporate Level Action Plans

Approval

We have been a signatory to the United Nations Global Compact since 2011 and declared our support for its Ten
Principles in the four areas of human rights, labor, the environment, and anti-corruption. Since 2012, we have been
participating in activities of the various sustainability-related subcommittees set up by the Global Compact Network
Japan.

ReportingExecutive Committee
Discuss and decide plans for comprehensive management
and actions for material risks

United Nations Global Compact

Approval

Chaired by the INPEX Representative Director, President& CEO, our Sustainability Committee was established toclearly communicate our executive management’s vision
for sustainability, discuss basic policies for sustainability,and promote Group-wide and systematic sustainability
practices. The members include Representative Directors, the head of the General Administration Division,and the head of the Corporate Strategy & Planning Division (Vice-chair of the Sustainability Committee). The
Chairs of our Compliance Committee and Corporate
HSE Committee also attend the meetings to facilitate
collaboration with their respective committees. The Sustainability Committee met twice in FY2022, and the matters addressed at those meetings were also discussed at
Executive Committee and Board of Director meetings.
Under the Sustainability Committee, we have established a Sustainability Working Group and Climate
Change Strategy Working Group, which each comprise

Risk Management

INPEX’s Vision and Value Creation

INPEX’s basic approach to sustainability management is to promote both a stable supply of energy andenergy transition initiatives, and address climate change and other sustainability issues through ourbusiness and value chains. Our sustainability management activities focus on the issues of greatest
importance to our business and our stakeholders—our Material Issues.

Engaging with Industry Associations

We have identified six of the seven core sustainability
themes in ISO 26000 as areas of high importance for INPEX and our stakeholders, and these form our MaterialIssues. Our materiality assessments are conducted on
the basis of double materiality, whereby we identify andprioritize issues that may have a significant impact not
only on our sustainability as a business, but also on external stakeholders or the environment. We have also
identified priority actions (Key Tasks) for each MaterialIssue area and embedded these Key Tasks into our
PDCA cycle to enable continuous improvement. In
2017, we reviewed and revised each Key Task through afour-step prioritization process (1. Issue identificationand gap analysis; 2. Stakeholder dialogue; 3. Issue prioritization; and 4. Management review). This review also
incorporated the perspective of the United Nations
Sustainable Development Goals (SDGs). In March 2022,

50

Plan

Risk identifcationDo

Risk action/management

Check

Risk analysis/assessment

Risk monitoring/reporting

Sustainability Material Issues

Major Business Risks
Governance Compliance

HSE

Local
Communities

ClimateChangeHumancapitalwe reviewed our Key Tasks based on conversations withmajor stakeholders that had been conducted together
with the announcement of our Long-term Strategy andMedium-term Business Plan (INPEX Vision @2022) previous month. Our Material Issues and Key Tasks are reviewed annually through engagement with internal andexternal stakeholders. The results are approved by the
Sustainability Committee chaired by the Representative
Director, President & CEO and reported to the Board of
Directors.

Please see pages 52 to 55 for more on Targets and Achievements of Sustainability Material Issues
INPEX CORPORATION Integrated Report 2022

Organize risk management system/documents

Business and Financial Overview

Sustainability Material Issues

Departments and subsidiaries

ActionTo support our business and sustainability objectives, INPEX is an active member of the International Association of Oil &Gas Producers (IOGP), Australian Petroleum Production & Exploration Association (APPEA), and Ipieca. Within Japan, weare members of the Japan Petroleum Development Association, Japan Natural Gas Association and Japan Gas
Association to ensure the sound development of the industry and a stable energy supply. Other initiatives in which weparticipate include the Extractive Industries Transparency Initiative (EITI) and Challenge Zero (Challenge Net Zero Carbon
Innovation), an initiative led by the Japan Business Federation (Keidanren).

1. Characteristics and risks of the oil and natural gas
development business(1) Risks of disasters, accidents, system failures, etc.
(2) Risk of failure in exploration, development or production(3) D ependence of production volume on specificregions and mining areas(4) Risks related to contract deadlines, etc.
(5) Risk of change in reserves of crude oil, condensate,
LPG, and natural gas(6) Operatorship-related risks(7) Risks related to project partners(8) Risk attributable to a large capital investment andlengthy period of recovery of funds for the oil andnatural gas development business(9) Risks related to future abandonment
Financial Results Investor Meeting Materials:

2. Impact on financial results from fluctuations in crude
oil prices, natural gas prices, foreign exchange
rates, and interest rates(1) Impact on financial results from fluctuations in oil
prices and natural gas prices(2) Impact on financial results from fluctuations inforeign exchange rates(3) Impact on financial results from fluctuations ininterest rates
3. Climate-related risks(1) Policy and regulatory risks(2) Technology and market risks(3) Financing risks(4) Physical risks
4. Country risks in overseas business
https://www.inpex.co.jp/english/ir/library/presentation.html
Please see pages 94 to 100 for more on Business Risks
INPEX CORPORATION Integrated Report 2022

51

Sustainability
INPEX’s Vision and Value Creation

Sustainability Material Issues: Targets and Achievements
Material issues

Key tasks

FY 2022 achievements

FY2023 targets
 nhance the corporate governance structure through appropriate operation of the Board of Directors, andE
evaluate the effectiveness of the Board of Directors and continue the PDCA cycle
Respond to revisions of the Companies Act and the Corporate Governance Code, and to Tokyo Stock Exchange reforms
Build relationships between the Board of Directors and local stakeholders, such as partners and local communities (including holding Board of Directors meetings in countries in which we operate)

Published a skill matrix for Directors
Introduced and implemented a new system of officer compensation aligned with key goals of the Medium-term Business Plan
Discussed the nomination and compensation of Directors with the appropriate involvement of the Nomination and Compensation Advisory Committee

Publish a skill matrix for Directors and Audit & Supervisory Board Members
Enhance training, etc. for newly appointed officers
Discuss the nomination and compensation of Directors with the appropriate involvement of the Nomination and Compensation Advisory Committee

 trengthened management of global tax risks, arising out of overseas sites’ operations and cross-borderStransactions, through appropriate operation of the tax governance structure

Assess state of tax compliance in each country through centralized management of tax information

Held 10 INPEX Value Assurance System (IVAS) Committee meetings
Provided the Board of Directors with an executive summary of risk assessment results for major projects

Hold 25 IVAS Committee meetings
Provide the Board of Directors with an executive summary of risk assessment results for major projects

Held two Information Security Committee meetings
Held two training sessions on targeted email attacks
Conducted an e-learning lesson on information security
Conducted a security assessment of operating systems

Hold two Information Security Committee meetings
Hold two training sessions on targeted email attacks
Conduct an e-learning lesson on information security
Conduct a security assessment of operating systems

 romoted head office-based business continuity management (BCM) activities for earthquake scenarios,Pand provided BCM education and training for employees
Implemented and operated a COVID-19 crisis response structure under the Corporate Crisis ManagementTeam romote head office-based BCM activities for earthquake scenarios, and provide BCM education andPtraining for employees
Revise the head office business continuity plan (BCP) for infectious disease scenarios based on examination and assessment of COVID-19 responses

Supply chain risk
management

 ublished Supplier Code of Conduct
PContinued self-assessment surveys (including questions on human rights and anti-bribery and anti-corruption (ABC) measures) by major domestic suppliers and contractors
Continued risk assessment of major suppliers and contractors (including with regard to human rights and
ABC measures), and improved the methods used for risk assessment
Participated in the supply chain subcommittee of the Global Compact Network Japan ontinue self-assessment surveys (including questions on human rights and ABC measures) by major doC
mestic suppliers and contractors
Continue risk assessment of major suppliers and contractors (including with regard to human rights and
ABC measures), and improve the methods used for risk assessment
Participate in the supply chain subcommittee of the Global Compact Network Japan trengthen supply chain risk assessment andScompliance

Respect for humanrights ublished respective FY2021 statements pursuant to the United Kingdom Modern Slavery Act 2015 andP
the Australian Modern Slavery Act
Continued to conduct human rights training
Continued risk assessment of major suppliers and contractors (including with regard to human rights), andimproved the methods used for risk assessment, together with the procurement departments and departments responsible for sustainability

 ublish respective FY2022 statements pursuant to the United Kingdom Modern Slavery Act 2015 and theP
Australian Modern Slavery Act
Continue to conduct human rights trainingImprove the methods used for risk assessment of major suppliers and contractors (including with regard tohuman rights)

Compliance withlaws andprevention ofbribery andcorruption

 nsured awareness of compliance and enhanced education and training programs (e-learning lessons,Ecompliance awareness surveys and training based on the survey results, response to revisions of the Whistleblower Protection Act, etc.)
Bolstered global compliance structures (continued operation of the INPEX Global Hotline, etc.)
Ensured awareness and enhanced operation of ABC regulations (continued training, due diligence, risk assessments of ABC practices at domestic and overseas offices, etc.)

 nsure awareness of compliance and enhance education and training programs (e-learning lessons, officerEtraining, compliance assessments, etc.)
Bolster global compliance structures (continued operation of the INPEX Global Hotline, etc.)
Ensure awareness and enhance operation of ABC regulations (continued training, due diligence, risk assessments of ABC practices at domestic and overseas offices, etc.)

 ully comply with and appropriately respondF
to the laws and regulations, including ABC
laws, of the areas in which we operate, judicial/administrative sanctions, international
norms and ethics, and full respect for humanrightsContinue human rights due diligence

Promotion of climatechange response
goals and disclosures
based on TCFD
recommendations

 ontinued to achieve a CDP Climate Change A- score
C
Reduced net carbon intensity in FY2022 to 28kg-CO2e/BOE
Achieved methane emissions intensity (methane emissions / natural gas production) of 0.05%, which was
below our target of about 0.1%

Continue to achieve a CDP Climate Change A- score
Reduce net carbon intensity by 10% (4.1kg-CO2e/BOE) or more between FY2022 and FY2024
Check details of emissions reduction measures in individual projects for achieving the FY2030 target fornet carbon intensity

GovernanceImprovement of
our riskmanagement
structure ade final investment decision (FID) for drilling wells and constructing aboveground facilities for the inteM
grated verification trial of hydrogen and ammonia production and use in Kashiwazaki City, Niigata Prefecture, Japan.
Conducted joint research on commercial feasibility of clean ammonia production in Abu Dhabi
Currently working with a local power generator in Australia to conduct a study on hydrogen export and hydrogen-based methanation

Climate change

CCUS
Promotion of five
net zero businesses egan well drilling for a CO2 EOR verification trial in the Minamiaga Field Office and completed work in
B
January 2023
Awarded rights to operate G7-AP offshore GHG assessment block in Northern Territory, Australia
Participated in the CCS Long-Term Roadmap Study Group, organized by the Ministry of Economy, Tradeand Industry, and in developing a framework for commercialization of CCS in Japan

Renewable energy
Wind power generationJ oined Luchterduinen and Borssele III/IV offshore wind power projects in the Netherlands
Established the London office of INPEX Renewable Energy Europe Limited, a subsidiary in the United
Kingdom in charge of wind farms in Europe, which was established in November 2021, and began workthrough this officeBegan construction for floating offshore wind power project off Goto City, Nagasaki Prefecture, Japan

Geothermal power generation

Acquired new concessions at Muara Laboh Geothermal Power Project in Indonesia
Opened Jakarta office of INPEX Geothermal, Ltd.
Made FID for Oyasu Geothermal Power Project, Akita Prefecture, JapanINPEX CORPORATION Integrated Report 2022

Hydrogen and ammonia
 e are currently procuring materials and equipment for ground preparation, CO2 injection, production,Wand observation well drilling for the hydrogen and ammonia production demonstration project in Kashiwazaki City, Niigata Prefecture, Japan. Our plan is to begin operations in 2025.
Continue to study the commercialization potential of a clean ammonia production project in Abu Dhabi
Consider and launch new projects in Japan and overseas

CCUS onduct injection testing in FY2023 for a CO2 EOR verification trial in the Minamiaga Field Office and conC
sider moving to the next phase
Consider and launch new projects in Japan and overseas
Progress assessments and other preparations to introduce CCS at Ichthys LNG

Renewable energy
Wind power generation

 rogress development of offshore wind power business, and construction for floating offshore wind powerP
project offshore Goto City, Nagasaki Prefecture, Japan
Ensure stable operations and expand business at European wind power projects
Generate business opportunities in Southeast Asia, Australia, and the United States

 educe net carbon intensity by 30% or moreR
by FY2030
Achieve zero routine flaring by FY2030
Maintain methane emissions intensity (methane emissions / natural gas production) at its
current low level (about 0.1%)

Business and Financial Overview

Targets to FY2024

FY2022 achievements
Hydrogen and ammonia

 ontinue to monitor mitigation/management
Cplans for material risks and issues identified
by each division under the Medium-term
Business Plan and their implementation

Management Foundation to Advance Growth Strategies

Compliance trengthen the corporate governance strucSture, including enhancement of the supervisory role of the Board of Directors
C ontinue to deepen discussions by the
Nomination and Compensation Advisory
Committee toward achieving further diversityof the Board of Directors, and provide feedback on those discussions to the Board
Enhance discussions on management strategies based on INPEX Vision @2022, its associated Medium-term Business Plan, andanticipated future business development,
and monitor the progress made

Growth Strategies for Value Creation

 nhanced our corporate governance structure through appropriate operation of the Board of Directors,Eand evaluated the effectiveness of the Board of Directors and continued the PDCA cycle
Responded to revisions of the Companies Act and the Corporate Governance Code, and to Tokyo Stock
Exchange reforms

Improvement ofour governancestructure

52

Medium- to long-term targets,
initiatives, and directions

Targets to FY2030
Commercialize three or more projects
Aim for hydrogen and ammonia production
and supply of 100,000 tons/year or more

 chieve annual CO2 injection volume of 2.5
A
million tons or moreB ecome a leading company in CCUS bypromoting technical development andcommercialization
 ecure 1–2 gigawatt-scale installed capacity,Smainly in the offshore wind and geothermal
power generation businessAccelerate business expansion using assets
acquired through M&A and other means as aplatform

Geothermal power generation

Carry out additional development at Muara Laboh Geothermal Power Project in Indonesia
Progress construction for Oyasu Geothermal Power Project
Progress exploration of geothermal energy in other regions, including Indonesia and JapanINPEX CORPORATION Integrated Report 2022

53

Sustainability

Key tasks

FY 2022 achievements

FY2023 targets

Targets to FY2024

FY2022 achievements
Carbon recycling and new business

Promotion of five
net zero businesses

Forest conservation

Australia: Aim to further increase the current LNG production capacity to build a structure capable of stably producing 9.3 million tons per year at the Ichthys LNG ProjectAbu Dhabi: Aim to further reduce production costs by optimizing personnel allocation and introducing
new technologies, and supply offshore facilities with clean powerNorway: Promotion of low-carbon business by starting power generation at the Hywind Tampen floating
wind farm and power provision to the Snorre oil field and the pursuit of the potential for reducing CO 2
emissions from oil and gas production plants by using power supplied from onshore hydroelectric power
generation
Expanded the volume of carbon neutral gas soldIncrease gas ratio of portfolio by raising gas
investment ratio to about 70%
Make our projects cleaner by achieving zeroroutine flaring, introducing carbon capture,
usage, and storage and renewable electricity,
conserving energy, utilizing forestation credits, etc.

Prevention of major
incidents

 educed the number of incidents by: issuing incident bulletins; drawing lessons from incidents; statisticallyR
analyzing and benchmarking incidents; strengthening incident cause investigation; promoting the introduction of safety leading indicators; and conducting interviews with contractors and developing safety
moments in relation to Life-saving Rules (LSRs) to expand activities to not only operational organizations
but to contractors, domestic subsidiaries, INPEX Technical Research Center, and Akasaka Head Office aswellEnhanced process safety and asset integrity management by conducting HSE reviews and providing technical support (bowtie analyses, safety case reviews, etc.) at operator projects, and by commencing measurement and monitoring of Tier 3 and Tier 4 leading indicators

 trengthen incident prevention efforts by: issuing incident bulletins; drawing lessons from incidents; andSpromoting LSRs, other internal campaigns, and the introduction of safety leading indicators
Further improve process safety management through systemic programs by: conducting HSE reviews andproviding technical support (bowtie analyses, safety case reviews, etc.) at operator projects and commencing measurement and monitoring of Tier 3 and Tier 4 leading indicators)
Implement HSE risk management and HSE management for the five net zero businesses

Securing ofoccupational healthand safety trengthened HSE management at worksites by: formulating/implementing an action plan based on theS
results of the HSE culture survey; reinforcing coordination between corporate divisions and operator projects; and holding an HSE Forum to share good practices and issues
Strengthened health management by: driving the creation of a health management activities platform; anddeveloping COVID-19 Risk Screening for Overseas Travelers to review risks for traveling on business trips
as a response to COVID-19

 emonstrate HSE leadership by: implementing an action plan based on the results of the HSE culture surD
vey; reinforcing coordination between corporate divisions and operator projects; and holding an HSE
ForumStrengthen health management by: standardizing health management activities; strengthening mental
health management; and standardizing infectious disease management

 nsure compliance with LSRs for safety inEhigh-risk operations, strengthen process
safety management, and completely eliminate major incidents
C arry out actions that help improve HSEmanagement(1) Senior management executives demonstrate HSE leadership(2) Contribute to carbon-reduction projects
through HSE management(3) Perform thorough risk management(4) Strengthen incident prevention efforts(5) Prevent leaks from facility processes(6) Prepare for emerging threats(7) Help to address global environmental
challenges and create environmental
value(8) Reinforce infection control measures

Water risk management
Established and published our water risk management policy and commitment
Updated water stress assessments in project areas
Assessed the current state of water balance and aggregated/analyzed data on the volume of freshwater/seawater intake and use in our projectsJapan aintained positive relationships with stakeholders through continuous dialogue, including appropriate
M
response to inquiries from local communities and publication of newsletters

Australia
 aintained positive relationships with government agencies, industry groups, and local stakeholders
Mthrough more than 300 dialogues

GlobalInvested approximately 30 billion yen in social contribution initiatives

Contribution to
local economies

Australia
 chieved targets set in Reconciliation Action Plan (RAP) 2019–2022 , and develop the next plan for RAP
A
2023–2025
Directly employed 49 Aboriginal and/or Torres Strait Islander people and indirectly employed about 100
people on average through contractors, as of the end of FY2022
Procured more than A$ 13 million of goods/services from 23 Aboriginal and/or Torres Strait Islander businesses from FY2019–FY2022

GlobalConsidered new measures for INPEX Values

Making INPEX thebest place to work

INPEX CORPORATION Integrated Report 2022

Japan
Adopted a job-focused personnel system for executives
Secured human resources by increasing recruitment of mid-career employees
Held third round of workplace COVID-19 vaccinations and expanded the headquarters occupational physician team

Biodiversity conservationIdentify risks and opportunities related to biodiversity
Consider establishing targets and making disclosures in compliance with requirements such as the Taskforce on Nature-related Financial Disclosures (TNFD)
Implement biodiversity conservation initiatives in project areas

Water risk management
Identify risks and opportunities related to water risk management
 onsider implementing initiatives and making disclosures in compliance with requirements such as theC
TNFD
Carefully examine water balance , and identify issues, in project areasJapan aintain positive relationships with stakeholders through continuous dialogue, including appropriate reM
sponse to inquiries from local communities and publication of newsletters

Australia
Maintain positive relationships with stakeholders through proactive dialogue

Business and Financial Overview

Implementation ofassessments ofimpact on local andindigenous
communities andmeasures to reduce
Local communities impact

Established and published our biodiversity conservation policy and commitment
Continued biodiversity conservation activities and monitoring by: conducting a survey of biodiversity in Japan, etc.
Updated the database of protected areas for project areas

Management Foundation to Advance Growth Strategies

 ustralia: Adopted measures to minimize flaring during production and fuel gas consumption at the IchA
thys LNG Project, and promoted low-carbon operations
Abu Dhabi: In addition to starting to use clean power at some onshore facilities, worked with the Abu Dhabi
National Oil Company to adopt clean power, including using onshore clean power to supply offshore facility
power needs
Norway: Commence power generation at the Hywind Tampen floating wind farm
Expanded the volume of carbon neutral gas sold

Biodiversity
conservation andwater risk
management54

 ecure about 2 million tons of forestation
S
credits per year from forest conservation
projects by FY2030 through project participation, development, etc.

 articipate in and pursue development opportunities for forest conservation projects
PAcquire about 1.5 million tons of forestation credits per year from leading forest conservation projects

Biodiversity conservation

Human capital

Forest conservation

Targets to FY2030
 romote the adoption of methanation inPsocietySupply about 60,000 tons of synthetic methane annually via our pipeline network

Continued support for Indonesia’s Rimba Raya Biodiversity Reserve REDD+ project
Created a forestation credit screening form (improved the process)Cleaner oil and gas
business andtransition to natural
gas

HSE

 onstruct a plant for planned 2025 launch of synthetic methane production as a methanation technical deC
velopment projectPursue further R&D in artificial photosynthesis
Use drones to inspect our facilities

Medium- to long-term targets,
initiatives, and directions

Growth Strategies for Value Creation

Climate change oved to EPC (engineering, procurement, and construction) work for methanation technical development
Mproject
Considered large-scale methanation facilities in Australia, etc.
Entered and won first prize, together with the University of Tokyo, in an international competition for artificial photosynthesis
Invested in CarbonOrO Holding, a company developing CO2 capture technologies
Conducted several test flights using drones to inspect our facilities

Carbon recycling and new business

INPEX’s Vision and Value Creation

Material issues

 ontribute to local development and the adC
dressing of social issues through our business activities, while respecting human rights
and the cultures and customs of the areas inwhich we operateU nderstand and respond to community
needs through dialogue with stakeholders in
the areas in which we operate

Global ontinue investment in social contribution initiatives in response to the needs of the local communities inCwhich we operate

Australia
Achieve targets set in RAP 2023–2025
Continue to implement our social contribution strategy

GlobalPromote INPEX Values
Resume opportunities for overseas office employees to be assigned to our headquartersJapan dopt a job-focused HR system and talent management system for regular employees and employeesAworking under reemployment contracts
Employ diverse human resources, including women, researchers, and highly specialized individuals
Overhaul the employee benefit program (introduce Cafeteria Plan)Implement programs and establish a corporate culture that cultivates employee satisfaction and engagement
E x p a n d s u p p o r t f o r e m p l o y e e c a re e rdevelopment
Create a workplace environment that supports needs for diverse workstyles and employee well-being

INPEX CORPORATION Integrated Report 2022

55

Sustainability

FeaturedContent1

Human Resources Strategy
INPEX’s Vision and Value Creation

Human Resource Development Curriculum

Message from the Director in Charge of Human Resources

Our Policy

Support for female employees andemployees with foreign nationalities toplay active roles at work
Promotion of the employment of LGBTQ+
community and persons with disabilities

Evaluation and Assignment

Workstyles
Responses to COVID-19
Introduction of work-from-homeand flextime without core time
Support for childcare and nursing
careTeam-building recognition award

Human Resource Development

Organization
Effectiveness

Focus on People
Development

Maximize teamperformance through HR
management process

Develop future leadersand global workforce
capability

INPEX HR Vision
Talent Attraction
and Engagement

HR
Excellence

Make INPEX the bestplace to work:“Employer of choice”

Support business strategy
with world-class
functional expertise

Career training and leadershiptraining
Sending of employees fromoperational sites in Japan to thoseoverseas
Development of selected employees

HR Systems and Measures
Introduction of job-focused HR
system (for executives)
Separate tracks for deeply
specialized experts and line
management
Introduction of one-on-one meetings

Health and Productivity
Management
INPEX Group Health Statement
Support for employees with cancer
or incurable diseases to continue
working
Recognition under the Health &Productivity Stock Selection basedon promoting health andproductivity management measures

Human Resource Development
Our training curriculum is designed to help employees develop the required skills and mindset to work in a large energy company and continue to contribute to our business overthe long term. Group training, practical training (primarily
through overseas visits or appointments), selective training
to develop next-generation leaders, and e-learning focusedon developing business knowledge are the principal modesof delivery. In FY2022, we overhauled our training regime

56

INPEX CORPORATION Integrated Report 2022

Enhancing organizational
capabilities

Advancing the individual
On-site training atother locations
Training in Japanand overseas

Business knowledge
training
Globis Unlimited

Skills related to
specialist fields
Internal and externalseminarsOn-the-job training
Training for new graduates
in technical fields

Business strategy
Marketing
Organization management
Accounting
Finance
Critical thinking
EF English Live
Improving English
proficiency

Career training

Leadership training

Career Development
Seminars∙Workshop (WS)
Career 50WS
Career 40WS
Career 30WS
Life Shift/Life Plan

with an emphasis on autonomy and leadership. Besides
commencing leadership training for a wide range of employees so that everyone can demonstrate leadership, we also
encourage each employee to pursue career autonomy, suchas by strengthening support for line managers, who form the
backbone of the organization.

Leadership I
Leadership II
Leadership III
Leadership IV

Training for
promoted employees
Newly appointed generalmanagers
Manager follow-up
Newly appointed managers
Before promotion to leader
positionOn selection basis
ALP
BLP
Study overseas
GSE overseas personnel
development system
Leadership training for
women

Support for younger employees
Third-year follow-up training
Second-year follow-up training
First-year follow-up training
Group training for new graduates OJT
Mentoring/supporter systems

D&I training
Women’s advancement
Unconscious biasLGBT

Organizational culture reform
Psychological security

Well-being

Communication

Developing Next-generation Leaders
In FY2021, we launched our Breakthrough Leadership Program (BLP)1, a selective leadership development programfor young employees. Additionally, in FY 2022, we launched
the Advanced Leaders Program (ALP)2 for executives. Bothprograms are designed to nurture transformational leaders(candidates for future executive roles) who will ultimately be
responsible for managing the Company. Both programs are
optional and selected from the employees who wish to takeup the challenge.

In Australia, a leadership development program waslaunched in FY2022. Approximately 300 team leaders andmanagers have participated in the three-day training program aimed at instilling the qualities and behavioral attributes expected of leaders.

1 Breakthrough Leadership Program (BLP): A program lasting up to five years and tailored based on the experiences of each selected employee to accelerate their development by strategically and deliberately subjecting them to an intensive series of tough assignments (including more sophisticated tasks, leadership positions, and jobs
at different departments) over a short time frame.
2 Advanced Leaders Program (ALP): A program that aims to develop leaders with strong foundations and rich ideas through participation in management and businessprograms in Japan and overseas and engagement with other companies to learn the latest information, trends and problem-solving skills.

Our Recruitment Approach
INPEX is developing both its oil and gas business and its 5
net zero businesses and is actively recruiting both new graduates and mid-career professionals. Our mid-career hires areprimarily highly skilled engineers and experts with extensive
knowledge and experience in the 5 net zero business fields

Business and Financial Overview

Assignment of the right person to
the right position
Autonomous career development
through internal job posting andside job systems

Transparency
Fully sharing information about the organization’s
intentions, responsibilities, decision rationales, etc.

Management Foundation to Advance Growth Strategies

Our recruitment approach follows our Business Principles
and Code of Conduct specifying there will be no discrimination on the basis of race, skin color, gender, sexual orientation, gender identity, or age. Remuneration at INPEX isbased on the principle of “equal pay for equal work.” Forgeneral personnel, remuneration is tied to demonstrated
ability, and for executives, it is based on job grade—and inboth cases, without regard to gender.

Recruitment

Diversity

Agility
Making quick decisions and acting on them as thesituation demands

Personal development system
Support for acquiring qualifications

As a company operating across the world, INPEX views
workforce diversity and the development of a global workforce capable of sharing common values as important forsustainable and responsible business management. To
achieve these goals, our Human Resources (HR) Unit developed the INPEX HR Vision, comprising four key pillars. With
these four pillars at the core, we are working to create an internationally competitive organization by applying a global
perspective as we implement HR initiatives to develop our
personnel and improve team performance.

Strengthening of mid-career
recruitment (including recent graduates)
Active recruitment of female employees
through establishment of quota

Flexibility
Adopting and acting on new ways of thinking

Growth Strategies for Value Creation

At INPEX, we implement various HR initiatives to make INPEX an excellent place to work, using the INPEX HR
Vision and the INPEX Values as our guiding principles. We believe it is important to have HR policies and initiatives promoting flexible workstyles so that employees can make the most of their abilities
irrespective of age, gender, nationality and other factors. Moreover, our priority lies increating a workplace environment that promotes psychological safety and encourages
the uninhibited exchange of opinions and ideas.
To achieve the Long-term Strategy and Medium-term Business Plan set forth in INPEX
Vision @2022, we will need to further strengthen our organizaNobuharu Sasetional capabilities by encouraging each employee to pursue ca- Director, Senior Managing
reer autonomy. INPEX will further promote human resources Executive Officer, SeniorVice President, Generaldevelopment and investment in human capital.
Administrationthat our existing workforce would be hard pressed to acquire. We have also established a scheme enabling employees to undertake assignments in new business areas throughinternal job postings and an internal side job system.

HR Evaluation and Assignment
We strive to maximize performance across the organization by
ensuring employees treat the organization’s objectives—
based on objectives established at the division level—as theirown. We aim to inspire the highest level of employee motivation by having each individual outline the specific processes
leading to achievement of their own annual objectives, thereby reliably and efficiently contributing to the objectives of theorganization as a whole. Employees review their objectives
annually, and their degree of achievement of these objectives
is reflected in their individual performance evaluation.
An evaluation process based on the INPEX Values—thecommon values for all our executives and employees—is implemented at all sites, including in Australia and Indonesia.

One important criterion in the evaluation is the level towhich INPEX Values are demonstrated in daily operations.
This encourages employees with diverse backgrounds andvalues to share and be aware of the values they should haveas INPEX employees and to work together to achieve results
not only as individuals, but also as an organization. Employees are additionally given the opportunity once a year tostate the kind of work they would like to do or to request atransfer. We also have an internal job posting scheme designed to optimize job assignment from within the Company
while boosting employee motivation. In FY2022, out of 16
applications under the job posting scheme in head office, 11
employees were approved for transfers.
INPEX CORPORATION Integrated Report 2022

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FeaturedContent1

Human Resources Strategy

In addition, INPEX conducts employee stress checks andwork engagement surveys once a year. We ascertain themental and physical condition of each employee and analyze the state of their department to effect changes designed to create a workplace where all employees can thrive.
After the survey, we provide feedback to each department
and utilize our findings to improve the overall workplaceenvironment.

Collaboration

Global Engagement Survey

We rely on unity and team spirit tobuild strong professional working
relationships within INPEX as well as
within the communities in which we
operate.

Integrity

Ingenuity

We embrace initiative andinnovative problem-solving
at every level of INPEX andcelebrate our successes at
every opportunity.

SafetyAnzen dai ichi - ’Safety
Number One’ - is the way
we think, act and promote
safety at INPEX that forms
the core of a strong HSE
culture.

Diversity

We are ethical, honest
and trustworthy in ourbusiness relationships
and professional in our
conduct at all times.

We proactively embrace our individual differences which iscentral to who we are at INPEX and what makes a uniqueand welcoming workplace environment.

Promotion of Diversity

Number of Overall Employees and the ratio by Gender
Male (persons)Female (persons)Boundary: Consolidated

3,117

3,189

3,364

554
(17.8%)

609(19.3%)

611(19.2%)

667(19.8%)

2,563(82.2 %)

2,554
(80.7%)

2,578(80.8%)

2,697(80.2%)

2019/1258

3,163

2020/12INPEX CORPORATION Integrated Report 2022

2021/122022/12remains low. We therefore continue in our efforts to advancethe role of women at the Company. Besides appointing one
female Outside Director and one female Outside Auditor, weare steadily making progress, including the appointment of afemale Executive Officer promoted from within the organization for the first time in our history in March 2020.
*Non-Consolidated employees including seconded employees but excluding
the employees who are temporary transfer to INPEX

LGBTQ+
Within the Group, the term “diversity” refers to all differences
related to people or businesses, including sexual orientationand gender identity.
To promote understanding towards LGBTQ+ matters, wehave conducted an ongoing in-house training program since
FY2017, and in FY2018, held lectures for executives concerning
LGBTQ+ matters. Efforts have also been under way to upgradeinternal systems. In FY2020, employees were given the right torefuse requests to undertake business travel on the grounds
that they are LGBTQ+, and in FY2021, “family” was redefined
to include same-sex partners and their children under the Company’s benefit program. Employees are also encouraged tostart using names (including pronouns and titles) that reflect
their gender identity. In addition to an in-house LGBTQ+ consultation desk, we set up a second consultation desk managed
by outside experts in FY2022. Our continuing positive action inthese areas has won us recognition in Japan for our pioneering
efforts in the workplace. For two consecutive years, in FY2021
and FY2022, we received the Gold Award(the highest rating) in the PRIDE Index, Japan’s first index evaluating initiatives related
to LGBTQ+ and sexual minorities.

Support for Childcare and Nursing Care
We support work–life balance for employees who are either
parenting or providing care to family members, and have created a comprehensive support framework. Examples include:in Japan, payment of full salary for the first five days of childcare leave; payment of 20% of salary during childcare or nursing-care leave, which is above the legal requirement in Japan;
and payment of salary during sick/injured childcare leave or
nursing-care leave for up to five days per eligible child, whichis also above the legal requirement. Moreover, employees
may take leave during working hours regardless of the reason.
This includes flextime without core time, as well as workfrom-home arrangements, which have now become well established. The scheme offers a high degree of flexibility,
allowing employees with childcare or nursing-care responsibilities to work at different times of the day and for shorter
periods by combining the shortened work hours programwith flextime.
On top of these system-related initiatives, effort has also
focused on shaping positive attitudes through an ongoingtraining program for supervisors with staff who are raisingchildren, to ensure proper follow-up care by supervisors. We
also encourage male employees to participate in parenting
and post information on our intranet that explains the benefits of childcare leave for male employees and how the system works. As a result of these efforts, the percentage ofmales taking childcare leave is on an increasing trend. We
seek to establish an environment that supports childcare
leave and promote its understanding by measures such as
holding in-house briefings in accordance with the revision of
the Child Care and Family Care Leave Law as well as extending the eligibility of special leave for spouse’s childbirth (threedays of paid leave) to cover the period before and after the
expected due date and not just after childbirth.
Schemes to remotivate employees returning to work fromchildcare leave include discussion meetings prior to resuming work to help alleviate anxiety being faced by returning
employees, and allowing employees interested in improving
their skills while on leave to use the personal development
program. Those who return to work prior to their child’s firstbirthday may take two 30-minute nursing breaks per day,with pay, up to the day before the child turns one year old.
To assist employees raising children, there are childcare
support arrangements for children up to the age of three. In
addition, we have an agreement with a company-led nurseryschool to give enrollment priority to the children of company
employees, and we have also signed up with a childcare service provider.
In recognition of these initiatives, the Tokyo Labor Bureauof the Ministry of Health, Labour and Welfare rated INPEX
highly over the FY2018–2020 period as a company that

supports its employees to balance work with child-rearing,awarding us the next-generation certification known as Kurumin for a fourth time.
We also support a balance of work and nursing-care responsibilities by flexibly applying rules relating to nursing-care leave for those with elderly parents, even if they are
not officially certified care recipients.
Number of Employees Taking Advantage of Parental
Leave System by Gender
Male employees taking parental leave (persons)Female employees taking parental leave (persons)Boundary: Unconsolidated

39

26

29

24 26

36

38
16

2019/122020/122021/122022/12

Number of Employees Taking Advantage of Shortened
Working Hours for Childcare, and Flextime Work System
Male (persons)Female (persons)Boundary: Unconsolidated

35

37

33

3

2
2019/1248

Business and Financial Overview

In line with our basic policy on diversity and inclusion D&I (Diversity & Inclusion), we are intent on creating an environmentthat enables women to demonstrate their abilities to the full. In
Japan, we have drawn up a General Employer Action Plan
based on the Act on the Promotion of Women’s Active Engagement in Professional Life. Among other things, this plansets a target of hiring women to fill at least 25% of new graduate positions, a target that has been met each year over the five
years from FY2019 to FY2023. Another example of our efforts
was our hosting in FY2021 and FY2022 of a seminar for all executives and employees on the subject of unconscious bias, todeepen their understanding of unintentional bias related togender, encourage greater workplace diversity, and promote
the establishment of a foundation for advancing the role ofwomen within the Company. Our target was for women to fill
3% of management positions (as defined by our grading system in INPEX*) by March 31, 2023. As of that date, we hadachieved that target, with women filling 3.7% of management
positions. Going forward, we aim to lift this figure to 6% during
FY2025 through more intensive mid-career recruitment of women capable of performing management roles. In promoting or
appointing employees, we evaluate employees who are temporarily restricted in their work duties due to life events in an
appropriate manner so as to not impede career advancement.
In this way, women have become increasingly active in all
job categories in recent years, but we observe the level ofwomen’s involvement is still uneven across job categories andthe percentage of females in senior management positions

In FY2019, we started career training for employees aged 30,
40, and 50 years to understand the importance of career development and learn to design their own course for future
success and growth, using techniques such as self-reflection
and career experience inventory. Since FY2022, we also offer
career consultation by qualified personnel to employees
aged 55 years to support the autonomous career development of our senior employees.
In FY2019, we set up INPEX Solutions as a fully owned subsidiary within the Group. INPEX Solutions functions as a thinktank for the Group, conducting surveys and research as well as
providing support in consulting and talent development. Many
retired Group employees transfer to this company where they
can make use of their expertise, such as by passing on the
know-how they have accumulated during their career, or in exploring new business opportunities for the Company.

Management Foundation to Advance Growth Strategies

Promotion of the Advancement of Female Employees

We actively employ foreign nationals as we believe that diversity brings vitality to the workplace. To achieve inclusion—
which means to build workplace environments andinterpersonal relationships that contribute to businessthrough mutual respect and recognition—we provide relocation support services for foreign nationals, in particular those
who normally use English in their daily work, to minimize thechallenges they may experience living and working in Japan.
In addition, we prepare intranet postings and documents inboth Japanese and English, and offer weekly Japanese-language lessons with an external teacher.

Efforts to Engage Older Workers

Growth Strategies for Value Creation

We conducted a global engagement survey in 2019 on all
employees around the world and identified challenges in theareas of human resources allocation and deployment, compensation and recognition and productivity in the work environment. Based on the findings of the survey, we introduced
a new job-based HR system for managerial employees andare promoting improvement initiatives by providing employees with thorough feedback on performance evaluation.
In FY2022, we introduced a new job-based HR system for
managerial employees designed to clarify job descriptions,define a compensation system based on job responsibilities
and implement line-management succession planning andassociated training.

Employment of Foreign Nationals

INPEX’s Vision and Value Creation

We also established an internal side job system in FY2021,
providing opportunities for employees to take on new challenges across organizational or job-category lines. The
above are some of the initiatives adopted to revitalize theworkplace while creating an environment that enables employees to carve out their own careers. Concurrently, we run
a return-to-work program to welcome back motivated employees who had resigned from the Company due to unavoidable personal reasons.

43

2020/122021/122022/12

Number of Employees Taking Child Healthcare Leave
Male (persons)Female (persons)Boundary: Unconsolidated

42

51
24

2019/1233

2020/12

38

51

44
25

2021/122022/12

Notes:
1. The data is for the period between April to March of the following year.
2. From 2022, the data represents the number of first-time acquirers during theyear in line with the method used to calculate the acquisition rate.

INPEX CORPORATION Integrated Report 2022

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FeaturedContent

2

Climate Change Response

Vice President in charge ofCorporate Strategy &Planning

Efforts in achieving climate change response goals The “Corporate Position on Climate Change” (issued in December
2015, last revised in January 2021) is available on our website.

INPEX’s information disclosure related to climate change
is in line with the TCFD Recommendations.
Please refer to our Sustainability Report for more details.

Overview of TCFD Recommendations

1 opportunities

 overnance System for Climate ChangeG
Response

Disclose the organization’s governance in relation to climate-relatedrisks and opportunities

Describe management’s role in assessing and managing cli2 mate-related risks and opportunities essage from Director in Charge ofM
Climate Change ResponseGovernance Framework for Climate
Change Response

Describe the board’s oversight of climate-related risks and

Describe the short-, medium- and long-term climate-related

Riskmanagement
Disclose how the organization identifies, assesses and manages
climate-related risks

1 risks and opportunities the organization has identified

Climate-related Risks and Opportunities

Describe the impact of climate-related risks and opportunities
2 on the organization’s businesses, strategy and financial
planningL ong-term Strategy and Medium-term
Business Plan (INPEX Vision @2022)

Describe the resilience of the organization’s strategy, taking
3 into consideration different climate-related scenarios, including
a 2°C or lower scenario

INPEX Low-Carbon Society Scenarios
Assessment of Financial Impacts of
Climate-related Risks
Application of Internal Carbon Price

Describe the organization’s processes for identifying and as- ssessing and Managing Climate-relatedA
Risks and Opportunities

Describe the organization’s processes for managing climate-re- ssessing and Managing Climate-relatedA
Risks and Opportunities

1 sessing climate-related risks
2 lated risks

Describe how processes for identifying, assessing, and manag-

3 ing climate-related risks are integrated into the organization’sRisk Management Systemoverall risk management

Metrics andtargets
Disclose the metrics
and targets used to assess and manage relevant climate-relatedrisks and opportunities
where such information
is material

Disclose the metrics used by the organization to assess climate

1 change-related risks and opportunities in line with its strategy
and risk management process

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG

2 emissions, and the related risks

Describe the targets used by the organization to manage cli-

3 mate change-related risks and opportunities and performanceagainst targets

Sustainability Report60

INPEX CORPORATION Integrated Report 2022

Climate Change Response Goals and Efforts to Achieve Them
We have set three goals to help realize a net zero carbon society in accordance with the objectives of the Paris Agreement.
The first goal is to achieve net zero emissions by 2050 pursuant to the Paris Agreement. The second is to achieve a reduction of at least 30% in net carbon intensity (compared to2019) by 2030 in the process of fulfilling the first goal. Scope
1 and 2 emissions, which are emissions from our businessprocesses, come under these goals. The third goal is to cooperate with all relevant stakeholders across the value chain
to reduce the Scope 3 emissions from combustion of the oiland gas we sell.
In our 2022–2024 Medium-term Business Plan, we added
one further goal to reduce our net carbon intensity by 10%(4.1 kg-CO2e/BOE) over that three-year timeframe, in pursuitof our 2030 target. In FY2022, the first year of this plan, wemanaged to reduce our net carbon intensity to 28 kg-CO2-e/
BOE.
In addition to promoting our five net zero businesses andmoving towards cleaner upstream businesses, specific measures we plan to take to achieving our net zero goals include: maintaining methane emissions intensity (methane
emissions/natural gas production) at its current low level(about 0.1%); and zero routine flaring.
Details of these initiatives are set out in our Long-term
Strategy and Medium-term Business Plan (INPEX Vision@2022) and INPEX’s Current Initiatives based on the Corporate Position on Climate Change.

 anaging GHG Emissions
MClimate Change Response and Directors’Compensation

2050

2030

Scope 3 Reduction

NET ZERO1 in absolute emissions(Scope 1+2)

30% OR MORE2 reduction in net
carbon intensity

Work together with all relevant stakeholders
to address challenges across the value chain

1: on INPEX equity share basis

2: in comparison with 2019

(Scope 1+2)

INPEX Emissions
2019

2020

2021

2022

Scope13(thousand tons CO2e)

8,557

7,328

7,302

6,839

Scope23(thousand tons CO2e)

204

148

136

69

(kg CO2e/BOE)

41

35

33

28

(%)

0.10

0.07

0.04

0.05

Net carbon
intensity4
Methane emissions
intensity5

Business and Financial Overview

Disclose the actual andpotential impacts of climate-related risks andopportunities on the organization’s businesses,
strategy, and financial
planning where such information is material* Net Zero Emissions by 2050 Scenario (NZE): An IEA scenario that shows apathway for the global energy sector to achieve net zero CO2 emissions by
2050

INPEX’s disclosures

Governance

Strategy

Outlook (WEO) and the Institute of Energy Economics, Japan (IEEJ) as we evaluate our business portfolio. We also reference the Net Zero Emissions by 2050 Scenario (NZE)* in
the IEA WEO.
We maintain an annual assessment structure to assess climate change risks and opportunities and implement measures derived through that process. Our program to manage
GHG emissions involves promoting initiatives to achieve ourclimate change response goals and monitoring our progress.

Management Foundation to Advance Growth Strategies

Disclosure in line with TCFD Recommendations

In January 2021, INPEX defined its goals for addressing climate change to meet the objectives of the Paris Agreement,
establishing a corporate target of net zero emissions by 2050
(Scope 1 and 2). This will require a reduction in net carbon
intensity of at least 30% by 2030.
Our disclosures related to climate change response are inline with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We continue toexpand the oversight and involvement of our Board of Directors in the governance of our climate change response. In
designing business strategies, we assess our ability to respond to multiple scenarios, including the scenarios outlinedby the International Energy Agency (IEA) World Energy

Growth Strategies for Value Creation

In February 2022, INPEX launched its Long-term Strategy and Medium-term Business Plan (INPEX Vision@2022). This lays out our path to achieving the target of net zero emissions by 2050 as announced in 2021. We
have additionally set a goal to reduce net carbon intensity by 10% (4.1 kg-CO2e/BOE) or more over the three
years from 2022 as a quantitative target in our Medium-term Business Plan.
Our basic policy for a net zero carbon society by 2050 is summed up in the statement: “As a pioneer inenergy transformation (EX), INPEX will provide a stable supply of diverse and clean energy sources including oil
and natural gas, hydrogen and renewable power.” We aim to transform net zero carbon from an ideal to reality
by around 2030.
Specifically, we will accelerate expansion of the five net zero businesses: (1) hydrogen and ammonia; (2)reduce CO2 emissions from oil & gas operations (CCUS); (3) renewable energy; (4) carbon
recycling and new businesses; and (5) forest conservation. At the same time, we will
maintain a stable supply in our oil and gas business while taking great steps to make thebusiness cleaner.
INPEX Vision @2022 is also reflected in our Corporate Position on Climate Change(revised March 2022), and the progress of our initiatives forresponding to climate change and the five net zero businesses as Kimihisa Kittaka
Director, Senior Managing
outlined in the vision is included in INPEX’s Current Initiatives*.
Executive Officer, Senior* Please see INPEX website for more on Corporate Position on Climate Change and INPEX’s
Current Initiatives

INPEX’s Vision and Value Creation

Our Policy

Message from the Officer in Charge of Climate Change Response

3: INPEX’s equity share emissions
4: Net carbon intensity: ({Scope1 + Scope2} - offsets*6)/(Net production of oil and natural gas upstream business + Electricity generated from renewable energy business)
5: Methane emissions intensity: Calculated as methane emissions/natural gas production (%), the formula used by the Oil and Gas Climate Initiative
6: Offsets include the amount absorbed through forest conservation and the amount contributed to reduction through renewable energy projects where the environmental
value of said projects are considered to be attributable to INPEX. Contributions from renewable energy are calculated based on Guidelines for Measurement, Reportingand Verification of GHG Emission Reductions in JBIC’s GREEN (the “J-MRV Guidelines”)

 SG Performance Data: Climate Change
E<Target Management> fforts in Setting and Achieving Climate
E
Change Goals

https://www.sustainability-report.inpex.co.jp/fy2022/en/
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Climate Change Response

The GHG emissions from each office are regularly aggregated, analyzed, and reported in accordance with procedures
based on host country systems as well as internationalguidelines. We also obtain third-party assurance of our environmental data to ensure the reliability of our GHG emissions reporting.

Efforts to Reduce GHG Emissions

Efforts to Reduce Flaring*

Efforts to Reduce Fugitive Methane Emissions

Promoting the Sale of Carbon-neutral Products

Our target is to maintain our methane emissions intensity at
its current low level (about 0.1%). In FY2022, our methane
emissions intensity was 0.05, which is below our target level.
To manage and reduce methane emissions, we have been
aggregating and reporting data on fugitive methane emissions based on international methods since FY2018. In
FY2019, we conducted methane leak inspections at the applicable points of equipment and facilities at our projects inJapan. We also established a structure for data aggregation
and reporting. In FY2020, we brought in a laser methane detector to conduct leak inspections at almost all applicable
points and took measures for any points where fugitive emissions were detected.
For our overseas projects, in FY2022 we carried out methane leak inspections through the leak detection and repair(LDAR) program using infrared cameras at the Ichthys LNG
central processing facility (CPF) and floating production,
storage, and offloading (FPSO) facility.
We are considering implementing similar inspections atother overseas projects and will continue to take further action to reduce fugitive methane emissions.
We will also continue to enhance our methane emissions
management in light of international initiatives and trends
related to the Measurement, Reporting, and Verification(MRV) framework and methane emissions management.

We promote the sale of carbon-neutral products to our customers and the total GHG emission reduction through thesales of such products so far is more than 2 million tons of
CO2 equivalent. Carbon-neutral products comprise LNG,
natural gas, or LPG products sold by INPEX for which the
GHG emissions produced across the life cycle—from extraction through transportation and combustion—are offset
by the equivalent volume of carbon credits, resulting in net
zero GHG emissions. By supplying these carbon-neutral
products, we contribute to our customers’ efforts to reduce
their supply chain carbon footprints.

We encourage our contractors and suppliers to reduce their
GHG emissions. Our Supplier Code of Conduct sets out
specific expectations for these business partners to undertake voluntary environmental initiatives, such as improving
energy efficiency and other measures to reduce GHG emissions. The INPEX Health, Safety and Environmental (HSE)
Policy also states that we will “pursue every effort to reduce
Greenhouse Gas (GHG) emissions and adhere to the GHG
emissions management process.” In line with our efforts to
reduce emissions across the supply chain, our contractor andsupplier agreements include a clause requiring compliancewith our HSE Policy.

In considering the outlook for the business environment, including energy demand and supply toward a low-carbon society by 2050*, we refer to the Stated Policies Scenario(STEPS), the Announced Pledges Scenario (APS), and the
NZE Scenario of the IEA WEO as well as the Reference Scenario and Advanced Technologies Scenario of the IEEJ.
Our Long-term Strategy and Medium-term Business Plan
(INPEX Vision @2022) was developed utilizing these scenarios, and going forward, we will continue to use scenario reviews to quickly identify changes in the business environmentand review management strategies and plans in line with social trends.
* The IEA WEO sets out a panoramic view of the international energy scenethrough 2050

Key Referenced Scenarios
Stated Policy Scenario (STEPS)IEA World
EnergyOutlook (WEO)

Announced Pledges Scenario (APS)Net Zero Emissions by 2050 Scenario (NZE)

Institute ofEnergyEconomics,
Japan (IEEJ)

Reference Scenario
Advanced Technologies Scenario

Assessment of Financial Impact of Climate-related Risks*F laring: The act of incinerating and detoxifying excess hydrocarbon gas
produced by crude oil drilling facilities and gas processing facilities, instead of
releasing it to the atmosphere

INPEX’s Approach to Procuring and Utilizing Carbon Credits
For our carbon offsets on GHG emissions, we use carbon
credits certified under highly trusted domestic and international schemes, which we receive in return for support andparticipation in forest conservation projects. We also track
the latest developments in the carbon credit market such as

Efforts to Reduce Contractor and Supplier
Emissions

The INPEX Low-carbon Society Scenarios

Management Foundation to Advance Growth Strategies

We have set a goal of zero routine flaring in our operator
projects by 2030. To reach this goal, since FY2021 relevant
departments across the Company have been working together to study measures to reduce flaring.
In Japan, as part of our research and development of flaring reduction measures, we are studying the introduction of
initiatives to reduce atmospheric CO2 emissions by fixing
carbon in the flare gases through the use of methane pyrolysis technology.

Supply Chain Emission Reduction Initiatives—Towards Scope 3 Reduction

Growth Strategies for Value Creation

In our operator projects in Japan and overseas, dependingon the situation at each site, we carry out energy-saving activities to reduce GHG emissions, avoid continuous flaring
and venting during routine operations, and reduce fugitive
methane emissions.
In our domestic exploration and development operations,through our membership in the Japan Petroleum Development Association, we participate in the Keidanren Carbon
Neutrality Action Plan, a voluntary emissions reduction initiative of the Japan Business Federation (Keidanren). In FY2021,
we reexamined our targets for reducing emissions by
FY2030.

INPEX’s Vision and Value Creation

Aggregation, Analysis, and Reporting of GHG Emissions

initiatives in Japan and overseas and assess the mediumand long-term performance of our projects. Through these
efforts, we work to procure high-quality credits.

VCS (Verified Carbon Standard)
Verification standard established by Verra, an international body for setting carbon offset standards

JCM
Japanese Government-led bilateral credit program for reduction and removal of GHG
emissions in cooperation with developing countries, with both sides sharing the benefits of reduction and removal

J-Credit

Our second method is to assess the financial impact on
our business portfolio. This is an assessment of the financial
impact of the market risks to our portfolio resulting from theoil and carbon prices in the IEA WEO APS and NZE. Changes in the oil and carbon prices shown in the IEA WEO APS
and NZE are applied to the net present value (NPV) calculation for the project, and the percentage of change from the
NPV for the base case is calculated as the impact on our
portfolio. Despite difficulties in formulating assumptions, wehave adopted this as one of the methods to assess the financial impact on our portfolio. We will continue to refine theimplementation standards for this method and to improvethe competitiveness of our portfolio as we factor in changes
in the business environment.

Business and Financial Overview

We select and use carbon credits certified under the following schemes:

We use two methods to assess the potential financial impact
of climate-related risks.
The first method is an economic assessment of projects
using our internal carbon price. This assessment forms ourbase case. The reason we use this is because more than 130
countries have already declared net zero targets by 2050,
and we expect a growing number of countries to introduce
carbon pricing as they bolster efforts to tackle climatechange. We review our internal carbon price each year withreference to the carbon prices in the IEA WEO STEPS. Starting in FY2023, we reflect the IEA WEO carbon price forecast
and reference relevant policy cost forecast if there is a carbon price system in the country in which we operate; and if
not, we reference variable prices linked to the STEPS EU
prices (2030: US$90/tCO 2-e; 2040: US$98/tCO 2-e; 2050:
US$113/tCO2-e).
Two methods to assess the potential financial impact
Assessment using internal carbon price

Assessment under various scenarios

Financial
impactassessment
methodFinancial impact assessment of carbon pricing
policies on projects

Financial impact assessment based on oil and carbon prices
under the following scenarios;
Announced Pledges Scenario (APS)Net Zero Emissions by 2050 Scenario (NZE)

MetricIRR based on internal carbon price (base case)

The percentage of change from NPV based on application of
the relevant index price (sensitivity analysis)

StatusAdopted as base case since FY2021

Implemented since FY2018; NZE scenario added from FY2022

Scheme designed to certify the amount of GHG emissions reduced and removed inJapan, with credits certified by the Japanese Government

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Environmental Management

We identify biodiversity related risks and opportunities in our businesses and actively promote initiatives
for the conservation and sustainable use of biodiversity based on the mitigation hierarchy1.

Commitments

1. Identify biodiversity related risks and opportunities
We will identify risks and opportunities for biodiversity in our business and promote initiatives for sustainable use.
We will promote disclosure of information on biodiversity conservation activities.
2. Set Exclusion Zones for our businesses
We will not operate our businesses inside UNESCO World Natural Heritage site boundaries.
3. Develop Net Positive Approaches
For our businesses located in critical habitats2, we will develop and implement Biodiversity Action
Plans (BAP), including creating net positive impact.
4. Enhance Biodiversity Conservation Activities
For new businesses, we will identify impacts on biodiversity and develop and implement measures toavoid or reduce impacts based on the mitigation hierarchy.
For existing businesses, we will reduce negative impacts on biodiversity to the extent possible andpromote initiatives to create positive impacts on biodiversity.

1 Mitigation Hierarchy: Order of priority to avoid, reduce or minimize development impacts and then taking compensatory measures for remaining impacts
2 Critical Habitat: Areas of high biodiversity value as defined in IFC Performance Standard 6

Biodiversity Conservation

Activities to Conserve Biodiversity at Ichthys LNG Project
The Ichthys LNG onshore processing plant is located in Darwin
Harbour, where extensive mangrove forests along the coast
provide breeding and feeding grounds for fish and sea turtles.
To protect this rich biodiversity, Ichthys LNG has continued tocomprehensively monitor effluent quality, seawater quality, andgrowing conditions for mangrove forests, and other naturalvegetation. We further contribute to biodiversity conservation
around the plant by providing grants to marine research projects such as long-term dolphin and dugong studies in the
Northern Territory.

Identification of Risks and Opportunities
Related to Biodiversity
In line with the LEAP approach of the TNFD framework* beta
release, we are assembling nature-related information—suchas on ecosystem points of contact, endangered species, andwater stress—for the areas around our domestic operations.
Going forward, we will use the results of these efforts to assess the relationships between our business operations andnature in terms of impact and dependence. We will also consider nature-related risks and opportunities for the Group.

Environmental monitoring programs are conducted at/around the Ichthys LNG
onshore processing plant site

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INPEX CORPORATION Integrated Report 2022

* TNFD framework: A framework established by the Taskforce on Nature-related
Financial Disclosures (TNFD) to assess nature-related risks and opportunities,
and to disclose that information. The LEAP approach is one process proposedin the framework for systematically assessing nature-related risk and opportunities. The LEAP approach involves four phases: (1) Locate your interface with nature; (2) Evaluate your dependencies and impacts; (3) Assess your risks andopportunities; and (4) Prepare to respond to nature-related risks and opportunities, and report to investors.

Policy and Commitments on Water Management
Our Policy

We strive to understand the impact of our business on water resources and sustainability in local communities and promote efforts on impact mitigation and value creation on local water sustainability.

Commitments

1. Identify water-related risks in areas around operational sites
We strive to understand the water-related risks at operating sites using international risk assessment
tools.
We will develop and implement additional measures based on mitigation hierarchy for areas evaluated as high water-related risk areas.
2. Restrict freshwater intake in high water stress* areas
We will limit freshwater intake where significant impact is expected on local water resources as a resultof freshwater intake by our operating sites.
3. Implement appropriate water management (water intake, usage, and drainage)We will strive to understand the status of water usage (water intake, drainage, usage) at our operatingsites and promote 3R (reuse, reduce, recycle).
We will implement appropriate treatment and wastewater management for produced water and otherassociated wastewater.
4. Collaborate with stakeholders
We will collaborate with stakeholders to promote sustainable use of local water resources.

* Water stress: The amount of water resources available per person, used as an index for assessing the scarcity of water supply versus demand

Water Risk Assessment and Identification ofHigh-Water Stress Areas
Each year, we confirm if our operator project sites in Japanand overseas are located in high water stress areas by using
Aqueduct, a water risk mapping tool developed by theWorld Resources Institute(WRI). We have confirmed that, asof December 31, 2022, water stress levels are not high in ouroperator project sites, and there are no expectations ofincreased project costs as a result of water shortages.
Since local water risks are influenced by various factors
and change over time, going forward we will continue toidentify water risks, and if we find water risk to be too high,we will plan and implement additional measures according
to the mitigation hierarchy.

Efficient Use of Freshwater Resources
As one of the resources we utilize in our business operations,
we recognize freshwater intake to be a major issue in ourwater management. We have been working to reduce our
impact on water resources by managing the water intake ofour operator projects in Japan and overseas, and the discharge of produced water arising from oil and natural gas
production. Our operator project sites use tap water, industrial water, and groundwater as coolants. In FY2022, the volume of freshwater used across the Group totaled 2,257
thousand cubic meters.

In addition to using groundwater for normal cooling anddrilling operations in Japan, we also use it for melting snow
in winter. We are also taking action to reduce our freshwater
consumption, including by adopting a circulating system forcooling water, and equipping snow-melting systems with automatic start and shutoff mechanisms.
At the Ichthys LNG onshore processing plant, we conduct
investigations into freshwater use with the aim of reducing
consumption. The findings of these investigations are being
used to study the feasibility of cost-effective approaches for
reducing freshwater consumption by reusing water, such astreated wastewater from processing as well as wastewaterand condensed steam from power generation facilities.

Business and Financial Overview

The type and degree of impact that our operations have on
biodiversity differ depending on the scale, activities, or location of each project. Accordingly, the biodiversity conservation efforts required for each project also differ. Therefore,
we assess the importance of biodiversity in the areas inwhich we operate, and the risks and impacts on biodiversitythat each project brings. We then apply a mitigation hierarchy to plan strategies for avoiding, mitigating, and compensating for those risks and impacts, and to conserve
biodiversity, in environmentally sensitive areas that are particularly important (protected areas, critical habitats ofthreatened species, forests, mangroves, coral reefs, wetlands, and tidal flats, etc.).

 onfirmation if our operator projects operate in any
Cprotected area
Initial screening of potential impacts of new projects toprotected areas
Planning for biodiversity conservation activities in existing
projects

To better understand the present situation of our naturerelated efforts and identify further actions, we have looked
to the World Business Council for Sustainable Development(WBCSD) practitioner’s guide: “What does nature-positive
mean for business?”. Using the guide, we have identified
areas in which we are making particular progress, such as
developing and issuing our commitments on biodiversity
and water, and applying a mitigation hierarchy to avoid,
mitigate, and compensate for our impacts on biodiversity. In
the future, we will consider nature-related impacts anddependences in terms of the value chain and implement
initiatives that contribute to net positive impacts.

Management Foundation to Advance Growth Strategies

Our Policy

Since FY2019, we have been enhancing our geographical information system (GIS) with information on protected areas obtained from the World Database on Protected Areas (WDPA),
and animal and plant species that fall under the International
Union for Conservation of Nature (IUCN) Red List categories.
Information is updated annually for the following purposes:

Promotion of a Net Positive Approach

Growth Strategies for Value Creation

Policy and Commitments on Biodiversity Conservation

Avoidance and Mitigation of, and Compensation
for, Impacts to Protected Areas

INPEX’s Vision and Value Creation

We recognize the importance of addressing the increasingly diverse global environmental issues connected to ourbusiness activities, including climate change, biodiversity, and water and waste management. We have therefore included initiatives to address such issues and to create environmental value as HSE management enhancements in our
INPEX Vision @2022.
With this in mind, in December 2022, we revised our HSE Policy and established new policies and commitmentson biodiversity conservation, water management, and waste management.
In this way, in addition to our traditional management initiatives to avoid, mitigate, or compensate for negative impacts on the environment surrounding our projects, we can contribute to the creation of environmental value by
working to promote a net positive approach to biodiversity and help create a circular economy through appropriate
management of waste.

Wastewater Management
Produced water from our oil and natural gas projects isreinjected underground or discharged as wastewater after
being confirmed to comply with the effluent standards inlocal and international guidelines. In FY2022, 60% of thetotal produced water (approximately 1.33 million cubic
meters) was reinjected, while the remainder was discharged
into rivers or seas after being appropriately treated.

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Corporate Governance
INPEX’s Vision and Value Creation

Management (As of April 1, 2023)
Directors
Name

Title and Position

TermofofficeNumberof shares
held

Career summary and concurrently held positions

August 2009
June 2010
June 2018

Representative Director,
Chairman

Inside Director

12 yearsand 9monthsJoined Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
Director-General, Minister’s Secretariat
Director-General, Manufacturing Industries Bureau,
METI
September 2012 Director-General, Trade Policy Bureau, METI
Commissioner, Agency for Natural Resources andJune 2013
EnergyVice-Minister for International Affairs, METI
July 2015

April 2017
August 2017
June 2018

July 2002

64,784

April 1980

Takayuki
Ueda

Representative Director,
President & CEO

Inside Director

Kenji
KawanoInside Director

Kimihisa
Kittaka
Inside Director

Inside Director

Daisuke
YamadaInside Director

ToshiakiTakimoto
Inside Director

October 2008

1 yearDirector, Managing
Executive Officer, SeniorVice President, Hydrogen& CCUS Development

37,463June 2012
March 2020

Director, Senior Managing
6 years
Executive Officer, Senior
and 9
Vice President,
monthsGeneral Administration

April 1981

25,743October 2007
July 2008
November 2010
June 2012

April 1981
October 2008
June 2010

49,384

June 2016
January 2022

April 1984
April 2011
April 2013

3 years

17,477
July 2013
April 2014
April 1987
January 2004
October 2008−

20,669June 2013
June 2016
June 2018
June 2019
April 1973
April 2004

Jun Yanai
Outside Director

April 1980
March 2006

Director, Senior Managing
Executive Officer, Senior
6 years
Vice President,
and 9
Corporate Strategy &monthsPlanning, Legal Affairs

Director, Managing
Executive Officer, SeniorVice President,
Finance & Accounting

31,076

Director

April 2005

0April 2008
April 2011
April 2013

Norinao
Iio
Outside Director

June 1973
April 2005

Director

5 years
and 9monthsApril 2008

0

Independent Director

June 2009

AtsukoNishimura

April 1979
June 1997

Outside Director

Director

5 years
and 9months0

Independent Director

Tomoo
Nishikawa
Outside Director

April 1977

Director

3 years0

HidekaMorimoto
Outside Director

June 1979
August 1995

Independent Director

INPEX CORPORATION Integrated Report 2022

1 year0

Director, Managing Executive Officer, Senior Vice
President, Corporate Strategy & Planning
Director, Managing Executive Officer, Senior Vice
President, Corporate Strategy & Planning, Legal
Affairs
Director, Senior Managing Executive Officer, SeniorVice President, Corporate Strategy & Planning,
Legal Affairs (incumbent)

June 2016
June 2019
January 2021

Joined Indonesia Petroleum, Ltd. (INPEX Corporation)
Vice President of General Administration Division,
General Manager of Secretarial Unit
Executive Officer, Vice President of Oil & Gas Business
Division No.1, General Manager, Oil Marketing Unit
Director, Managing Executive Officer, Senior Vice
President, General Administration
Director, Senior Managing Executive Officer, SeniorVice President, General Administration (incumbent)

Joined Mitsubishi Corporation
Senior Vice President, Senior Assistant to Group CEO,
Energy Business Group, Mitsubishi Corporation
Senior Vice President, Division COO, Petroleum Business
Division, Mitsubishi Corporation
Executive Vice President, Group COO, Energy BusinessGroup, Mitsubishi Corporation
Executive Vice President, Group CEO, Energy BusinessGroup, Mitsubishi Corporation
Senior Executive Vice President, Group CEO, Energy
Business Group, Mitsubishi Corporation
Joined Mitsui & Co., Ltd.
Managing Officer, Chief Operating Officer, Energy
Business Unit, Mitsui & Co., Ltd.
Executive Managing Officer, Chief Operating Officer,
Europe Middle East and Africa Unit, Mitsui & Co., Ltd.
Senior Executive Managing Officer, Chief Operating
Officer, Europe Middle East and Africa Unit, Mitsui &Co., Ltd.
Representative Director, Senior Executive Managing
Officer, Mitsui & Co., Ltd.

Joined the Ministry of Construction (currently the Ministryof Land, Infrastructure, Transport and Tourism)
Attorney at Law admitted to practice in Japan; joinedAnderson Mori & Rabinowitz (currently Anderson Mori &Tomotsune), and later served as Partner
Completed a Master of Laws (LL.M.) at Harvard Law
SchoolPartner, Komatsu, Koma & Nishikawa (currently Asahi
Law Offices)

Joined Environment Agency (currently Ministry of theEnvironment)
September 1997 Private Secretary, Director General of Environment Agency
Private Secretary, Minister of the Environment
February 2002
July 2008
Director, General Affairs Division, Ministry’s Secretariat
July 2009
Director, Personnel Division, Ministry’s Secretariat
Councilor, Cabinet Secretariat and Director, Cabinet
August 2011
Secretariat Nuclear Safety Regulation Organizational
Reform Office
September 2012 Deputy Director General, Nuclear Regulation Agency
April 1981

Director

Joined Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
Director-General for Consumer Policy, METI
Director-General, Kyushu Bureau, METI
Joined INPEX Corporation
Executive Officer, Vice President of Corporate Strategy& Planning Division, General Manager of Corporate
Strategy & Planning Unit, and Corporate
Communication Unit

Joined Teikoku Oil Co., Ltd.
General Manager, Caracas OfficeSenior Coordinator, South America Unit, America &Africa Project Division
General Manager, London Office
General Manager, Global Exploration Unit, New
Ventures Division
Executive Officer, Vice President, The Americas & Africa
Managing Executive Officer, Senior Vice President,
New Ventures & Global Exploration100%(15/15)

Senior Executive Vice President, Americas Projects Unit
and Strategic Projects Office Head of Overseas Projects
Director, Senior Executive Vice President, Americas Projects
Unit and Strategic Projects Office, Head of Overseas Projects
Director, Senior Executive Vice President, Renewable
Energy & New Business, Americas Projects Unit andStrategic Projects Office, Head of Overseas Projects
Director, Senior Executive Vice President, Renewable Energy &New Business, Americas Projects Unit and Strategic Projects
Office, Compliance, Head of Overseas Projects (incumbent)

Joined Ministry of Foreign Affairs
Director, First Africa Division, Middle Eastern and
African Affairs BureauCounselor/Minister, Permanent Mission of Japan to theAugust 1999
United Nations
June 2001
Minister, Embassy of Japan in Belgium
September 2004 Professor, School of Law, Tohoku University
Administrative Vice President, Japan Foundation
June 2008
Senior Councilor, Japan Oil, Gas and Metals National
April 2012
Corporation
April 1972

Independent Director

66

October 2008

Councilor (part-time), INPEX Corporation
Senior Executive Vice President
Representative Director, President & CEO(incumbent)

100%(12/12)100%(15/15)100%(15/15)

April 2018
May 2019
June 2019
March 2020

March 2023

Senior Managing Executive Officer in charge of Digital
Innovation, Mizuho Financial Group, Inc. (resigned in March 2019)
Councilor, INPEX Corporation
Managing Executive Officer, Vice President, Finance& Accounting, General Manager, Finance Unit,
Finance & Accounting Division
Director, Managing Executive Officer, Senior Vice
President, Finance & Accounting (incumbent)

100%(15/15)

Director, Managing Executive Officer, Senior Vice
President, Hydrogen & CCUS Development(incumbent)—
June 2013
April 2014
June 2016
June 2016

August 2009
April 2010
April 2011
June 2011
June 2017

Member of the Board, Senior Executive Vice President,Group CEO, Energy Business Group, Mitsubishi Corporation
Member of the Board, Senior Executive Vice President, GroupCEO and CCO, Energy Business Group, Mitsubishi Corporation
Corporate Advisor, Mitsubishi Corporation (incumbent)
Director (Outside), INPEX Corporation (incumbent)

Representative Director, Senior Executive Managing
Officer, Chief Compliance Officer, Mitsui & Co., Ltd.
Representative Director, Senior Executive Managing
Officer, Mitsui & Co., Ltd.
Director, Mitsui & Co., Ltd.
Counselor, Mitsui & Co., Ltd.
Director (Outside), INPEX Corporation (incumbent)

Ambassador Extraordinary and Plenipotentiary to
the Grand Duchy of Luxembourg
Ambassador Extraordinary and Plenipotentiary in chargeof Women, Human Rights and Humanitarian Affairs
June 2017
Director (Outside), INPEX Corporation (incumbent)(Concurrently held positions)
Outside Director, TAISEI CORPORATION

100%(15/15)100%(15/15)

April 2014
July 2016

Member of House of Representatives (for one term,
Kanagawa 3rd district)
Managing Partner, Sidley Austin Nishikawa Foreign
Law Joint Enterprise
November 2006 Auditor-Secretary, Tohoku University
Visiting Professor, Tohoku University
April 2008
Partner, Sidley Austin Nishikawa Foreign Law Joint
January 2020
Enterprise
March 2020
Director (Outside), INPEX Corporation (incumbent)

100%(15/15)October 1996

October 2002

Ministry’s Secretariat, Ministry of the Environment
Administrative Vice-Minister, Ministry of theEnvironment (resigned in July 2019)
Professor, Faculty of Law, Waseda University(incumbent)
June 2020
Chief Director, Institute for Promoting Sustainable
Societies (incumbent)
Director (Outside), INPEX Corporation (incumbent)
March 2022
(Concurrently held positions)
Outside Director, Takasago Thermal Engineering Co., Ltd.

100%
(15/15)

July 2014
July 2017

April 2020100%
(12/12)

Corporate
management

GlobalFinance/
Legal/ Risk Sustainability Technology/
Accounting management
(ESG)
DX

EnergyHR
Sales/
development/
MarketingDiversity

Has abundant operational experience in the Company andalso has insights regarding management in general of oil &natural gas development companies and global business
management as well as administrative/operational matters.

Has operational experience in the Company and also has insights regarding management in general of oil & natural gas
development companies and global business management
as well as administrative/operational matters.

Has abundant business experience in the Company as wellas knowledge and experience about the business management and administrative/operational matters of oil & natural
gas development companies.

Has abundant operational experience in the Company andalso has a wide range of knowledge and experience aboutbusiness management and administrative/operational matters of oil & natural gas development companies and ESG.

Has abundant business experience in the Company as wellas knowledge and experience about marketing and administrative/operational matters of oil & natural gas development companies.

Has abundant business experience in the Company as wellas knowledge and experience about administrative/operational matters of oil & natural gas development companies.

Has abundant business experience in the Company as wellas knowledge and experience about the business management and administrative/operational matters of oil & natural
gas development and development of various clean energy
such as hydrogen and CCUS.
Expected to provide supervision of the execution of business from an international perspective and the necessarycomments and suggestions, etc. in the meetings of theBoard of Directors, etc. primarily by utilizing his experience
as a corporate executive and abundant experience and insight in the resource and energy industry.

Business and Financial Overview

Independent Director

6 years
and 9months(15/15)January 2022
Joined Teikoku Oil Co., Ltd.
General Manager, Business Development Department,International Project Division & Domestic Offshore Division. March 2022
Executive Officer, Vice President, Asia & Australasia,
General Manager of Planning & Coordination Unit andJanuary 2023
Offshore Japan Unit of the Company
Managing Executive Officer, Senior Vice President, Asia
& Australasia
March 2023
Senior Managing Executive Officer, Senior Vice
President, Asia Projects

Joined The Industrial Bank of Japan, Ltd. (currently Mizuho Bank, Ltd.)
Executive Officer, General Manager of Industry
Research Division, Mizuho Corporate Bank, Ltd.
Managing Executive Officer, Deputy in charge of BranchBanking Group, Mizuho Bank, Ltd. Managing Executive Officer
in charge of Corporate Banking, Mizuho Corporate Bank, Ltd.
Managing Executive Officer in charge of BranchBanking Group, Mizuho Bank, Ltd.
Managing Executive Officer, Head of Corporate Banking
Unit (Large Corporations), Mizuho Financial Group, Inc.

100%

Reason for appointment

Management Foundation to Advance Growth Strategies

Nobuharu
Sase

Director, Senior Executive Vice
President, Renewable Energy &New Business, Americas Projects
Unit and Strategic Projects
Office, Compliance, Head ofOverseas Projects

4 years
and 9monthsJuly 2010
August 2011

Senior Executive Vice President, INPEX Corporation
Representative Director, President & CEO
Representative Director, Chairman (incumbent)

Skill matrix

Growth Strategies for Value Creation

Joined Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
Director-General, Trade and Economic Cooperation
Bureau, METI
July 2003
Director-General, Manufacturing Industries Bureau,
METI
Director-General, Trade Policy Bureau, METI
June 2004
Vice-Minister for International Affairs, METI
July 2006
November 2007 Advisor to Tokio Marine & Nichido Fire Insurance Co.,Ltd.
April 1972

Toshiaki
Kitamura

Attendance A member ofat Board of Nomination andCompensation
Directors
Advisorymeetings
Committee

Expected to provide supervision of the execution of business from an international perspective and the necessarycomments and suggestions, etc. in the meetings of theBoard of Directors, etc. primarily by utilizing his experience
as a corporate executive and abundant experience and insight in the resource and energy industry.
Expected to provide supervision of the execution of businessfrom a diverse and global perspective and the necessarycomments and suggestions, etc. in the meetings of the Boardof Directors, etc. by utilizing her abundant experience asa diplomat and extensive insight on international conditions,in addition to expert knowledge as a university professor.
Expected to provide supervision of the execution of business froma diverse and global perspective and the necessary comments andsuggestions, etc. in the meetings of the Board of Directors, etc. byutilizing his abundant experience and insight as an international attorney, in addition to knowledge in a variety of fields such as expert
knowledge as a university professor.
Expected to provide supervision of the execution of business froma sustainability (ESG) perspective and the necessary comments andsuggestions, etc. in the meetings of the Board of Directors, etc. by utilizing his abundant experience and insight on the environment and energy policy developed through his career in the Ministry of theEnvironment, in addition to expert knowledge as a university professor.

INPEX CORPORATION Integrated Report 2022

67

Corporate Governance
INPEX’s Vision and Value Creation

Overview of the Corporate Governance Structure
Audit & Supervisory Board Members
Name

Position

Akio
Kawamura

Audit &
Supervisory
Board
Member(full-time)

InsideNumberTerm ofof shares
officeheld

Career summary and concurrently held positions

April 1987
June 2010−

12,181

June 2018
March 2020
April 2021
March 2023

Joined Indonesia Petroleum, Ltd. (INPEX Corporation)
General Manager, Secretarial Unit, General Administration
Division
General Manager, Accounting Unit 1, Finance & Accounting
Division
Executive Officer, Vice President, Finance & Accounting
General Manager, Accounting Unit 1, Finance & Accounting
Division
Executive Officer, Vice President, Finance & Accounting
Audit & Supervisory Board Member (incumbent)

Attendance Attendance at
at Board ofAudit &
Reason for appointment
Directors
Supervisory
meetings Board meetings
Has abundant businessexperience in the Company as well as knowledge and experience
about administration, finance and accounting
for oil & natural gas development companies.

—

April 1984
July 2012

Audit &
Supervisory
Board
Member(full-time)

OutsideIndependent−0

March 1997

KenichiAso

Audit &
Supervisory
Board
Member(full-time)

OutsideIndependent

October 2014
June 2016−

0June 2017
June 2018
June 2021
January 2022
March 2023—

Joined The Export-Import Bank of Japan (currently Japan
Bank for International Cooperation)
Chief Representative of Representative Office in Beijing
Director General, Credit Department, Credit Assessment andSystems Group
Director General, Oil and Natural Gas Department, Energy
and Natural Resources Group
Resident Executive Officer, Regional Head for the Asia-PacificManaging Executive Officer, Global Head of Industry Finance Group,
Director General of Marine and Aviation Finance Department
Managing Executive Officer, Global Head of Industry FinanceGroup (resigned in March 2023)
Audit & Supervisory Board Member (outside) (incumbent)

Has extensive experience and a broad range
of insights in the fields offinance and taxation.

—

Has extensive experience and a broad range
of insights in the field ofinternational financing
and finance.

Organizational structure

Directors

Audit & Supervisory
Board members

Number of independent
directors and auditors
Other

April 1978
April 2007

MitsuruAkiyoshi
OutsideAudit &
Supervisory
Board
Member

3 years
and 9months0

Independent

Joined Tokyo Broadcasting System, Inc. (currently Tokyo
Broadcasting System Television, Inc.)
Part-time Lecturer, Faculty of Education, Chiba University
Member of the Council for Regulatory Reform (PMO)
Member of the Ministry of Economy, Trade and Industry’s Advisory
Committee for Natural Resources and Energy (incumbent)
February 2008
Member of the Education Rebuilding Council (PMO)
Member of the Ministry of Land, Infrastructure, Transport andMarch 2009
Tourism’s Council for Transport Policy
Visiting Professor, Chiba University (incumbent)
April 2013
January 2016
Policy advisor for the Japan Coast Guard (incumbent)
November 2017 Member of the Ministry of Health, Labour and Welfare’s
Medical Ethics Council (incumbent)
Member of the Ministry of Education, Culture, Sports,
February 2019
Science and Technology’s Central Council of Education
June 2019
Audit & Supervisory Board Member, INPEX Corporation (incumbent)
November 2022 Member, Advisory Committee on Corporate Sound Water
Cycle Efforts, Prime Minister’s Office of Japan (incumbent)(Concurrently held position)
Outside Director, Central Japan Railway Company

100% 100%(15/15)(19/19)April 1987

April 2001
January 2007
July 2007

HirokoKiba
OutsideAudit &
Supervisory
Board
Member

3 years
and 9months0

Independent

100% 100%(15/15)(19/19)Has extensive experience and broad range of
insights in the fields of finance and management.

Has a wide and diverse
range of knowledge
gained through her service as a member of theAdvisory Committee for
Natural Resources andEnergy and the Council
for Transport Policy, as
well as abundant experience and insights as afreelance newscaster anduniversity instructor.

Corporate Governance Framework
General Meeting of Shareholders

Nomination and Compensation
Advisory Committee

INPEX Advisory Committee

Recommendation/
Advice/Reporting

Name

68

Position

Corporate HSE Committee
Title

President & CEO

Name

Munehiro Hosono

Position

Title

Executive Officer

Vice President, Europe & Middle East Projects

Kenji Kawano

Senior Executive
Vice President

Senior Vice President, Renewable Energy & New
Business, Americas Projects Unit and Strategic Projects
Office, Compliance, Head of Overseas Projects

Yukiyo Ikeda

Executive Officer

Vice President, Europe & Middle East Projects
Managing Director, INPEX Idemitsu Norge AS

Kimihisa Kittaka

Senior Managing
Executive Officer

Senior Vice President, Corporate Strategy &Planning, Legal Affairs

Shinichi Takada

Executive Officer

Vice President, Oceania Projects, Perth OfficeSenior Vice President Development

Nobuharu Sase

Senior Managing
Executive Officer

Senior Vice President, General Administration

Hiroshi Fujii

Senior Managing
Executive Officer

Shoichi Kaganoi

Executive Officer

Senior Vice President, Abu Dhabi Projects

Vice President, Hydrogen & CCUS Development
General Manager, Technical Development &Coordination Unit, Hydrogen & CCUS
Development Division

Hitoshi Okawa

Senior Managing
Executive Officer

Senior Vice President, Oceania Projects

Tetsuhiro Murayama

Executive Officer

Vice President, Oceania Projects General Manager,
Perth Office President Director, Australia

Daisuke Yamada

Managing
Executive Officer

Senior Vice President, Finance & Accounting

Wataru Nojiri

Executive Officer

General Manager, HSE Unit

Toshiaki Takimoto

Managing
Executive Officer

Senior Vice President, Hydrogen & CCUS
Development

Nobusuke Shimada

Senior Vice President, New Ventures & Global
Exploration

Kei Fukui

Executive Officer

Managing
Executive Officer

Vice President, General Administration General
Manager, General Administration Unit, General
Administration Division

Kazuyoshi Miura

Managing
Executive Officer

Senior Vice President, Domestic Energy Supply &MarketingKoichi Okamoto

Executive Officer

Vice President, Global Energy Marketing

Managing
Executive Officer

Senior Vice President, Europe & Middle East
Projects

Executive Officer

Yuzo Sengoku

Masaru Miyanaga

Vice President, Domestic Energy Supply &Marketing

Yosuke HappoManaging
Executive Officer

Senior Vice President, Logistics & IMT

Isao Takahashi

Executive Officer

Vice President, Abu Dhabi Projects General
Manager, Abu Dhabi Office

Hideki KurimuraManaging
Executive Officer

Senior Vice President, Technical Headquarters, HSE

Kenji Hasegawa

Executive Officer

Hiromi Sugiyama

Managing
Executive Officer

Senior Vice President, Domestic Exploration &Production

Vice President, Corporate Strategy & Planning,
General Manager, Corporate Strategy & Planning
Unit, Corporate Strategy & Planning Division

Senior Vice President, Global Energy Marketing
General Manager, Gas Business Development Unit,
Global Energy Marketing Division

Koji Ochiai

Executive Officer

Hiroshi KatoManaging
Executive Officer

Vice President, Europe & Middle East Projects,
Deputy Managing Director, INPEX Idemitsu Norge
AS

Akihiro Watanabe

Managing
Executive Officer

Senior Vice President, Asia Projects

Yoshiro Konda

Executive Officer

Vice President, Renewable Energy & New Business
Managing Director, INPEX Renewable Energy
Europe Ltd.

INPEX CORPORATION Integrated Report 2022

Collaboration

Collaboration

Reporting

Audit & Supervisory
Board (Member)
Audit & Supervisory
Board Member (full-time)

Audit & Supervisory
Board Members’ Office

Collaboration

Auditing

Accounting
audit

Reporting

ReportingExecutive
Committee

ReportingAppointment/
Dismissal/
Supervision

President & CEO

Appointment/
Dismissal

ReportingAccounting
AuditorCollaboration

Audit Unit

Accounting
audit
Collaboration

Executive Officers
Divisions and Subsidiaries

Internal audit

Business and Financial Overview

Takayuki Ueda

Appointment/
Dismissal/
Supervision

Business
Operation
SystemCompliance Committee

Auditing

Board of Directors
Outside Directors

ReportingInformation Security
Committee
INPEX Value Assurance
System Committee

Appointment/Dismissal/
Setting of range ofcompensation

Appointment/Dismissal/
Setting of range of compensation
Reporting

Sustainability Committee

Executive Officers (As of April 1, 2023)

Company with Audit & Supervisory Board
Members
Number of directors as stipulatedby the Articles of Incorporation............. up to 16
Number of directors(number of outside directors)................. 12 (5)Term of office................................................ 1 year
Number of Audit & Supervisory Board
members as stipulated by the Articles ofIncorporation........................................... up to 5
Number of Audit & Supervisory Board
members (number of outside Audit &Supervisory Board members)................. 5 (4)Term of office................................................ 4 years
9 (5 outside directors, 4 outside Audit &Supervisory Board members)
Issuance of a Class A Stock to the Minister of
Economy, Trade and Industry

Management Foundation to Advance Growth Strategies

Joined Marubeni Corporation
Executive Officer, General Manager of Finance Department,
Marubeni Corporation
Managing Executive Officer
April 2009
June 2010
Representative Director, Managing Executive Officer
Representative Director, Senior Managing Executive Officer
April 2012
Representative Director, Senior Executive Vice President
April 2014
Director, Senior Consultant
April 2018
Consultant
June 2018
Representative Director and President, MG Leasing Corporation
April 2019
(currently Mizuho Marubeni Leasing Corporation)
June 2019
Audit & Supervisory Board Member, INPEX Corporation (incumbent)
April 2022
Senior Adviser, Mizuho Marubeni Leasing Corporation (incumbent)(Concurrently held positions)
Outside Director, Concordia Financial Group, Ltd.

——

Overview of the Corporate Governance Structure

Growth Strategies for Value Creation

Toshiya
Tone

Joined Ministry of Finance
Deputy Commissioner (Planning, Information System
Management, Liquor Tax and Industry), National Tax Agency
Regional Commissioner, Sendai Regional Taxation Bureau
June 2013
July 2014
Deputy Director General, Office for the Promotion ofRegulatory Reform, Cabinet Office
July 2017
Regional Commissioner, Kantoshinetsu Regional Taxation Bureau
July 2018
Deputy Director-General for Cybersecurity and Information
Technology Management, Ministry of FinanceDirector-General for Policy Planning, Ministry of Land,
July 2019
Infrastructure, Transport and Tourism (resigned in July 2020)
November 2020 Executive Advisor, NEC Corporation (resigned in March 2023)
March 2023
Audit & Supervisory Board Member (outside) (incumbent)—

Company’s five Audit & Supervisory Board members are also
appointed from external sources. In addition to putting inplace an Audit & Supervisory Board, INPEX has set up the
Audit & Supervisory Board Members’ Office and deployed
dedicated staff and is reinforcing collaboration between Audit & Supervisory Board members and the Audit Unit, as wellas independent auditors.

INPEX has adopted an Audit & Supervisory Board Member
organizational structure, under which Audit & Supervisory
Board members audit the execution of operations, which arein turn carried out by directors well versed in their field. In
addition, the Company has introduced an Executive Officer
System to pursue management with agility and efficiency.
INPEX frequently engages in negotiations with the governments of oil-producing countries and overseas oil companies. This necessarily requires internal directors andexecutive officers who have knowledge, expertise and international experience relating to the Company’s business andboth a sound knowledge of the Company and their particular field of expertise. Internal directors, in principle, hold theconcurrent position of executive officers. By adopting thisconcurrent organizational structure, the Company’s Board of
Directors is better placed to execute operations in an efficient manner. At the same time, this structure helps to ensure effective operating oversight. In addition to enhancing
the transparency of management and bolstering the abilityof the Board of Directors to carry out its supervisory function,
INPEX has appointed five of its 12-member Board of Directors from outside the Company. Through this initiative, steps
have been taken to ensure that management issues are considered and deliberated with a greater degree of objectivity
from an independent standpoint. Moreover, four of the

Corporate Governance Guidelines
The mission of the Company is to contribute to the creationof a brighter future for society through our efforts to develop,
produce and deliver energy in a sustainable way. Through ourbusiness, we aim to become an integrated energy company
that contributes to the community and makes it more agreeable and prosperous. Based on this mission, to achieve sustainable growth and increase corporate value over the
medium to long term, the Company fulfills its social responsibilities in cooperation with its shareholders and other stakeholders, and works to enhance its corporate governance forthe purpose of conducting transparent, fair, timely anddecisive decision making. The INPEX Group made clear its
basic views and policies on corporate governance and, withthe aim of ensuring transparency and fairness in the Company’s decision making, as well as realizing effective corporate
governance by carrying out the proactive dissemination of information, formulated its Corporate Governance Guidelines.
Please refer to our Web site for details.

INPEX CORPORATION Integrated Report 2022

69

Corporate GovernanceDirectors and the Board of Directors

 udit & Supervisory Board Members andA
the Audit & Supervisory Board

Compliance Committee

Information Security
Committee

Executive Committee

INPEX Value Assurance
System Committee
To further enhance the efficacy of the corporate governancefunction, INPEX has set up
the Nomination and Compensation Advisory Committee,
the INPEX Advisory Committee,
the Compliance Committee andthe Sustainability
Committee. In addition, the Company maintains
the Corporate HSE Committee, the Information Security Committee and the INPEX Value Assurance System Committee toappropriately manage risks associated with business
operations.
Nomination and Compensation Advisory CommitteeNumber of meetings held in FY2022: 5

The Nomination and Compensation Advisory Committee
was established in January 2017 with the aim of strengthening the functional independence and objectivity as well as
accountability of the Board of Directors in connection with
the nomination of and compensation paid to directors.
INPEX Advisory CommitteeNumber of meetings held in FY2022: 2Compliance CommitteeNumber of meetings held in FY2022: 6

The Compliance Committee was established in April 2006
with the aim of promoting compliance initiatives acrossthe entire Group. The committee formulates fundamental
compliance policies applicable to the Group, deliberates
on important matters and manages the manner in which
compliance is practiced.



Number of meetings held in FY2022: 2

In April 2012, the INPEX Group established the CSR Committee with the aims of better fulfilling its corporate social
responsibility and promoting activities that contribute to
the sustainable development of society. The committee discusses basic policies regarding sustainability and importantmatters pertaining to sustainability implementation including corporate governance and climate change response.

INPEX CORPORATION Integrated Report 2022

INPEX Value Assurance System CommitteeNumber of meetings held in FY2022: 25

The INPEX Value Assurance System Committee was established in May 2014 to contribute to the Company’s decision-making process with respect to confirmation of thestatus of preparations in connection with important milestones of major projects in which INPEX participates, andto improve and promote the value of the projects.

Corporate HSE Committee
Discussed matters including the revision of the Health,
Safety and Environment Policy, establishment of commitment to environmental management, establishment of a
Corporate HSE Mid-term Plan in line with INPEX Vision@2022 and establishment of corporate HSE key objectives/programs for fiscal 2023.
Information Security Committee
Discussed matters including the approval of plans for information security activities, reports on associated activities, improvement of information security regulations andreports on measures to increase information security
awareness.

Monitoring of Management by Outside Directors and Audit & Supervisory
Board Members
Outside Directors
Regarding the appointment of outside directors, we believethat it is important to comprehensively consider a variety offactors. These factors include the validity of business decisions
and consideration of their effectiveness, expertise and objectiveness in the oversight function in addition to the perspective of independence. As corporate managers, academics orother specialists, the Company’s five outside directors possess
broad knowledge and many years of experience in such fields
as resource/energy industry, finance and legal matters. One ofthe outside directors concurrently serves as advisor to Mitsubishi Corporation, which is a shareholder of the Company. As
INPEX and Mitsubishi Corporation are engaged in businessactivities in the same fields, there is a possibility of conflicts ofinterest arising. Accordingly, the Company recognizes the necessity to pay particular attention to corporate governance.
INPEX considers it important for all its directors, including theoutside director who concurrently serves at Mitsubishi Corporation as mentioned above, to carry out their management
duties while maintaining a high level of awareness at all times
on matters including the obligation to prohibit competition
under the Companies Act, the appropriate handling of transactions with conflicts of interest and the prevention of information leakage. The Company has therefore obtained
pledges confirming these points from all directors including
the outside director referred to above.

Outside Audit & Supervisory Board Members
When appointing outside Audit & Supervisory Board members, we believe that it is important to comprehensively consider factors such as independence, efficacy in the oversightfunction and professionalism. Four of the Company’s five
Audit & Supervisory Board members are appointed from external sources. Audit & Supervisory Board members possessa rich knowledge and experience in the Company’s businessas well as in such fields as finance, legal affairs and management, which they use when performing auditing activities for
the Company.

	Independence of Outside Directors andOutside Audit & Supervisory Board Members
The Company has reported all outside directors and outside
Audit & Supervisory Board members as independent directors as defined by Tokyo Stock Exchange, Inc. As a part of efforts to comply with the Corporate Governance Code, INPEX
has formulated independence standards for outside directors
and outside Audit & Supervisory Board members taking into
consideration the independence standards and qualifications
for independent directors issued by the Tokyo Stock Exchange. The Company determines the independence of outside directors, including major shareholders and business
partners that do not fall within the scope of these standards.
Independence Standards for Outside Directors and Outside
Audit & Supervisory Board Members

Business and Financial Overview

The INPEX Advisory Committee was established in October
2012 with the aim of enhancing corporate value and thecorporate governance function. Comprising external experts in a broad spectrum of fields, the committee provides
the Board of Directors with multifaceted and objective advice and recommendations across a wide range of areas.
Areas of discussion and advice include international political and economic conditions, an outlook of energy conditions and ways in which to bolster corporate governance.

Number of meetings held in FY2022: 2

The Information Security Committee was established in
November 2007 to consider and determine all appropriate
measures necessary to maintain, manage and strengthen
information security. The committee also takes steps toaddress any incident relating to information security andto put in place preventive measures.

Corporate HSE Committee

Sustainability Committee

70

Information Security Committee



Sustainability Committee

Executive Committee and Executive Officer System
From the perspective of increasing the speed of decision
making related to the execution of business, we have established an Executive Committee. Meetings are held weekly
and as necessary. At the Executive Committee, flexible decision making is conducted for resolutions not affiliated with theBoard of Directors, and deliberation is held to contribute todecision making by the Board of Directors. We implemented
an Executive Officer System to respond accurately and quickly
to a rapidly changing management environment and the expansion of our business activities. The term of office for executive officers is set to one year, the same as for directors.

INPEX Advisory Committee

Board of Directors

Management Foundation to Advance Growth Strategies

The Audit & Supervisory Board is composed of five Audit &Supervisory Board members, four of which come from outside. In addition to attending meetings of the Board of Directors and the Executive Committee, the Audit & Supervisory
Board members review the execution of business duties bydirectors and executive officers through reports from and interviews with related departments. Furthermore, the Audit &Supervisory Board members meet on a regular and as needed basis with the Independent Auditors to receive reports on
audits from them and exchange views on key audit issues.
The Audit & Supervisory Board members also exchange views
with the internal audit department (Audit Unit) as it develops
annual audit plans and receive quarterly reports on internal
audits conducted by the Audit Unit. In addition, the full-time
Audit & Supervisory Board members are informed by the Audit Unit about internal audits and the evaluation of internal
controls, as necessary. To strengthen the auditing functionand ensure effective corporate governance, the Audit & Supervisory Board Members’ Office has been set up with fulltime staff assigned to it. In this manner, efforts are being
made to promote collaboration between the Audit & Supervisory Board members, the Audit Unit and the Independent
Auditors. Moreover, we have constructed a system tostrengthen the monitoring function through periodic meetings with representative directors and directors.

Nomination and Compensation
Advisory Committee

Sustainability Committee
Discussed matters including the basic policy and measures for climate change action, the assessment of climate-related risks and opportunities and the endorsementof the Small and Medium Enterprise Agency’s Declarationof Partnership Building.

Growth Strategies for Value Creation

The responsibilities of the Board of Directors shall be to fully
exercise its supervisory function, secure fairness and transparency in management, and ensure sustainable growth and increase corporate value over the medium to long term throughimplementation of effective corporate governance, with recognition of its fiduciary responsibility to shareholders. The
Company’s Board of Directors comprises 12 members, five ofwhom are outside directors. In addition to a monthly meeting,the Board of Directors meets as necessary to discuss and determine matters concerning management strategy and important business execution, and to supervise the execution ofduties by directors. The term of office for directors is set at
one year. In addition to enhancing the ability of directors to
respond to changes in the Company’s global operating environment in a timely manner, this initiative helps to further clarify management responsibilities.

Examples of discussions held by internal committees

Number of meetings held in FY2022: 9

In accordance with the HSE Management System, theCorporate HSE Committee was established in October2007 to promote health, safety and environmental initiatives. In addition to formulating corporate HSE policies
and priority targets for each period, the committee advances HSE activities across the organization.

Internal Committees

INPEX’s Vision and Value Creation

Corporate HSE Committee

Overview of Each Committee

The Company shall, based on the independence criteria set
forth by the Tokyo Stock Exchange, determine that an Outside Director or an Outside Audit & Supervisory Board Member is independent from the Company if he or she falls undernone of the following items.
1. A major shareholder of the Company (who directly or indirectly holds 10% or more of the Company’s voting rights)
or an executive thereof
2. A person whose major business partner is the Company (*1)
or an executive thereof
3. A major business partner of the Company (*2) or an executive thereof
4. A legal professional, accountant, or consultant who receives money or other properties of more than ¥10 million
per year on average over the past three (3) years from theCompany or its subsidiary, excluding compensation for Directors or Audit & Supervisory Board Members (if the person receiving such properties is an organization such as alegal entity or a partnership, a person who belongs to suchorganization)
5. An accounting auditor of the Company or its subsidiary (ifsuch accounting auditor is an accounting firm, a person
who belongs to such accounting firm)

INPEX CORPORATION Integrated Report 2022

71

Corporate GovernanceTo support outside directors in their exercise of supervision
over management, the Company ensures that they receive materials to be used at Board of Directors meetings at least threedays in advance as a rule, and that they are briefed on important matters on the agenda before meetings.
The Company has also assigned four dedicated audit assistants to the Audit & Supervisory Board Members’ Office, an organization that supports Audit & Supervisory Board members,
including outside members. These assistants perform their duties as instructed by Audit & Supervisory Board members.
Moreover, the Company regularly organizes meetings ofoutside directors, Audit & Supervisory Board members andrepresentative directors several times a year as opportunities
for them to broadly exchange opinions on important management topics.

Fiscal 2022
evaluation
results

New issues

72

Action on issues

Process ofeffectivenessevaluation

Review ofevaluation results
and identification ofissues by the Boardof Directors

Tabulation/
analysis ofresults

Discussion among
outside directors, Audit
and Supervisory Board
members andrepresentative directors

The overall effectiveness of the Board of Directors was confirmed to be sufficient, as in the previous fiscal year.
Self-evaluation of each director and Audit & Supervisory Board member
Composition, operation, roles and responsibilities of the Board of Directors
Operation of the Nomination and Compensation Advisory Committee
Improvement of the issues identified in the previous evaluation, etc.
Online briefings for part-time officers prior to Board of Directors meetings
Expanded briefings on background information in discussions on new issues
Lectures and opinion exchange meetings for the Board of Directors by external
experts, etc.

Expand discussions on management strategy Further revitalize discussions at Board of Directors meetings
Hold in-depth discussions on the desired state of the Board of Directors Continue strengthening portfolio management

INPEX CORPORATION Integrated Report 2022

 eepened discussions at the Nomination and Compensation Advisory Committee on greater diversity in Board memberDship, as well as on the appropriate Board size and composition, and shared the results with the Board of Directors
Expand discussions on portfolio management
 ppropriately monitored trends of changes in the business environment and secured opportunities for timely discussions
A
on the optimization of INPEX’s overall portfolio
Held a Board meeting in Abu Dhabi, one of our core business areas, to deepen the understanding of business among theBoard members, including part-time officers, and to help them build relationships with local stakeholders, such as partners and communities[Board meeting held in Abu Dhabi]

Hold deeper discussions on management strategy, including plans for each net zero business and their progress
Hold deeper discussions on the desired state of the Board of Directors
Further revitalize discussions at Board of Directors meetings Enhance discussions on portfolio management[Evaluation highlights]
The evaluation appreciated theinitiatives listed to the right and called
for their continuation.

Hold in-depth discussions on the desired state of the Board of Directors

Survey pdates on issues identified in the previous effectiveness evaluation and the effectiveness evaluation method for the curU
rent fiscal year were discussed at a meeting with outside directors and Audit & Supervisory Board members.
The method of self-evaluation by the Board of Directors, which was validated by a third-party evaluation organization during
fiscal 2020 evaluation, was adopted.

Evaluation
results

 ade clear the key points of contention of agenda items through pre-meeting online briefings and disclosure of the content
Mof related discussions at Executive Committee meetings, and secured appropriate deliberation time for each itemEnsured that the Board members are informed of the latest oil price and exchange rate trends and definitions of industry
terminology, and fostered a better understanding of individual and new topics among Board members, including parttime officers, through appropriate briefings on the origins of those topics and other background information
Organized a lecture by an expert on Middle East affairs and held an opinion exchange meeting between the expert andBoard members

INPEX held a meeting of its Board of Directors on January 24, 2023,
in Abu Dhabi in the United Arab Emirates (UAE) to highlight its
commitment to the UAE over the next 50 years. INPEX is engaged
in the development and production of crude oil in the UAE throughJapan Oil Development, Co., Ltd. (JODCO), a wholly owned subsidiary that is commemorating the 50th anniversary of its establishment in 2023.
The Board of Directors discussed INPEX’s future business strategies in the UAE for the next 50 years in addition to initiatives on enhancing low-carbon crude oil production in Abu Dhabi, developing
a clean energy business based on hydrogen and ammonia, andstrengthening social contribution activities aimed at bolstering ties
between Japan and the UAE, the host country of the 28th sessionof the Conference of the Parties (COP28) to the United Nations
Framework Convention on Climate Change (UNFCCC).
The directors also exchanged opinions with H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Managing Director & Group CEO of ADNOC, who is planned to chair COP28. He expressed his appreciation for
INPEX’s commitment to the UAE’s energy sector and his desire to strengthen the partnership between ADNOC and INPEX
in decarbonization, hydrogen and low-carbon and clean energy solutions to support the energy transition and advance progressive climate action.

Business and Financial Overview

Issuesidentified in
Fiscal 2021

 eard updates on developments and action plans of each business at monthly Board meetings; heard and discussed matHters on which notable progress was made as individual agenda items
Held focused discussions on key managerial issues and topics that need to be addressed from medium- to long-term perspectives as matters for deliberation
Appropriately grasped government policy trends in Japan and abroad that have a large impact on business and incorporated them into discussions on management strategy

Management Foundation to Advance Growth Strategies[Evaluation method]

Hold in-depth discussions on management strategy including planned initiatives and progress of each of the 5 net zero businesses

Further revitalize discussions at Board of Directors meetings

 upport System for Outside Directors andS
Outside Audit & Supervisory Board Members

Evaluation of the Effectiveness of the Boardof Directors
With the aims of regularly verifying that the Board of Directors is functioning appropriately and identifying issues to beresolved for continuous improvement, the Company undertakes an evaluation of the effectiveness of the Board of Directors each year, and discloses a summary of the evaluation
results. Based on this policy, the eighth evaluation was conducted in fiscal 2022. The evaluation method and summary of
the results are as follows. Based on these evaluation results,
the Company will continue to strive to improve the effectiveness of the Board of Directors.

Discussions at Board of Directors Meetings
The following activities were conducted in fiscal 2022 in light of the results of the fiscal 2021 evaluation of the effectivenessof the Board of Directors and other factors.

Growth Strategies for Value Creation*1 “A person whose major business partner is the Company” refers to a business partner whose business relationship with the Company may have an
influence on decision-making of business, etc. of said business partner tothe same extent as said business partner’s parent company, subsidiary oraffiliate. Specifically, this could be a so-called subcontractor whose

consolidated net sales from transactions with the Company account for aconsiderable part of the said subcontractor’s consolidated net sales, etc.
*2 “A major business partner of the Company” refers to a business partner
whose business relationship with the Company may have an influence on
decision-making of business, etc. of the Company to the same extent as theCompany’s parent company, subsidiary or affiliate. Specifically, this could be
the counterparty in transactions with the Company whose consolidated net
sales from the transactions account for a considerable part of the Company’s
consolidated net sales, or a supplier who provides merchandise and services
which are essential to the business activities of the Company.
*3 Specifically, a “material” person is assumed to be an officer, generalmanager or equivalent of each company/business partner in case of thepersons referred to in items 1 through 3, and a certified public accountant who belongs to each accounting firm or a lawyer who belongs toeach law firm (including so-called associates) in case of the persons who
belong to organizations referred to in items 4 and 5.

INPEX’s Vision and Value Creation

6. A person who receives donations or subsidies of more than
¥10 million per year on average over the past three (3) years
from the Company or its subsidiary (however, if the person receiving the donation or subsidies is an organization such as alegal entity or a partnership, a director or other officer managing the business of the organization to which the amountof such donations or subsidies exceeds the greater of ¥10
million per year or 30% of the total expenses per year of suchorganization, on average over the past three (3) years)
7. A person who fell under any of items 1 through 6 above inthe past three (3) years
8. A relative within the second degree of kinship of a person
who falls under any of (a) through (d) below (excluding persons who are not material (*3))(a) A person who falls under any of items 1 through 7 above(b) An executive of a subsidiary of the Company(c) A non-executive Director or an accounting advisor ofa subsidiary of the Company (limited to cases where said
Outside Audit & Supervisory Board Member is to be designated as an Independent Audit & Supervisory Board
Member)(d) A person who fell under item (b) or (c) above or an executive of the Company in the most recent three (3) years(including a non-executive Director, if said Outside Audit& Supervisory Board Member is to be designated as an
Independent Audit & Supervisory Board Member)
9. Other than each of the preceding items, a person who is substantially judged by the Company to possibly cause a conflictof interest with ordinary shareholders of the Company

Class A Stock
According to the stipulations of the Articles of Incorporation,
INPEX issues a Class A Stock to the Minister of Economy,
Trade and Industry. Unless otherwise provided by laws or ordinances, the Class A Stock does not possess voting rights
at shareholders’ meetings. However, it is possible for theholder of the Class A Stock to exercise veto rights for certain
major corporate decisions. We believe the holding of Class
A Stock by the Minister of Economy, Trade and Industry will
help prevent any incidence of unusual management, allow
INPEX to stably supply energy as a core company for Japan’soil & gas E&P and ensure that the Company does not incur
any negative impact from a speculative acquisition or an attempt at management control through foreign capital. On
this basis, INPEX’s role is assured. Furthermore, we expect
positive results in terms of external negotiation and credits
as a national flagship company efficiently contributing to thestable supply of energy in Japan.

INPEX CORPORATION Integrated Report 202273

Corporate Governance

KPIs used to calculate bonuses for directors (excluding
outside directors)

Financial
indices

Bonus KPI

Evaluation weight

Net income

45%

Cash flows from operating
activities before exploration

Non-financial Safety index (zero major
index
accidents)

45%

in the Medium-term Business Plan, namely, net income, cash
flows from operating activities before exploration, ROE andtotal payout ratio, as well as to the production cost per barrel and net carbon intensity, which are our major non-financial indices. The amount of compensation is calculated
based on the evaluation weights in the table below according to the degree of achievement of these targets, and thefinal amount of compensation fluctuates within the range of
0% to 200%. In the event that any of the eligible directors
and officers commit a significantly improper or violating act,
the Company may cancel or forfeit their right to receive theCompany’s shares or other forms of compensation under thesystem (malus) and demand the return of cash corresponding to the Company’s shares or other forms of compensation
already delivered to them (clawback).
KPIs used to calculate performance-linked stock-based
remuneration for directors (excluding outside directors)
and executive officers
Stock-based remuneration KPI

Evaluation weight

Net income

30%

Cash flows from operating
activities before exploration

30%

ROE

10%

Total payout ratio

10%

Financial
indices10%

Non-financial Production cost per barrel
indices
Net carbon intensity

10%
10%

Regarding the compensation for directors, the Nomination
and Compensation Advisory Committee deliberates on major
matters in accordance with the policy for determining theamount and calculation method of compensation, etc. for directors and the details of compensation, etc. for individual directors, and submits a report to the Board of Directors. Basedon the report from the Committee, the Board of Directors decides on the compensation for directors within the limits andterms approved at the general meeting of shareholders. The
amount of compensation to be paid to each director by typeis decided by the Representative Director, President & CEO,who shall be entrusted to do so by a resolution of the Board

Compensation for Directors and Audit & Supervisory Board Members in FY2022
Total compensation by type(millions of yen)
Basiccompensation

Bonus

Number of eligible
directors and Audit &Supervisory Board
Stock-based
members
remuneration(persons)

Directors(excluding outside directors)

525

368

119

37

9

Audit & Supervisory Board members(excluding outside Audit &Supervisory Board members)

33

33

-

-

1

Outside directors and outside Audit& Supervisory Board members

165

165

-

-

11

Notes:
1. The above table includes four directors (including two outside directors) who resigned at the conclusion the 16th Ordinary General Meeting of Shareholders held on
March 25, 2022.
2. The basic compensation for directors was resolved to be an annual amount, including bonuses, of not more than 900 million yen (including an amount not more than 100
million yen for outside directors) at the 16th Ordinary General Meeting of Shareholders held on March 25, 2022. The number of directors as of the date of this resolution
was 12 (including five outside directors).
3. The basic compensation for Audit & Supervisory Board members was resolved to be an annual amount of not more than 140 million yen at the 16th Ordinary General
Meeting of Shareholders held on March 25, 2022. The number of Audit & Supervisory Board members as of the date of this resolution was five.
4. Bonuses and stock-based remuneration are regarded as performance-based compensation. Stock-based remuneration is also regarded as non-monetary compensation.
5. At the 12th Ordinary General Meeting of Shareholders held on June 26, 2018, it was resolved that a stock-based remuneration system be introduced for directors andexecutive officers (the BIP Trust). The amount of the stock-based remuneration presented in the table represents the fees incurred regarding the stock-based points
granted during the business year under review concerning the BIP Trust for directors. At the 16th Ordinary General Meeting of Shareholders held on March 25, 2022, themaximum amount of money to be contributed per business year by the Company was revised to 434 million yen, and the maximum points granted per business year to
those eligible for the system was revised to 806,000 points (equivalent to 806,000 shares of the Company). The number of directors (excluding outside directors and nonresidents of Japan) as of the date of this resolution was seven.

74

INPEX CORPORATION Integrated Report 2022

In accordance with the Companies Act and the Financial Instruments and Exchange Act, we accept accounting audits
from Ernst & Young ShinNihon LLC. The amount of auditor
compensation is determined in total based on the audit planand the number of auditing dates, after obtaining approval
from the Audit & Supervisory Board.
(1) Status of accounting audit
Name of CPA firm

Ernst & Young ShinNihon LLC

Cumulative accounting
audit period

47 yearsName of CPAs
conducting accounting
audit

Kazuhiko Yamazaki, Satoshi Takahashi,
Mikio Shimizu, Kentaro Moronuki

Accounting audit
members

33 CPAs, 5 persons who passed an
accounting exam, etc., and 30 others(2) Compensation paid to the CPAs
Compensation forauditing services¥440 million
INPEX: 352 million;
Consolidated subsidiaries: ¥88 million

Compensation for
non-auditing services¥11 million
INPEX: ¥3 million;
Consolidated subsidiaries: ¥7 million(3) Compensation paid to the network firm (excluding (2))
Compensation forauditing services¥150 million
INPEX: —;Consolidated subsidiaries: ¥150 million

Compensation for
non-auditing services¥146 million
INPEX: ¥3 million;
Consolidated subsidiaries: ¥143 million

Policy Concerning Cross-shareholdings
For the purpose of achieving sustainable growth and increasing corporate value over the medium to long term,when it is deemed necessary to hold shares in corporations
in order to maintain good relationships, and to promotebusiness smoothly and generate business opportunities, theCompany will hold shares in such corporations to the extent
necessary.
Each year, the Company will, at the Board of Directors
meeting, assess whether or not to hold each individualcross-shareholding, specifically examining whether the purpose is appropriate and whether the benefits and risks fromeach holding accord with the Company’s cost of capital. As aresult of the assessment, if it is determined that the necessityof any cross-shareholdings has decreased, such cross-shareholdings will be reduced.
With respect to the voting rights as to the cross-shareholdings, the Company will determine the matters to be
confirmed for each proposal to shareholders, such as appropriation of surplus, election and compensation of officers
and company reorganization. Decisions whether or not toapprove proposals will be made after full consideration of
the appropriateness of the proposals and whether they willcontribute to the purpose of the cross-shareholdings andthe sustainable growth and increased corporate value overthe medium to long term of the companies invested in.

Business and Financial Overview

Classification

Total amount ofcompensation paid
(millions of yen)Accounting Audit and Auditor Compensation

Management Foundation to Advance Growth Strategies

Stock-based remuneration as a medium- to long-term incentive is paid to directors (excluding outside directors andnon-residents of Japan) and executive officers (excluding
non-residents of Japan) (hereinafter collectively the “eligible
directors and officers”). This remuneration system is called
the Board Incentive Plan Trust, and it combines performance-based elements aimed at raising the awarenessamong the eligible directors and officers of their contribution to the Company’s medium- to long-term business performance and enhancement of corporate value, and fixed
elements aimed at strengthening the awareness among theeligible directors and officers of sharing interests with shareholders through the ownership of the Company’s shares. The
performance-based portion of the stock-based remuneration is linked to the Company’s key financial indices set forth

The adequacy of compensation for directors is verified by
the Nomination and Compensation Advisory Committee after an external compensation research organization examines and analyzes the level of compensation for eachposition in a peer group of companies of the same size andsimilar industries.
The ratios of the basic compensation, bonuses and stockbased remuneration for inside directors are generally balanced to follow the principle that the higher the position
held by a director is, the higher the weight of his or her performance-based compensation (bonuses and stock-based
remuneration) is.

Growth Strategies for Value Creation

Compensation for directors (excluding outside directors)
consists of basic compensation, which is paid according to
the duties of each director; bonuses, which serve as a shortterm incentive; and stock-based remuneration, which gives a
medium- to long-term incentive. Compensation for outside
directors is limited to basic compensation only from the perspective of independence of their duties.
Bonuses as a short-term incentive is linked to the Company’s net income attributable to owners of parent (hereinafter“net income”) and cash flows from operating activities before exploration, which are our major financial indices, aswell as a safety index (zero major accidents) that serves as a
non-financial index. The amount of compensation is calculated based on the evaluation weights in the table below according to the degree of achievement of these targets, andthe final amount of compensation fluctuates within the range
of 0% to 200%.

of Directors, in accordance with the deliberation by the Nomination and Compensation Advisory Committee, a majority ofwhose members are outside officers, including independent
outside directors.
Considering the external environment, social and economic trends, and other factors surrounding the Company,
the Nomination and Compensation Advisory Committee will
carefully deliberate on the appropriateness of the target values and calculation method for compensation and issue areport, based on which necessary adjustments may be madeto the amount of compensation for each director by a resolution of the Board of Directors.

INPEX’s Vision and Value Creation

Director Compensation

Cross-shareholdings (excluding deemed holdings of equity securities)
Shares other than unlisted shares

End of fiscal 2019

End of fiscal 2020

End of fiscal 2021

End of fiscal 2022

18

15

10

8

Total carrying amount on balance
sheet

36,584 million JPY

23,368 million JPY

22,866 million JPY

11,953 million JPY

Unlisted shares

End of fiscal 2019

End of fiscal 2020

End of fiscal 2021

End of fiscal 2022

Number of issues

31

31

31

31

15,158 million JPY

14,980 million JPY

11,136 million JPY

10,938 million JPY

Number of issues

Total carrying amount on balance
sheet

INPEX CORPORATION Integrated Report 2022

75

Roundtable with Outside Officers

Kimihisa Kittaka,

Hideka Morimoto,Director (Outside)

Hiroko Kiba,

Audit & Supervisory Board
Member (Outside)

We recently held a roundtable inviting some of our outside officers and senior managers of relevant business
functions to discuss the Company’s progress over the past year to addressing the key sustainability issues
and initiatives set out in our long-term strategy and medium-term business plan, INPEX Vision @2022. Participants also touched on the sustainability trends and challenges in their respective areas.

Q1 Evaluation of INPEX’s Energy Transition Initiatives––––Kittaka It has been just over a
year since INPEX announced its
Long-term Strategy and Medium-term Business Plan (INPEX Vision @2022). From your perspective
as outside officers, what is your76

INPEX CORPORATION Integrated Report 2022

impression of the progress that has
been made to date?
Morimoto Although last year was
only the first year of INPEX Vision@2022, I believe the Company has

already achieved steady progress
across its oil and gas business andfive net zero businesses. Despite unsettled conditions worldwide
resulting from the situation in
Ukraine, we were able to achieve

Kiba In 2022, the situation in
Ukraine caused widespread anxiety
across Japan in relation to energy
supply. I think both the Company
and its employees should be proud

Since January this year, we haveprovided support for the television
program “Promise with the Earth –Sceneries Engraved in the Heart*1”,
which showcases the beauty of nature across Japan, and the various
environmental conservation activities being undertaken across thecountry. I believe this program has
great value for us. Sponsorship ofsuch a quality program will increase
our visibility and improve our corporate image. Going forward, I would
like to see more programs that highlight our position on different

INPEX CORPORATION Integrated Report 2022

Business and Financial Overview

Director & Senior Managing
Executive Officer, SeniorVice President, Corporate
Strategy & Planning; Legal
Affairs

Kittaka Climate change response
is one of the pillars of our business;
however, discussions within thecompany tend to be biased towards
risks that need to be addressed tomaintain stable supply from our upstream business operations. For thisreason, we have appointed Mr.
Morimoto to our Board of Directors,
w h e re w e c a n d i s c u s s c l i m a t echange strategies based on his
deep knowledge of this field. In discussions with our Executive Officers,
he has been a driving force in treating our climate change response
through our five net zero businesses
as a profit-making opportunity. His
encouragement is very reassuring as
we continue to promote initiatives inthis area over the coming year.
Likewise, our Executive Officers
have really appreciated Ms Kiba’s
support in providing consistentguidance on the importance ofcommunication with stakeholders,
including employees. This beganwith discussions about two years
ago that led to the creation of ourcurrent INPEX Vision @2022. I feelthere is a growing awareness in thecompany, including among top
management, that we need to be
more proactive in communicating
both internally and externally.
I believe all of our outside officers
truly embody their roles to promotechange to our Executive Officers,
through Board of Directors meetings and other discussions. I lookforward to your continuing support.

Management Foundation to Advance Growth Strategies

Deputy Manager, PR group.
Corporate Strategy &Planning Unit

matters, including our plans for future engagement with nature.

Growth Strategies for Value Creation

Manager, Climate Change
Strategy group, Corporate
Strategy & Planning Unitof the fact that we were able to deliver stable supplies of oil and natural gas under such circumstances.
I did have above thought during myvisit Abu Dhabi.
This past year, we have also been
extremely active in our five net zerobusinesses. The demonstration project Mr. Morimoto mentioned earlier
is just one example of how we canfulfil our social responsibility by becoming a leading company in thehydrogen and ammonia field.
What we should be mindful ofgoing forward is how we communicate these initiatives to our various
stakeholders. In particular, I think it
is important we actively share INPEX
Vision @2022 with our employees toensure they understand and support
our mindset. It is only when all employees work together with a can-do
attitude that we can move along thepath to success.
We also need to make the publicaware of INPEX Vision @2022 and its
associated initiatives to enhance ourcorporate value.

INPEX’s Vision and Value Creation

Masako Takahashi, Yuko Mori,stable operations at each of our
projects, including Ichthys LNG. We
have been able to fulfill our important role in the stable supply ofenergy.
We have also spent much time at
Board of Directors meetings discussing our five net zero businesses,
and I believe we are boldly progressing in this space with many exciting new initiatives, such as
launching an integrated hydrogenand ammonia demonstration projectin Kashiwazaki City, Niigata Prefecture— which, if successful, we hope
will have broader application insociety.
Of course, we need to set up initiatives across all five net zero business areas, but carbon capture andstorage (CCS) and carbon capture,
usage, and storage (CCUS), as wellas hydrogen/ammonia, are the areas
expected to be particularly synergistic with our own technologies andknowledge.
Back in January this year, we helda meeting of the Board of Directors
in Abu Dhabi, the United Arab Emirates (UAE), where INPEX is developing and producing oil and clean
energy such as hydrogen and ammonia. During an opinion exchange,
the UAE Minister of Industry andA d v a n c e d Te c h n o l o g y, S u l t a n
Ahmed Al Jaber, expressed hopes
to continue deepening and strengthening partnerships with INPEX in
the areas of energy transition, decarbonization, hydrogen, and clean
energy development. I feel thismeeting in Abu Dhabi was an opportunity to further strengthen ties
between our two countries by newopportunities to partner in our net
zero businesses in addition to theexisting areas of oil and natural
gas.

77

Roundtable with Outside Officers

INPEX CORPORATION Integrated Report 2022

Morimoto Something I understandonly too well in my work as a university professor is, as Ms. Kiba says,“the importance of conveying rather
than communicating information.”
One-way communication does notwork.
Kittaka Thank you for your various
perspectives. We will definitely continue to work diligently to disclose
information on our climate change
response. On the other hand, we arebeing required lately to disclose information that is rather difficult toMori We consider that the missionof our public relations activities is topromote a deep understanding ofour business and the direction ourcompany for both internally and externally. To that end, we actively engage in public relations on a daily
basis through various medias including our website and social media.
However, since outline of energy industry is not broadly well-known topublic and often includes technicalterms and specialized topics that are

We also want INPEX employees
and employees of INPEX Group
companies to feel a sense of affinity
with our PR and advertising activities. This is why we consider it important to conduct surveys on PR
and advertising activities and reflect
the opinions of our stakeholders.

Kittaka I also believe informationfrom employees like Mr. Takahashi
and Mr. Mori, who are close to thefrontline and know the Company
better than anyone, will resonate
with many people. Thank you all
again for sharing your various insights today. We will endeavor tohave many more opportunities likethis for active exchanges of ideas
between our Executive Officers andoutside officers.
We will also continue our work to
expand our range of information
disclosures and accelerate initiatives
for INPEX Vision @2022.
*1 Broadcast on the Fuji Network across the Kanto
area and Niigata Prefecture, Japan.
*2 Circular economy: A socioeconomic system thatmaximizes efficient and circular use of resources(including use of recycled materials) and effective
use of stock (including product sharing andsecondary distribution) across the full market
lifecycle

Business and Financial Overview

78

Kiba I suspect there will be increasingly more work for us all as thenumber of areas in which we cancreate value as a company increases, such as in water management or
biodiversity conservation. However, I
think we should also be more proactive in highlighting the positive aspects of our business.
My message to my colleagues allalong has been that, regardless ofthe medium, whether reports or advertising, our efforts are pointless if
we are unable to convey our meaning to others. Specifically, I wanttechnical language to be rephrased
into language that anyone can understand. When disclosing information on power generation capacity,
alongside the actual units, I suggested we also include expressions thatconvey a sense of scale to the general public, such as “enough energy
to meet the demands of such-andsuch prefecture”. I am glad to saythat each of my suggestions wasquickly adopted. I think a particularstrength of the Company is its willingness to consider new ideas andto respond promptly and flexibly.

quantify, such as our investment
plans for the coming 20 to 30 years.
We have to be careful in our conversations to ensure people understandthe reason for such challenging
disclosures.
As Ms. Kiba also mentioned, lately we have been using our website
as needed to post information that
we want our stakeholders to know,even for small matters. We need tocontinue such communications whileconsidering the perspectives of all
stakeholders.
Two of our employees, Ms. Takahashi and Ms. Mori, are with us today. As they are both engaged in
information disclosure and communications related to climate change
response and public relations (PR),I would like to ask them for theirthoughts about what has been saidso far.

Kiba Listening to you two today,
I am confident that there is nothing
to worry about. From what you describe, I can see you are closely considering your employees, who areimportant stakeholders, in yourinitiatives.

Management Foundation to Advance Growth Strategies

Morimoto With our Integrated Report and other INPEX reports being
based on INPEX Vision @2022,
I think we are clearly conveying our
future vision to stakeholders. Since
the disclosure of information on climate change response in Japan has
become legally binding this year—
as in the case of mandatory disclosure in annual securities reports—
individual companies will be asked
how they respond to climatechange. Such disclosures will enable
not only investors and financial institutions, but employees as well, tounderstand the current and future
situation at their companies. Accordingly, the work of our public relations and investors relations (IR)functions will become increasingly
important.
New trends in areas such as circular economy*2 and biodiversity arealso beginning to emerge. For example, disclosures on biodiversity
are now mandatory for companies
operating in France, so it is possible
we will see a similar trend in Japan

before long. There is more work to
be done going forward, but I believe the company is well prepared
for this so long as we keep up ourcurrent efforts.

commonly used within the company,
we often find that it is difficult for
t h e a u d i e n c e t o c o m p re h e n d .
Therefore, we make an effort to use
plain language as much as possible
and take care to use expressions
that allow the readers to correctly
understand what we are saying andto convey that information properly.

Growth Strategies for Value Creation––––Kittaka The two main ways we
disclose information is through ourIntegrated Report and Sustainability
Report, coupled with use of our online resources. In communicating
non-financial information, such as
our climate change response, weneed to carefully choose our words
while taking third-party evaluations
into consideration. What advice doyou have in terms of information
disclosure and communication?

Meanwhile, the required content
and depth of information requiredfor disclosures to the outside world
varies widely, and to be honest, it isunlimited. At such times, we goback to the beginning and ask ourselves who the information is for andwhat is the purpose. Disclosure rules
for climate change response are currently moving toward global standardization. We will be sure to
support any changes that are efficient and effective for both the parties making the disclosures and theparties receiving them.

INPEX’s Vision and Value Creation

Q2 Disclosure and Communication of INPEX’s Non-financial Information

Takahashi Since climate change response is a company-wide effort,
I think smooth communication withall internal divisions is important. For
example, discussions related to climate change include extensive useof Western languages and abbreviations, so when talking to other divisions, we try to carefully explain the
topics while avoiding such words
and abbreviations. In addition, in
terms of the five net zero businesses
we are currently promoting, we not
only communicate externally, but weare also working hard on measuresthat raise awareness internally, suchas videos and internal newsletters.

INPEX CORPORATION Integrated Report 2022

79Business and Financial Overview

Message from the Senior Vice President, Finance & Accounting
INPEX’s Vision and Value Creation

Consolidated financial forecasts for fiscal 2023 (as of May 10, 2022)

Daisuke Yamada
Director, Managing
Executive Officer,
Senior Vice President,
Finance & Accounting

Fiscal 2021
results

Fiscal 2022
results

1,244.3 billion 2,324.6 billion

Net sales (JPY)590.6 billion 1,246.4 billion
657.6 billion 1,441.9 billion
223.0 billion

461.0 billion

80

INPEX CORPORATION Integrated Report 2022

Cash flows1 for fiscal 2022
(billion JPY)

1,061.6−377.8

700.0

235.4

2,324.6 billion 1,994.0 billion

Operating income
1,246.4 billion(JPY)
Ordinary income
1,441.9 billion(JPY)
Net income
attributable to owners
461.0 billionof parent (JPY)984.0 billion
1,077.0 billion
300.0 billion

FCF+683.8284.6

INPEX will build a resilient financial base that can withstand low oil price environments over the period of theMedium-term Business Plan 2022–2024. We will maintain a structure that supports stable business operations
and can readily respond to investment opportunities for
future growth, and will constantly monitor trends on
borrowing balance, investment and shareholder returns
and manage financial balance appropriately.
As for financial discipline, our focus will be on flexibly
managing leverage based on the market environment
and trends on investment and shareholder returns. We
strive to maintain our current ratings by securing 400.0
billion Japanese yen or more in liquidity on hand (cashand deposits + commitment line).
In the Medium-term Business Plan 2022–2024, we aretargeting a net debt/equity ratio (including the Ichthys
downstream IJV) of 50% or less in fiscal 2024. In fiscal
2022, the net debt/equity ratio (including the Ichthys
downstream IJV) came in below 50% as a result of ourefforts to reduce interest-bearing debt.
Our financing policy is to adhere to financial discipline, maintain long-term, stable procurement and promote further diversification of procurement methods
toward our Vision for around 2030. We will closely monitor the stance on oil and natural gas financing of majordomestic and foreign financial institutions, raise the ratio of direct procurement (domestic and global bonds)
to a reasonable level according to market trends andcontinue pursuing sustainable finance initiatives.

Long-term credit ratings (as of June 30, 2023)

Moody’s

A2(stable)S&P

A-(positive)

R&I

AA

(stable)JCR

AA+(stable)Approximate net borrowings and net debt/equity ratio(including the Ichthys downstream IJV)INPEX net borrowings (trillion JPY)
Net debt/equity ratio (%)

2.1
75.8

2.0
1.7

Business and Financial Overview

Operating income(JPY)
Ordinary income(JPY)
Net income
attributable to ownersof parent (JPY)

1,400.0

Net sales (JPY)Fiscal 2023
results

Management Foundation to Advance Growth Strategies

Consolidated financial results for fiscal 2022

Cash flows for fiscal 2022
Regarding cash flows for fiscal 2022, including thosefrom the Ichthys downstream IJV, we secured cash flows
from operating activities before exploration investmentsof 1,061.6 billion Japanese yen as a result of stable operations, high oil prices and the depreciation in the Japanese yen.
Net cash used in investing activities totaled 377.8 billion Japanese yen as a result of disciplined investment
decisions and other factors such as delays in the timingof cash payments for investment projects.
Net cash used in financing activities totaled 634.6 billion Japanese yen as a result of repayments of borrowings, share buybacks dividend payments and otheroutflows.

Fiscal 2022
results

Financial strategy

Overview of financial results for the fiscal year ended December 31, 2022
In the fiscal year ended December 31, 2022 (fiscal 2022),
we recorded a net income attributable to owners ofparent of 461.0 billion yen, which represented a record
high for the second consecutive year.
In addition to the rise in crude oil prices and the depreciation in the Japanese yen, the safe and stable operation and production at the Ichthys LNG Project andother projects also contributed to the significant increase in profit.

Consolidated financial forecasts for fiscal 2023

Growth Strategies for Value Creation

INPEX achieved a record-high profit in the fiscal
year ended December 31, 2022, due in part to theimpact of soaring crude oil prices. Our net debt/
equity ratio came in below 50% as we further
strengthened our financial base. We will continue
to flexibly manage leverage based on factors
including the market environment, future
investments and shareholder returns.

Assuming a crude oil price average of 80.0 US dollars
per barrel and an exchange rate average of 130.0 Japanese yen against the US dollar for the full year, we expect to generate net sales of 1,994.0 billion Japanese
yen and a net income attributable to owners of parentof 300.0 billion Japanese yen, as outlined in our consolidated financial forecasts for fiscal 2023.
Regarding the impact on the financial results for fiscal 2023 from oil price and exchange rate fluctuations,
we estimate as of the beginning of the fiscal year that arise (fall) in the Brent crude oil price by 1 US dollar per
barrel would result in an increase (decrease) of 6.0 billion Japanese yen in net income attributable to ownersof parent. Likewise, regarding the impact of exchange
rates, we estimate as of the beginning of the fiscal yearthat a 1 Japanese yen depreciation (appreciation)
against the US dollar would result in an increase (decrease) of 3.2 billion Japanese yen in net income attributable to owners of parent.

65.1
46.0

2020/122021/122022/12−634.60

Available
funds as ofDec. 31, 2021

Cash flows
Cash flows
Cash flows
from operating from investing from financing
activities before
activities
activities2
exploration (incl. exploration
investments)

Available
funds as ofDec. 31, 2022

Notes:
1. Cash flows include those from the Ichthys downstream IJV (Ichthys LNG PtyLtd), an equity-method affiliate.
2. Including translation adjustments related to available funds

INPEX CORPORATION Integrated Report 2022

81

Segment Overview (Fiscal year ended December 31, 2022)

Net sales

Operatingincome(Norway)

74

thousandbarrels

LondonNet sales

million JPY

Operatingincomemillion JPY

Power generated

Net production

313.2(BOE per day)9

millionkWh

Astana(United Kingdom)

Abu Dhabi(United Arab Emirates)

207,082-13,081

Power generated

199.3

thousandbarrels(Singapore)

JakartaDarwinmillion JPY(Australia)

Asia & Oceania
Net sales

Perth(Australia)

Proved reserves (BOE)

Americas82

INPEX CORPORATION Integrated Report 2022

millionkWh

Singapore

Operatingincome

Japan

(USA)

(Indonesia)

thousandbarrels

Asia & Oceania

Houstonmillion JPY(BOE per day)

(BOE per day)Eurasia, Middle East & Africa

million JPY

Net production

Net production

271

thousandbarrels

2,759 million barrels
839 million barrels
128 million barrels
12 million barrels

527,587
277,597

million JPY
million JPY

Net production

Power generated(BOE per day)

425.4

247

Key group company headquarters and offices
in Japan and overseas

Business and Financial Overview

OperatingincomeOperatingincome21

Middle East & Africa

1,252,913
810,885

million JPY

Management Foundation to Advance Growth Strategies

NiigataTokyo

million JPY

million JPY

Japan(Kazakhstan)

Net sales

Net sales

33,712
16,371

Growth Strategies for Value Creation(BOE per day)

Oslo

Americas320,803
172,197

Net production

INPEX’s Vision and Value Creation

Eurasia

thousandbarrels

millionkWh

Note: Net Sales and operating income amounts are rounded down. Proved reserves is rounded off.
Reportable segments have been changed from the first quarter of the fiscal year ending December 2023.

INPEX CORPORATION Integrated Report 2022

83

11-Year Financial Information
INPEX CORPORATION and Consolidated Subsidiaries
INPEX’s Vision and Value Creation

The translation of yen amounts into U.S. dollar amounts is included solely for convenience, as a matter of arithmetic computation only,at ¥132.70=US$1.00, the approximate exchange rate in effect as of December 31, 2022.
Millions of yen

Millions of yen

Millions of yen

Thousands of
U.S. dollars

2013/3

2014/3

2015/3

2016/32017/3

2018/3

2019/3

2019/121

2020/122021/122022/122022/12¥1,216,533¥1,334,625¥1,171,226¥1,009,564¥874,423¥933,701¥971,388¥1,000,005¥771,046¥1,244,369¥2,324,660$17,518,161

Cost of sales

426,326

490,416

525,443526,757

453,846

498,039

413,300

424,702439,852

568,921

943,414

7,109,374

Gross profit

790,206

844,209645,782

482,806

420,576435,662

558,088575,303

331,194

675,448

1,381,245

10,408,779

Operating income

693,447

733,610534,886

390,139

336,452

357,363474,281498,641

248,471590,657

1,246,408

9,392,675

Income before income taxes

718,146

750,077

540,022

328,887

327,525

307,299

494,042510,292

67,394643,457

1,416,196

10,672,162¥182,961¥183,690¥77,820¥16,777¥46,168¥40,362¥96,106¥123,550¥(111,699 )¥223,048¥461,069$3,474,521¥1,106,504¥1,140,204¥1,342,409¥984,345¥942,960¥466,350¥457,711¥419,802¥387,093¥518,864¥729,401$5,496,616

Tangible fixed assets

584,541

951,779

1,497,621

1,752,614

1,928,597

2,044,619

2,278,994

2,275,372

2,069,783

2,259,849

2,473,118

18,636,910

Intangible assets

380,155

439,178458,769

541,471521,253

541,502520,213535,330

441,837446,660

482,704

3,637,558

Investments and other assets

1,544,957

1,506,977

1,200,352

1,091,410

919,362

1,199,913

1,536,625

1,619,489

1,735,804

1,932,821

2,574,629

19,401,876

Total assets

3,616,158

4,038,139

4,499,153

4,369,841

4,312,174

4,252,386

4,793,545

4,849,995

4,634,518

5,158,196

6,259,853

47,172,969

Current liabilities

414,976375,670

365,212319,127

297,465

305,439

372,000

401,483

339,288348,888526,740

3,969,404

Long-term liabilities

530,198

666,432

845,238

871,911807,166

788,078

1,163,961

1,151,334

1,293,890

1,462,897

1,710,742

12,891,801¥2,670,983¥2,996,036¥3,288,703¥3,178,803¥3,207,542¥3,158,868¥3,257,584¥3,297,176¥3,001,339¥3,346,409¥4,022,370$30,311,755¥252,346¥213,513¥216,749¥183,707¥275,810¥278,539¥238,566¥274,730¥292,915¥445,457¥751,284$5,661,522(489,870 )(395,555 )(81,086 )(543,534 )

53,483(351,908 )(682,005 )(288,740 )(417,189 )(130,727 )(525,574 )(3,960,617 )

137,069

48,961(4,177 )

156,726(65,428 )

34,742405,184(48,615 )

126,747(315,215 )(241,928 )(1,823,119 )¥199,858¥117,530¥260,978¥53,813¥316,790¥276,079¥239,652¥173,774¥172,405¥191,213¥211,656$1,594,996¥1,699.10¥1,911.25¥2,099.95¥2,008.34¥2,015.38¥1,997.24¥2,058.95¥2,082.43¥1,874.08¥2,253.17¥2,879.68$21.70

17.50

18.00

18.00

18.00

18.00

18.00

24.00

30.00

24.00

48.00

62.00

0.47

125.78¥53.29¥11.49¥31.61¥27.64¥65.81¥84.61¥(76.50 )¥153.87¥337.37$2.5468.6 %

69.1 %

68.2 %

67.1 %

68.3 %

68.6 %

62.7 %

62.7 %

59.0 %

60.6 %

60.1 %

60.1 %(32.9)(26.0)(15.4)

(8.2)

1.0

14.5

30.0

31.0

38.4

31.3

25.6

25.6

—

—

—

—

—

—

—

—

75.8 %

65.1 %

46.0 %

46.0 %

Results of operations
Net sales

Growth Strategies for Value Creation

Net income (loss) attributable toowners of parent
Financial position
Current assets

Management Foundation to Advance Growth Strategies

Net assets
Cash flows
Cash flows from operating
activities
Cash flows from investing
activities
Cash flows from financing
activities
Cash and cash equivalents at endof the period

Net assets per share3 (Yen)
Cash dividends per share (Yen)
Earnings (loss) per share4 (EPS) (Yen)¥

125.29¥Business and Financial Overview

Per share data2

Financial indicators
Equity ratio (based on institutional
accounting practices)5 (%)
Net D/E ratio (based on institutional
accounting practices)6 (%)
Net D/E ratio (including Ichthys
downstream IJV)7 (%)
Notes
1. Effective from the year ended December 31, 2019, the Company changed its consolidated fiscal year-end from March 31 to December 31. As a result of
this change, the year ended December 31, 2019 was a period of nine months from April 1 to December 31, 2019.
2. The amounts for the years ended March 31, 2013 and 2014 are retrospectively adjusted for a stock split at a ratio of 1:400 of common stock on October 1,
2013.
3. Net assets per share = (Year-end net assets − Year-end non-controlling interests − Year-end net assets applicable to Class A stock)/(Year-end number ofcommon shares issued − Year-end number of treasury shares)

84

INPEX CORPORATION Integrated Report 2022

4. Earnings (loss) per share (EPS) = Net income (loss) attributable to owners of parent/Average number of shares during the period
5. Equity ratio = Net assets excluding non-controlling interests/Total assets
6. Net D/E ratio (based on institutional accounting practices) = (Interest-bearing debt − Cash and deposits)/Net assets excluding non-controlling interests
7. Net D/E ratio (including Ichthys downstream IJV) includes Ichthys downstream Incorporated Joint Venture (Ichthys LNG Pty Ltd) and differs from figures
based on institutional accounting practices. Data after the year ended December 31, 2020 is disclosed.

INPEX CORPORATION Integrated Report 2022

85

INPEX’s Vision and Value Creation

Management’s Discussion and Analysis of Financial Condition
and Results of Operations
BUSINESS ENVIRONMENT
average crude oil sales price for the year ended December 31,
2022 reflected this shift and rose to US$97.71 per barrel, up
US$29.28 from the year ended December 31, 2021.
The foreign exchange market, another important factor that
affects the business of the Group, began to trade at ¥115 level
against the U.S. dollar. On the first half of the year Japanese Yen
climbed to ¥136 level against the U.S. dollar as a result of the
sharp increase in resource prices caused by the Russian invasionof Ukraine and increased U.S. interest rates accompanying theworldwide advance of inflation. The latter half of the year, continued differences in U.S. and Japan monetary policy resulted in appreciation of the U.S. dollar against the yen, reaching the ¥150
level at one point. However, awareness of a decreasing gap between U.S. and Japanese interest rates resulting from decreased
concern over U.S. inflation and the Bank of Japan’s decision to
widen the range of permissible fluctuation in long-term interest
rates led foreign exchange markets to transition to appreciationof the yen towards the end of the year, with TTM closing at¥132.70 against the U.S. dollar, ¥17.68 less than that as of December 31, 2021. Reflecting these situations, the average exchange
rate of the Japanese yen against the U.S. dollar on consolidated
net sales depreciated by ¥21.62 to ¥131.73 per U.S. dollar fromthe year ended December 31, 2021.

Cost of sales
Cost of sales for the year ended December 31, 2022 increased by¥374.4 billion, or 65.8%, to ¥943.4 billion from ¥568.9 billion forthe year ended December 31, 2021.

86

INPEX CORPORATION Integrated Report 2022

Exploration expenses
Exploration expenses for the year ended December 31, 2022 increased by ¥22.7 billion, or 353.1% to ¥29.2 billion from ¥6.4 billion for the year ended December 31, 2021. This was mainly due
to an increase in exploration activities in Japan.
Selling, general and administrative expenses
Selling, general and administrative expenses for the year ended
December 31, 2022 increased by ¥25.8 billion, or 39.8%, to ¥90.7
billion from ¥64.9 billion for the year ended December 31, 2021.

Change¥1,080,290
873,463
204,569
2,257
374,493705,797
22,757
25,832
1,455
655,750
223,392
33,572
2,043
126,850% Change
86.8%
96.5
63.8
12.1
65.8
104.5
353.1
39.8
10.8
111.0
199.0
107.9
27.4
326.6

7,572

7,396

(175)

(2.3)

—
27,26859,446
13,747
6,709—
14,17024,819643,457
429,532
213,924(9,123)¥ 223,048

30,37557,995
165,850
32,378—85,48325,79922,1901,416,196
951,506
464,689
3,620¥ 461,069

30,37530,726
106,404
18,630(6,709)85,483
11,629(2,629)772,739
521,974
250,765
12,744¥ 238,020

—
112.7
179.0
135.5
(100.0)—82.1(10.6)
120.1
121.5
117.2
—
106.7%

Depreciation and amortization
Depreciation and amortization for the year ended December 31,
2022 increased by ¥1.4 billion, or 10.8%, to ¥14.8 billion from
¥13.4 billion for the year ended December 31, 2021. The Group
records depreciation expenses for production facilities that arecovered by concession agreements as cost of sales. In addition,
under its accounting treatment of the PSCs, the Group records
capital expenditures as “Recoverable accounts under production
sharing” instead of capitalizing these costs within tangible fixed
assets and depreciating them. Costs that are recovered in any
given year based on the terms of the PSCs are included in thecost of sales.

Income taxes
Total amount of current income taxes and deferred income taxes
for the year ended December 31, 2022 increased by ¥521.9 billion, or 121.5%, to ¥951.5 billion from ¥429.5 billion for the year
ended December 31, 2021. The Group pays the majority of its
taxes outside Japan. In addition to the high corporate tax rates
imposed in a number of regions, the Group is generally unable todeduct expenses incurred in Japan for such taxes. Despite thepositive effects attributable to the application of the foreign tax
credit system, this situation resulted in a high effective income tax
rate.

Operating income
As a result of the above, operating income for the year ended
December 31, 2022 increased by ¥655.7 billion, or 111.0%, to¥1,246.4 billion from ¥590.6 billion for the year ended December
31, 2021.

FINANCIAL POSITION

Other income
Other income for the year ended December 31, 2022 increasedby ¥223.3 billion, or 199.0%, to ¥335.6 billion from ¥112.2 billion
for the year ended December 31, 2021. This was mainly due to anincrease in equity in earnings of affiliates.
Other expenses
Other expenses for the year ended December 31, 2022 increasedby ¥106.4 billion, or 179.0%, to ¥165.8 billion from ¥59.4 billion forthe year ended December 31, 2021. This was mainly due to posting modification loss on financial assets.

Consolidated total assets as of December 31, 2022 increased by¥1,101.6 billion, or 21.4%, to ¥6,259.8 billion from ¥5,158.1 billion
as of December 31, 2021. Current assets increased by ¥210.5 billion, or 40.6%, to ¥729.4 billion from ¥518.8 billion as of December 31, 2021, due to an increase in accounts receivable-trade andcontract assets, posting of securities, and others. Fixed assets increased by ¥891.1 billion, or 19.2%, to ¥5,530.4 billion from
¥4,639.3 billion as of December 31, 2021, due to increases in tangible fixed assets, investments and other assets, and others.
Meanwhile, total liabilities increased by ¥425.6 billion, or
23.5%, to ¥2,237.4 billion from ¥1,811.7 billion as of December 31,
2021. Current liabilities increased by ¥177.8 billion, or 51.0%, to¥526.7 billion from ¥348.8 billion as of December 31, 2021. Longterm liabilities increased by ¥247.8 billion, or 16.9%, to ¥1,710.7
billion from ¥1,462.8 billion as of December 31, 2021.

Net income (loss) attributable to non-controlling interests
Net income attributable to non-controlling interests for the year
ended December 31, 2022 was ¥3.6 billion compared with ¥9.1
billion of net loss attributable to non-controlling interests for theyear ended December 31, 2021.
Net income attributable to owners of parent
As a result of the above, net income attributable to owners ofparent for the year ended December 31, 2022 increased by ¥238.0
billion, or 106.7%, to ¥461.0 billion from ¥223.0 billion for the year
ended December 31, 2021.

Business and Financial Overview

Net sales
Consolidated net sales for the year ended December 31, 2022 increased by ¥1,080.2 billion, or 86.8%, to ¥2,324.6 billion from
¥1,244.3 billion for the year ended December 31, 2021 due to anincrease in sales price of crude oil and natural gas.
Compared with the year ended December 31, 2021, net salesof crude oil increased by ¥873.4 billion, or 96.5%, to ¥1,778.6 billion from ¥905.1 billion, and net sales of natural gas increased by¥204.5 billion, or 63.8%, to ¥525.1 billion from ¥320.5 billion.
Compared with the year ended December 31, 2021, sales volume of crude oil increased by 17,998 thousand barrels, or 15.0%,
to 138,116 thousand barrels. Sales volume of natural gas decreased by 22,389 million cf, or 4.8%, to 442,416 million cf. Sales
volume of overseas natural gas decreased by 16,777 million cf, or
4.4%, to 360,291 million cf, and sales volume of domestic natural
gas decreased by 150 million m3, or 6.4%, to 2,201 million m3(82,125 million cf).
Compared with the year ended December 31, 2021, the average sales price of overseas crude oil increased by US$29.28, or
42.8%, to US$97.71 per barrel. The average sales price of overseas natural gas increased by US$2.21, or 44.6%, to US$7.17 per
thousand cf, and the average sales price of domestic natural gas
increased by ¥37.0, or 80.9%, to ¥82.73 per m3.
The increase of ¥1,080.2 billion in net sales was mainly derived
from the following factors: regarding net sales of crude oil andnatural gas, an increase in sales volume contributing ¥113.6 billion
to the increase, an increase in unit sales price contributing ¥616.9
billion to the increase, the depreciation of the Japanese yen
against the U.S. dollar contributing ¥347.3 billion to the increase,and an increase in net sales excluding crude oil and natural gas of¥2.2 billion.

Net sales
Crude oil
Natural gas
Other
Cost of sales
Gross profit
Exploration expenses
Selling, general and administrative expenses
Depreciation and amortization
Operating income
Other income
Interest income
Dividend income
Equity in earnings of affiliates
Gain on reversal of allowance for recoverable
accounts under production sharing
Foreign exchange gain
Other
Other expenses
Interest expense
Foreign exchange loss
Modification loss on financial assets
Impairment loss
Other
Income before income taxes
Income taxes
Net income
Net income (loss) attributable to non-controlling interests
Net income attributable to owners of parent

2022/12¥2,324,660
1,778,662
525,145
20,851
943,414
1,381,245
29,20290,752
14,881
1,246,408
335,638
64,687
9,499
165,684

Management Foundation to Advance Growth Strategies

PERFORMANCE OVERVIEW(Millions of yen, %)2021/12¥1,244,369
905,199
320,575
18,594568,921675,448
6,445
64,92013,425590,657
112,246
31,115
7,456
38,834Growth Strategies for Value Creation

During the year ended December 31, 2022, the Japanese economy was on a path to recovery from the impact of the novel coronavirus (COVID-19), but from February, the economic outlook
became uncertain because of rising tensions due to the Ukraine
conflict. Since then, the economy has shown a moderate recovery
and is expected to further improve as society learns to coexist
with COVID-19. Even so, the global economic downturn poses arisk to Japan’s economy as global monetary tightening continues.
Furthermore, the impact of inflation and supply disruptions on
economic activities continues to be a concern.
Of the international crude oil price indices, which significantly
influence the financial performance of the Group, Brent crude (ona near-term closing price basis), considered a benchmark index
for crude oil, started the year ended December 31, 2022 at
US$78.98 per barrel. The crude oil price moved above US$120 in
the first half of the year due to the imposing of economic sanctions against Russia, mainly by the EU, after the Russian invasionof Ukraine in February, and moves by major Western countries toban imports of Russian energy products. However, the price declined in the second half of the year, reaching US$85.91 at theend of the year ended December 31, 2022, due to global decline
in demand for crude oil caused by concerns over the reemergence of a new type of coronavirus infection in China and economic recession mainly in the U.S. and Europe. The Group’s

Net assets increased by ¥675.9 billion, or 20.2%, to ¥4,022.3
billion from ¥3,346.4 billion as of December 31, 2021. Total shareholders’ equity increased by ¥227.6 billion, or 8.5%, to ¥2,908.2
billion from ¥2,680.6 billion as of December 31, 2021. Total accumulated other comprehensive income increased by ¥409.1 billion,or 92.3%, to ¥852.5 billion from ¥443.4 billion as of December 31,
2021. Non-controlling interests in net assets increased by ¥39.1
billion, or 17.6%, to ¥261.5 billion from ¥222.3 billion as of December 31, 2021.

INPEX CORPORATION Integrated Report 2022

87

INPEX’s Vision and Value Creation

INVESTMENT AND FUNDING
Investments in upstream oil and gas projects• Discrepancies exist between the standards stipulated in U.S.

FASB Accounting Standards Codification Topic 932, “Extractive
Industries—Oil and Gas (Topic 932),” and both the Group’s
definitions of exploration and development expenditures andthe standards used in preparing the following tables. The following is a partial list of the discrepancies between the Group’s
accounting policies and Topic 932.
– Group expenditures relating to the PSC-governed joint ventures where the Group is not the operator are disclosed on a
cash basis rather than an accrual basis as required by Topic 932.
– The tables below have been prepared based on the cost definitions used by operators in their reporting, which may not be
consistent with Topic 932.
– Topic 932 requires that administrative costs not directly related
to exploration and development activities be excluded from
exploration and development expenditures, whereas such administrative costs are not necessarily excluded from those expenditures under the Group’s accounting policies.

The table below shows the Group’s exploration and development costs and other expenditures (excluding capitalized interest costs and asset retirement costs corresponding to asset retirement obligations capitalized under fixed assets) by segment for the years ended December 31, 2021 and 2022.
Eurasia(Europe & NIS)

Middle East &AfricaAmericasTotal¥ 1,183
83,220¥   (587)
25,335¥ 5,024
46,840¥ 1,356
12,002¥   7,464
171,844

4,934

84,40324,74751,864

13,359179,309

—
—

—
1,255

47
1,394

—
2,900

—
—

47
5,549

—
5,978
¥10,912

1,255
12,273¥97,932

1,441—¥26,1882,900—¥54,764——¥13,3595,596
18,251¥203,158

INPEX CORPORATION and Consolidated Subsidiaries
Exploration¥   488
Development
4,446
Subtotal
Equity-method affiliates
Exploration
Development
Subtotal
Other capital expenditures*
Total

INPEX CORPORATION and Consolidated Subsidiaries
Japan
Asia & Oceania
Eurasia (Europe & NIS)
Middle East & Africa
Americas
Subtotal
Equity-method affiliates
Asia & Oceania
Eurasia (Europe & NIS)
Middle East & Africa
Subtotal
Total¥ 10,686

2022/1251,491
13,73346,647
3,039

8.5%
41.0
10.9
37.2
2.4

¥ 12,262
69,127
34,96347,554
5,646

7.2%
40.8
20.6
28.1
3.3

125,598

100.0

169,554

100.0

3,123
633
2,381

50.9
10.3
38.8

5,428
1,870
2,975

52.8
18.2
29.0

6,138
¥131,737

100.0—%

10,274¥179,828

100.0—%* Other capital expenditures include the construction costs of domestic gas infrastructure, the Group’s share of investment in the Ichthys downstream
entity (Ichthys LNG Pty Ltd, an equity-method affiliate) and others.

For upstream projects governed by the PSCs, the Group’s share of costs arising during the exploration, development and production
phases is capitalized under “Recoverable accounts under production sharing.” The following table shows the changes in the balance of“Recoverable accounts under production sharing” during the years ended December 31, 2021 and 2022.

Management Foundation to Advance Growth Strategies

Asia & Oceania

Japan(Millions of yen, %)2021/12Analysis of recoverable accounts under production sharing(Millions of yen)

Year ended December 31, 2021

The table below shows the Group’s operating expenses by segment for the years ended December 31, 2021 and 2022.

Growth Strategies for Value Creation

Continuous exploration for new reserves of crude oil and natural
gas is essential for stable earnings of the Group. The informationin this section on upstream oil and gas investments is based on
the data reported by project operators relating to exploration expenditures, development expenditures and operating expenses.
The Group’s expenditure categories are defined as follows:• Exploration expenditures include the costs of exploratory drilling and any geological or geophysical studies. The costs of local personnel and office operations and related administrative
expenses are also included in this category if a project (or contract area) is in the exploration phase.
• Development expenditures include the costs of development
drilling, any production facilities and acquisition of participating interests.
• Operating expenses include the costs of well operations, maintenance and the supervision of production activities. This category also includes the administrative expenses for the project(or contract area) if it contains a field in active production.

(Millions of yen)2021/122022/12

Balance at beginning of the period
Add: Exploration costs
Development costs
Operating expenses
Other
Less: Cost recovery-capital expenditures
Cost recovery-operating expenditures
Other¥575,544
1,014
27,94917,553
3,566(62,236)(15,222)—¥548,170
1,234
33,60822,3996,694(70,781)(19,182)(601)

Balance at end of the period
Allowance for recoverable accounts under production sharing at end of the period

548,170¥ (61,871)

521,541¥ (53,873)(Millions of yen)
Asia & Oceania

Middle East &AfricaAmericasTotal¥  2,193
93,432¥  6,178
73,715¥10,164
60,992¥   489
21,419¥ 30,454
258,158

20,027

95,626

79,893

71,157

21,908288,613

—
—

—
1,930

182
1,530

—
2,175

—
—

182
5,636

—
5,075
¥25,103

1,930
39,892¥137,449

1,713
44,043¥125,650

2,175—¥73,332——¥21,908

5,819
89,012¥383,444Japan

INPEX CORPORATION and Consolidated Subsidiaries
Exploration¥11,428
Development
8,599
Subtotal
Equity-method affiliates
Exploration
Development
Subtotal
Other capital expenditures*
Total* Other capital expenditures include the construction costs of domestic gas infrastructure, the Group’s share of investment in the Ichthys downstream
entity (Ichthys LNG Pty Ltd, an equity-method affiliate) and others.

The amount posted as “Cost recovery-operating expenditures” inrecoverable accounts under production sharing is greater thanthat posted as operating expenses. Along with operating expenses, this is because a portion of the exploration and development
costs, which are incurred and recoverable within the year, is included in the “Cost recovery-operating expenditures” account.
Exploration costs for the year ended December 31, 2022 increased by ¥0.2 billion to ¥1.2 billion from ¥1.0 billion for the year
ended December 31, 2021. This was mainly due to an increase in
exploration expenditures in the Middle East & Africa region.
Development costs for the year ended December 31, 2022 increased by ¥5.6 billion to ¥33.6 billion from ¥27.9 billion for theyear ended December 31, 2021. This was mainly due to an increase in development expenditures in the Asia & Oceania region
and the Eurasia region.
Operating expenses for the year ended December 31, 2022
increased by ¥4.8 billion to ¥22.3 billion from ¥17.5 billion for theyear ended December 31, 2021. This was mainly due to an increase in operating expenses in the Eurasia region.

Cost recovery for the year ended December 31, 2022 increased by ¥13.1 billion to ¥90.5 billion from ¥77.4 billion for theyear ended December 31, 2021. This was mainly due to an increase in cost recovery in the Asia & Oceania region and the Eurasia region.
Allowance for recoverable accounts under production sharing
as of December 31, 2022 decreased by ¥7.9 billion to ¥53.8 billion
from ¥61.8 billion as of December 31, 2021. This was mainly due
to the stable operation in a certain project.

Business and Financial Overview

Year ended December 31, 2022

Eurasia(Europe & NIS)

Total investments for the year ended December 31, 2022 increased by ¥180.2 billion, or 88.7%, to ¥383.4 billion (including ¥5.8 billion for exploration and development by equity-method affiliates) from ¥203.1 billion for the year ended December 31, 2021. This was mainly due toan increase in expenditures in the Eurasia region.

88

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89

INPEX’s Vision and Value Creation

INPEX Green Bond 1st Annual Report(Period: January 2022–December 2022)
30 June 2023 INPEX CORPORATION
Funding sources and liquidity

During the year ended December 31, 2022, the Company carried out funding aimed at development expenditures, etc., while
also working on reducing interest-bearing liabilities in line with
our medium-term business plan. Additionally, the Company received financing from Japan Organization for Metals and Energy
Security for development expenditures, exploration expenditures,
etc.
The Group’s basic liquidity policy is to maintain sufficient cash
flow on hand to provide for steep falls in oil and gas prices. In addition, the Group has concluded commitment line contracts withmultiple financial institutions to secure the line of credit.
As of December 31, 2022, total amount of short-term borrowings and long-term debt was ¥1,240.2 billion, and total amount ofcash and cash equivalents was ¥211.6 billion.

1. Annual report summary
INPEX has issued its inaugural INPEX Green Bond on 15 October 2021. It is designed to promote the reduction of CO2 based on the “Business Development Strategy—Towards a Net Zero Carbon Society by2050”, which formulated a long-term management policy envisioning a net zero carbon society by 2050.
9.95 billion JPY of the 10.00 billion JPY from the INPEX Green Bond proceeds have been allocated to
the following green projects that were verified against the Climate Bond Standard version 3.0 (CBSv3.0)
and other technical standards set by the Climate Bond Initiative (CBI) by 31 December 2022.
All projects are under construction or in operation as originally planned or scheduled as of 31 December
2022 and have achieved environmental benefits (CO2 reductions).

1) Green project enewable energy: Business related to the development, construction, operation and refurbishment
Rof renewable energy of wind, geothermal and solar

2) Verification criteria
CBSv3.0 and the following technical standards
The Marine Renewable Energy Sector Eligibility Criteria of the Climate Bonds Standard (July 2020)
Geothermal Energy and the Climate bond Standard (version1.0)
Green Bond Principles 2021 (GBP)
Green Bond Guidelines 2020, Ministry of the Environment (GBGLs)

Cash flows
Cash flows for the years ended December 31, 2021 and 2022 are summarized as follows:

2021/122022/12¥ 445,457(130,727)(315,215)¥ 191,213¥ 751,284(525,574)(241,928)¥ 211,656

2. Allocation status Table-1: INPEX Green Bond fund allocation (as of December 2022)
No.

1

Amount of funds allocated(Refinancing amount)

Project category

INPEX Green Bond eligible projects

9.95 billion JPY(5.23 billion JPY)Management Foundation to Advance Growth Strategies(Millions of yen)

Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of the period

Growth Strategies for Value Creation

Oil and natural gas exploration and development projects, as wellas the construction of natural gas infrastructure, require significant
funding. The Group relies on cash flow on hand derived from internal reserves, together with external sources, to procure funds.
The Group’s basic policy is to utilize cash flow on hand and external equity financing to fund exploration projects and to utilize
cash flow on hand, bank loans and issuance of bonds to fund development projects and the construction of natural gas infrastructure. Oil and natural gas development projects are primarily
funded from long-term loans that the Company has secured fromJapan Bank for International Cooperation, Japanese commercial
banks and others. Japan Organization for Metals and Energy Security has provided guarantees for the principal on certain
outstanding amounts of the Company’s long-term loans. Development Bank of Japan Inc, Japanese commercial banks and others have provided long-term loans for the construction ofdomestic gas infrastructure. The Ichthys downstream entity (Ichthys LNG Pty Ltd, an equity-method affiliate), as the borrower, hasutilized external loans from export credit agencies and commercial banks for project financing and others.

Amount of funds
unallocated0.05 billion JPY*Unallocated amount (0.05 billion JPY) of funds is managed as cash deposits in accordance with the proceeds management procedures.

Net cash provided by (used in) operating activities
Net cash provided by operating activities for the year ended December 31, 2022 increased by ¥305.8 billion to ¥751.2 billion from¥445.4 billion for the year ended December 31, 2021. This was
mainly due to an increase in income before income taxes as a result of an increase in sales prices, despite an increase in income
taxes paid.

3. Project eligibility assessment results
INPEX has confirmed the continued compliance of the INPEX Green Projects listed in Table-1 against
CBSv3.0 and the relevant technical standards (see section 1.2) by the INPEX Renewable Energy & New
Business Division, the INPEX Corporate Strategy & Planning Division and the INPEX Finance & Accounting
Division. The INPEX Green Projects that were eligible for fund allocation have been already qualified bya CBI approved verifier in a pre-issuance verification of the bonds.

4. Environmental benefit Table-2: INPEX Green Bond environmental improvement benefits

Business and Financial Overview

Net cash provided by (used in) investing activities
Net cash used in investing activities for the year ended December
31, 2022 increased by ¥394.8 billion to ¥525.5 billion from ¥130.7
billion for the year ended December 31, 2021. This was mainly
due to increases in long-term loans made and payments for purchases of investment securities.

Net cash provided by (used in) financing activities
Net cash used in financing activities for the year ended December
31, 2022 was ¥241.9 billion, decreased by ¥73.2 billion from ¥315.2
billion for the year ended December 31, 2021. This was mainly
due to an increase in proceeds from long-term debt, despite increases in repayments of long-term debt and purchase of treasury
stock.

(Period: January 2022–December 2022)
No.

1

Project category

INPEX Green Bond eligible projects

Facility capacity(for INPEX share)

Environmental improvement
effects CO2 Reductions

415 MW (68.7 MW)

53,398 t-CO *2

All projects are under construction or in operation as planned or scheduled as of 31 December 2022.
Calculation method for environmental benefit: Estimated calculation based on the actual power generation for the period January 2022–
December 2022 (Calculated considering the period covered)* : Estimated CO2 reductions based on actual power generation from geothermal power		CO2 Reduction = Actual power generation (MWh) x CO2 Emission factor (t-CO2 /MWh)		CO2 Emission factor is calculated from the difference between the average CO2 emission factor of the country where the project is operated and theCO2 emission factor of the project.

5. Post-issuance verification
INPEX Green Bond has been confirmed that it conforms with CBSv3.0 and other related criteria by DNVBusiness Assurance Japan Co., Ltd., a CBI approved verifier, in accordance with the requirements of
CBSv3.0. The result of the post-issuance verification by the CBI approved verifier is publicly available on our
website.

90

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91

Subsidiaries and Affiliates
INPEX’s Vision and Value Creation

As of December 31, 2022

Consolidated Subsidiaries
Company name

Voting rights
held by us (%)*2

Main businessCompany name

Issued capital(Millions of yen)*1

Voting rights
held by us (%)*2

Main business100.00%Natural gas transportation, pipeline operation, maintenance and management

Saitama Gas Co., Ltd.

60

62.67%(13.17%)

Supply and sale of city gas

INPEX DLNGPL PTY Ltd

42,001(Thousands of
U.S. dollars)

100.00%Investment in Darwin LNG Pty Ltd, which constructs
and operates the undersea pipeline and LNG plantconnecting the Bayu Undan Gas-Condensate Field andDarwin (Australia)

Exploration of oil and natural gas in the WA-285-P
Block and others, Australia

INPEX BTC Pipeline, Ltd.

63,800(Thousands of
U.S. dollars)

100.00%Investment in the pipeline construction and management business that connects Baku (Azerbaijan), Tbilisi(Georgia) and Ceyhan (Turkey)

100.00%

Supply of business capital, etc. to oil and natural gas
exploration, development, production and sales in the
WA-285-P Block and others, Australia

INPEX Renewable Energy Europe
Limited296,078(Thousands ofBritish Pounds)

100.00%Development and management of offshore wind power projects in Europe

9,683,023(Thousands of
U.S. dollars)

100.00%(100.00%)

Supply of business capital, etc. to oil and natural gas
exploration, development, production and sales andconstruction and operation of the LNG plant for the
Ichthys LNG project, Australia

4,800

100.00%Development and management of geothermal projects in Japan and overseas

10100.00%INPEX Ichthys Pty Ltd

804,456(Thousands of
U.S. dollars)

100.00%(100.00%)

Exploration, development, production and sales of oil
and natural gas in the Ichthys Gas-Condensate Field(WA-50-L/ WA-51-L), Australia

Supply of business capital, etc. to geothermal power
project in Sarulla Geothermal Field, Indonesia

100.00%

The Group’s intercompany finance operations andsupport for financial administration of projects

INPEX Oil & Gas Australia Pty Ltd

1,011,000(Thousands of
U.S. dollars)

100.00%Exploration and development, production and sales ofoil and natural gas in the Prelude Gas Field (WA-44-L)
and others, Australia

2,826,000(Thousands of
U.S. dollars)

INPEX Sahul, Ltd.

4,600

100.00%Exploration, development, production and sales of oil
and natural gas in the PSC TL-SO-T 19-12 Block in East
Timor

Equity-method affiliates

100.00%Issued capital(Millions of yen)*1

Voting rights
held by us (%)*2

Main business

8,014

Exploration, development, production and sales of oil
and natural gas in the WA-35-L Block and others,
Australia

Company name

INPEX Alpha, Ltd.

51.93%

Exploration and development of oil and natural gas in
the Masela Block in the Arafura Sea, Indonesia

INPEX South Makassar, Ltd.

1,097

100.00%Exploration, development, production and sales of oil
and natural gas in the Sebuku Block in the Makassar
Strait, Indonesia

10100.00%Exploration, development, production and sales of oil
and natural gas in Blocks 05-1b/ 05-1c in offshore
southern Vietnam

453,150(Thousands of
U.S. dollars)

100.00%(100.00%)

428,940

INPEX Browse E&P Pty Ltd

INPEX Browse, Ltd.

INPEX Holdings Australia Pty Ltd

INPEX GEOTHERMAL, LTD.
INPEX Geothermal Sarulla, Ltd.
INPEX FINANCIAL SERVICESSINGAPORE PTE. LTD.
38 other subsidiaries

338,601(Thousands of
U.S. dollars)

44.00%

Exploration, development, production and sales ofnatural gas in the Berau Block and the Tangguh LNG
Project, West Papua province, Indonesia

Ichthys LNG Pty Ltd

4,506,860(Thousands of
U.S. dollars)

66.25%(66.25%)Laying and maintenance of undersea pipeline fromthe Ichthys Gas-Condensate Field to the Darwin
Onshore LNG Plant in Australia, construction andoperation of the LNG plant and sales of LNG, LPG
and condensate.

7

25.00%

Supply of business capital for exploration, development, production and sales of oil in Zapadno-Yaraktinsky and Bolshetirsky blocks, Russia

53,59451.00%

Exploration, development, production and sales of oilin the ACG Oil Fields, Azerbaijan

INPEX North Caspian Sea, Ltd.

113,897

51.00%

Exploration, development, production and sales of oilin the Offshore North Caspian Sea Block, Kazakhstan

50.51%

Supply of business capital, etc. to oil exploration, development, production and sales in the Snorre Oil
Field and others, the Kingdom of Norway

100.00%(100.00%)

Exploration, development, production and sales of oilin the Snorre Oil Field and others, the Kingdom of
NorwayJapan South Sakha Oil Co., Ltd.

PT Medco Geopower Sarulla

100.00%Exploration, development, production and sales of oilin the Upper Zakum, Satah and Umm Al Dalkh oil
fields, Offshore Abu Dhabi, United Arab Emirates

143,003(Thousands of
U.S. dollars)

49.00%(49.00%)

Supply of business capital, etc. to geothermal power
project in Sarulla Geothermal Field, Indonesia

PT. Supreme Energy Sumatera

100(Hundred millions of
Rupiahs)

33.33%(33.33%)

Supply of business capital, etc. to geothermal power
project in Muara Laboh Geothermal Block, Indonesia

107,956(Thousands of
U.S. dollars)

27.40%(27.40%)Development and management of geothermal power project in the Rantau Dedap Geothermal Block,Indonesia

INPEX Idemitsu Norge AS

Japan Oil Development Co., Ltd.

100
727,900(Thousands ofNorwegian kroner)
5,532

JODCO Exploration Limited

61,224(Thousands of
U.S. dollars)

JODCO Onshore Limited

111(Thousands of
U.S. dollars)

51.00%

Exploration of oil in onshore Block 4 in Abu Dhabi,
United Arab Emirates

65.76%

Exploration, development, production and sales of oil
in ADCO Block in onshore Abu Dhabi, United ArabEmirates

JODCO Lower Zakum Limited

600,000(Thousands of
U.S. dollars)

100.00%Exploration, development, production and sales of oilin the Lower Zakum Oil Field Offshore Abu Dhabi,
United Arab Emirates

INPEX Americas, Inc.

19,793(Thousands of
U.S. dollars)

100.00%

Supply of business capital, etc. to oil and natural gas
exploration, development, production and sales in the
U.S. and others

1,043,488(Thousands ofCanadian dollars)

45.09%

Exploration, development, production and sales ofnatural gas in the shale gas blocks of the Horn River,
Cordova and Liard basins in British Columbia, Canada

INPEX Gas British Columbia Ltd.

INPEX CORPORATION Integrated Report 2022

PT Supreme Energy Rantau Dedap

Business and Financial Overview

MI Berau B.V.

INPEX Southwest Caspian Sea, Ltd.

INPEX Norway Co., Ltd.

Management Foundation to Advance Growth Strategies

100

67,036Growth Strategies for Value Creation

INPEX Pipeline Co., Ltd.

INPEX Masela, Ltd.

INPEX Con Son Co., Ltd.

92

Issued capital(Millions of yen)*1

16 other equity-method affiliates*1 Values in the column labeled “Issued capital (Millions of yen)” are rounded to the nearest unit.
*2 Values in parentheses in the column labeled “Voting rights held by us (%)” indicate the ratio of indirectly held voting rights. These values
are included in the total.

INPEX CORPORATION Integrated Report 2022

93

Business Risks

I. MAJOR BUSINESS RISKS(1) Risk of disasters, accidents, system failures, etc.

INPEX CORPORATION Integrated Report 2022(2) Risk of failure in exploration, development or
production

Payment of compensation is ordinarily necessary to acquire participating interests. Also, surveying and exploratory drilling expenses(exploration expenses) become necessary at the time of exploration activities for the purpose of discovering resources. When resources are discovered, it is necessary to further invest in
substantial development expenses according to various conditions,
including the size of the recoverable reserves, development costs
and details of agreements with oil-producing countries (including
gas-producing countries; hereinafter the same shall apply).
There is, however, no guarantee of discovering resources ona scale that makes development and production feasible. The
probability of such discoveries is considerably low despite various
technological advances in recent years, and even when resources
are discovered the scale of the reserves does not necessarily
make commercial production feasible. For this reason, the Group
conservatively recognizes expenses related to exploration investment in our consolidated financial statements. The Group maintains financial soundness by booking 100% as expenses in thecase of concession agreements (including mining rights awardedin Japan as well as permits, licenses and leases awarded overseas)
and by booking 100% of exploration project investment as allowances in the case of production sharing agreements. In addition,
if there are impossibilities of recovery of investment in a development project, we also book the corresponding amount of investment in the development project as allowances while considering
the recovery possibility of each project.
To increase recoverable reserve and production volumes, theGroup plans to always take an interest in promising properties
and plans to continue exploration investment. At the same time,
we plan to invest in development projects, including the acquisition of interests in discovered undeveloped fields and producing
fields, so as to maintain an overall balance between assets at the
exploration, development, and production stages.
Although exploration and development (including the acquisition of interests) are necessary to secure the reserves essential to
the Group’s future sustainable business development, each typeof investment involves technological and economic risks, andfailed exploration or development could have an adverse effecton the results of the Group’s operations.

(3) Dependence on specific geographical areas
or assets for production volume

The Group engages in stable production of crude oil and natural
gas in the Ichthys gas-condensate field (Australia), the onshore
and offshore Abu Dhabi oil fields (United Arab Emirates), the Minami Nagaoka Gas Field (Japan) and so on. The areas in which theGroup operates are spread broadly throughout Asia-Oceania(particularly Japan, Indonesia and Australia), the Middle East andAfrica, Eurasia including the Caspian Sea area and the Americas.
For fiscal 2022, however, the Asia and Oceania region accounted
for about 40% of the Group’s production volume and the Middle
East and Africa region accounted for about 43%, with these tworegions making up the vast majority of the Group’s operations.

(5) Crude oil, condensate, LPG and natural gas
reserves
1) Proved reserves

INPEX CORPORATION (the “Company”) commissioned DeGolyer and MacNaughton, an independent petroleum engineering
consultant in the United States, to assess the main proved reserves of the Group of which projects with a significant amount of
future development investment might materially affect future performance. An assessment of other projects was undertaken by theCompany. The definition of proved reserves is based on the U.S.
Securities and Exchange Commission’s (SEC) Regulation S-X, Rule

2) Possibility of changes in reserves

A reserve evaluation depends on the available geological and engineering data from oil and gas reservoirs, the maturity of development plans and a considerable number of assumptions, factors
and variables including economic conditions as of the date suchan estimate is made. Reserves may be revised in the future on thebasis of geological and engineering data as well as development
plans and information relating to changes in economic and otherconditions made newly available through progress in production
and operations. As a result, there is a possibility that reserves will
be restated upwards or downwards. As to the reserves undera PSC, not only production, but also oil and gas prices, investments, recovery of investments due to contractual conditions andremuneration fees may affect the economic entitlement. This may
cause reserves to increase or decrease. In this way, the assessedvalue of reserves could fluctuate because of various data, assumptions and changes of definition.

(6) Operatorship

In the oil and natural gas development business, companies frequently form business partnerships for the purpose of the dispersion of risk and financial burden. In such partnerships, one of thecompanies becomes the operator, which performs the actual
work and bears the responsibility for operations on behalf of thepartners. The companies other than the operator, as non-operators, participate in the business by providing a predeterminedamount of funds and either carefully examining the explorationand development plan devised and implemented by the operator, or participating in some operations.
The Group intends to actively pursue operator projects, focusing on the large-scale Ichthys LNG and other projects taking into
consideration the effective application of business resources aswell as the balance between operator and non-operator projects,
based on the Group’s knowhow and technical capability, which
has been acquired through considerable operational experienceat each of the exploration, development and production stages.
The Company has significant expertise as an operator in the development and production of crude oil and natural gas both inJapan and overseas as well as a wealth of know-how and knowledge accumulated over many years as a participant in LNG andother projects in such countries as Indonesia and Australia. In addition, we believe that by utilizing the services of specialized subcontractors and highly experienced external consultants,
a practice similar to foreign oil companies including the majors,
it will be possible to execute business appropriately as an operator including LNG projects.
Engaging in project coordination as an operator contributes
to the expansion of opportunities in acreage acquisition throughenhancement of technical capabilities and greater presence inoil-producing countries and the industry. At the same time, there
are risks such as constraints on the recruitment of personnel withspecialized operational skills and an increase in financial

INPEX CORPORATION Integrated Report 2022

Business and Financial Overview

94

issues could result in administrative sanctions or damage theGroup’s credibility and reputation as an oil and natural gas development company, and could therefore have an adverse effect on
future business activities.

Expiration dates are often stipulated in the agreements related toparticipating interests, which form the basis of the Group’s overseas business activities. Should an agreement in which an expiration date is stipulated not be extended, re-extended or renewed,
or should the terms and conditions be less favorable (including
a reduction in the proportion of the Group’s interest) than thoseexisting at the time of extension, re-extension or renewal, there
could be an adverse effect on the Group’s results. INPEX Group
policy to work with our business partners toward the extension,
re-extension or renewal of these agreements, should an existing
agreement not be extended, re-extended or renewed as a resultof agreement negotiations with the national petroleum companyof an oil-producing country, or in the event of agreement terms
and conditions (including a reduction in the Group’s participatinginterest) that are more disadvantageous than the situation at thetime of the extension, re-extension or renewal, this could have an
adverse effect on the Group’s business or results. Even should theagreements stipulating expiration dates be extended, re-extended or renewed, we anticipate that the remaining recoverable reserves at that time will have decreased due to production
developments. Although the Group is striving to acquire intereststhat can substitute these properties, failure to acquire participating interests in oil and gas fields to fully substitute for these properties could have an adverse effect on the Group’s results.
In addition, the period for exploration in oil and gas fields currently under exploration is fixed by contracts, and in the case of
fields where oil and/or gas reserves are found that are deemed tobe commercialized, and the Company is unable to decide on thetransition to the development stage by the expiration of the current contract, efforts will be made through negotiations with thegovernment of the oil- or gas-producing country in question tohave the periods extended. However, there remains the possibility that such negotiations may not be successfully concluded, inwhich event the Company would be forced to withdraw from operations in the oil or gas field concerned. Also, as a rule, when
there has been a major breach of contract on the part of one party, it is customary for the other party to have the right to cancel
the agreement before the expiration date. The agreements forproperties in these principal geographical business areas containsimilar provisions. The Group has never experienced early cancellation of an agreement due to breach of contract, and we do not
anticipate such an occurrence in the future. Nevertheless, a major
breach of contract on the part of a party to an agreement could
result in cancellation of an agreement before the expiration date.
And in natural gas development and production activities, inmany cases we are selling and supplying gas based on long-termsales and supply contracts in which expiration dates are stipulated. We plan to make efforts with partners to extend or re-extend
the expiration date before the deadline stipulated in these contracts. Nevertheless, inability to extend the contracts, or the occurrence of cases in which extension is made but sales and supply
volumes are reduced, could have an adverse effect on theGroup’s business or results. Furthermore, the Company may needto purchase or procure additional natural gas from a third party
due to events such as changes in the sales terms during the salesor supply contract period, full or partial suspension or delay of
project operations or unexpected changes in demand. This could
have an effect on the Group’s business or results.

Management Foundation to Advance Growth Strategies

Oil and natural gas development entails the risk that operational
accidents and disasters may occur in the process of exploration,
development, production and transportation. Various information
systems are used in operations. While safety measures are inplace for these systems, there is the risk that operations may besuspended due to unforeseen failures of these systems caused byevents such as natural disasters and cyberattacks. Should such an
unforeseen failure of information systems, or an accident, disasteror other such incident occur, there is the risk that costs may be incurred, excluding compensation covered by insurance, due to infrastructural damage, as well as the risk of a major accident ordisaster involving loss of life. In addition, a cost for recovery or
opportunity loss from the interruption of operations could occur.
Furthermore, labor disputes in projects that the Group is involved in or the spread of infectious diseases such as COVID-19
may lead to a shortage of employees required for operations andother necessities, difficulty in procuring materials, equipment andservices as well as transportation of produced goods, instructions
or orders from the governments of oil-producing countries to suspend operations, changes in the policies of partners in a joint
business and other developments. Such events may fully or partly
suspend or delay operations.
For its domestic natural gas business, the Company has continued to procure natural gas regasified from imported LNG as sourcegas since January 2010. Furthermore, the Company has manufactured regasified LNG from imported LNG at Naoetsu LNG Terminalfrom August 2013. An inability to procure natural gas regasified fromimported LNG and other imported gas as source gas due to issues
concerning suppliers or the Company’s Naoetsu LNG Terminal, an
inability to produce domestic gas due to issues in the domestic gas
field, or compromised pipeline operations due to accidents or disasters along the pipeline network may interfere with the Company’s
ability to supply its customers. This could in turn have an adverse effect on the Company’s domestic natural gas business.
With regard to environmental problems, there is a possibilityof soil contamination, air pollution, and freshwater and seawaterpollution. The Group has established a “Health, Safety and Environment Policy,” and as a matter of course abides by the environmental laws, regulations, and standards of the countries in which
we operate and give due consideration to the environment in the
conduct of business, based on our independent guidelines. In theevent of an operating accident or disaster which impacts the environment, there is the possibility of incurring a response or costburden for recovery from that incident, of incurring obligation of
payment for procedural costs, compensation or other cost related
to the start of civil, criminal or government procedures, or of incurring loss from the interruption of operations. Furthermore, inthe event of changes to or the strengthening of the environmental laws, regulations, and standards (including support measures
for the promotion of new, renewable energies) of the countries inwhich we operate, it may be necessary for the Group to devise
additional measures with an associated cost burden and it could
affect on the financial results of the Group.
The Company strives to prevent accidents and incidents fromhappening to avoid these risks of disasters, accidents, system failures and other developments from materializing. However, risks
are always present, and if they materialize, they may have a significantly adverse effect on the Group’s results.
Although the Group maintains insurance against loss or damage in the natural course of its operations to a reasonable extent,
insurance may not cover all damages. Also, such accidents or(4) Contract expiration dates

4-10(a), which is widely known among U.S. investors. Regardlessof whether the deterministic approach or probabilistic approachis used in evaluation, proved oil and gas reserves are estimatedquantities that geological and engineering data demonstrate withreasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions, from the date ofevaluation through to the expiration date of the agreement granting operating rights (or in the event of evidence with a reasonablecertainty of agreement, extension through to the expiration of the
projected extension period). For definition as “proved reserves,”
operators must have a reasonable degree of certainty that the recovery of hydrocarbons has commenced or that the project willcommence within an acceptable period of time. This definition is
widely regarded as being conservative. Nevertheless, the strictness of the definition does not imply any guarantee of the production of total reserves during a future production period. In thiscontext, when probabilistic methods are employed, there should
be at least a 90% probability that the quantities actually recovered
will equal or exceed the sum of estimated proved reserves.
For further details on proved reserves of crude oil, condensate, LPG and natural gas held by the Group, including equity-method, affiliates accounted please see the section “Oil and
Gas Reserves and Production Volume” on P.101.

Growth Strategies for Value Creation

1. CHARACTERISTICS OF AND RISKS ASSOCIATED WITH THE OIL AND NATURAL GASDEVELOPMENT BUSINESSThe Group currently relies heavily on specific geographical areas and assets for its production volume, and the occurrence of
operational issues at these assets could have an adverse effect on
the Group’s operational results.

INPEX’s Vision and Value Creation

The following is a list of key items that can be considered potential risk factors relating to the business of INPEX CORPORATION, its subsidiaries and affiliates (the “Group”). From the standpoint of information disclosure to investors and shareholders, we proactively disclose mattersthat are not necessarily the business risks but that can be considered to have important effects on the investment decisions of investors. The
following discussion does not completely cover all business risks relating to the Group’s businesses.
Unless stated otherwise, forward-looking statements in the discussion are the judgment of the Group as of March 29, 2023 and are subject to change after such date due to various factors, including changes in social and economic circumstances.

95

(7) Project partners(8) In the oil and natural gas development
business the period from exploration to sales
is highly capital intensive and funds cannot
be recovered for a long time

The Group books in its accounts, as an asset retirement obligation,
the estimated present value of costs related to mine abandonmentthat will become necessary after finishing operation and production in oil and gas production facilities and the like in accordancewith agreements with the authorities of oil-producing countries,
applicable laws and regulations and the like. If it is later found thatthe estimated present value of those costs falls short due to achange in the procedures used for mine abandonment, a rise in
expenses for procuring drilling materials and equipment or any
other reason, the Group will be required to increase the amount ofthat asset retirement obligation, which could adversely affect the financial condition and results of operations of the Group.

2. EFFECTS OF FLUCTUATIONS IN CRUDE OIL PRICES, NATURAL GAS PRICES, FOREIGNEXCHANGE AND INTEREST RATES ON FINANCIAL RESULTS(1) Effects of fluctuations in crude oil prices andnatural gas prices on financial results

96

INPEX CORPORATION Integrated Report 2022(2) The effect of fluctuations in exchange rates
on financial results

As most of the Group’s business consists of E&P conducted overseas, associated revenues (sales) and expenditures (costs) are denominated in foreign currencies (primarily in U.S. dollars), andprofit and loss is subject to the effects of the foreign exchange
market. In the event of appreciation in the value of the yen,
yen-denominated sales and profits decrease. Conversely, in theevent of depreciation in the value of the yen, yen-denominatedsales and profits increase.
On the other hand, when borrowing necessary funds, theCompany borrows in foreign currencies. In the event of appreciation in the value of the yen, a foreign exchange gain on foreign-currency denominated borrowings is recorded as a result offiscal year-end conversion; in the event of depreciation in the value of the yen, a foreign exchange loss is incurred. For this reason,
the exchange risk associated with the above business is diminished and the impact of fluctuations in exchange rates on profit
and loss tends to be mitigated. A ¥1 appreciation/depreciation
against the U.S. dollar is expected to have a ¥3.2 billion impact
on the Group for the year ending December 31, 2023. Moreover,although the Company is taking measures to reduce a portion of
the risks associated with movements in foreign currency exchange
rates, these measures by no means cover all possible risks. As
a result, the impact of fluctuations in foreign currency exchange
rates cannot be completely eliminated.

3. CLIMATE CHANGE RISKIn order to achieve the goals of the Paris Agreement and amid
growing interest in addressing climate change on a global scale,efforts are being made worldwide to reduce greenhouse gas(GHG) emissions, which are recognized as the cause of climatechange and global warming. The Group identifies, assesses andmanages climate change risks in line with the recommendationsof the Task Force on Climate-related Financial Disclosures (TCFD),
and specifically recognizes the following risks. The potential forthese climate change risks materializing is expected to grow overthe medium to long term, and if they do, they could have an adverse effect on the Group’s performance.

(1) Policy/regulatory risk

In the event that the countries and regions where the Group operates strengthen climate change actions based on the Paris
Agreement or other accords, making changes or enhancements
to environmental laws, regulations or standards, including carbon
pricing systems such as emissions trading and carbon taxes, theGroup would be required to implement additional measures and,in turn, incur financial commitments that could have an adverse
effect on the Group’s performance.

(2) Technical and market risk

If demand for the Group’s oil and natural gas products declines asa result of accelerated progress in low-carbon related technologies and increased price competitiveness of low-carbon products,
or due to a preference for low-carbon energy, this may have an
adverse effect on the Group’s business and performance.

(3) Financing risk

If investors and financial institutions place more importance thanin the past on direct and indirect GHG emissions from the Group’sbusiness as an evaluation item for climate change risk in investment and financing, the Group’s financing and its related terms
and conditions may be adversely affected.

(4) Physical risk

Acute risks due to extreme meteorological phenomena such as
tropical cyclones and floods, and chronic risks such as rises in average temperature and sea levels over the long term may adversely affect the operations of the Group’s facilities.

4. OVERSEAS BUSINESS ACTIVITIES AND COUNTRY RISKThe Group engages in a large number of oil and natural gas development projects overseas. Because the Group’s business activities,
including the acquisition of participating interests, are conductedon the basis of contracts with the governments of oil-producing
countries and other entities, steps taken by oil-producing countries
to further tighten controls applicable to home country natural resources, suspension of operation due to conflicts and other factors
and other such changes in the political, economic and social circumstances in such oil-producing countries or neighboring countries (including international disputes, government involvement,
stage of economic development, economic growth rate, capital reinvestment, resource allocation, restriction of economic activities
by global community, government control of foreign exchange or
foreign remittances and the balance of international payments), theapplication of production ceilings in OPEC+ member countries
and changes in the legal system and taxation system of thosecountries (including the establishment or abolition of laws or regulations and changes in their interpretation or enforcement) as wellas lawsuits could have a significant impact on the Group’s businessor results unless the impact is compensated by insurance.
Additionally, against the background of rising development
costs and other changes in the business environment, the progress of oil and gas projects and the need to address environmental issues, the governments of oil-producing countries may seek
to renegotiate the fiscal conditions including conditions of existing oil contracts related to participating interests. In the eventthat fiscal conditions of contracts are altered, this could have an
adverse effect on the Group’s business performance.

In order to respond to the risks listed in items 1 through 4
above, we have introduced guidelines for economic and risk evaluation we conduct on a per-project basis and are recognizing major risks.
When acquiring new projects in the upstream oil and natural
gas business, the New Ventures & Global Exploration Divisioncentrally analyzes and examines whether to take on new projects,
and takes action against these risks in cooperation with related
departments. For existing projects, the INPEX Value Assurance
System (IVAS) Committee works as a cross-organizational mechanism mainly for technical evaluation at each project phase, suchas exploration, evaluation and development. At the same time,
we conduct economic and risk evaluation in principle at least
once a year. For major projects, we report a summary of risk evaluation results to the Board of Directors each year. Regarding therenewable energy business and the hydrogen/CCUS business,
the Renewable Energy & New Business Division and the Hydrogen & CCUS Development Division coordinate their respective
businesses overall, conduct economic evaluation, and evaluate
risks and take action against them. When acquiring new projects,
the INPEX Value Assurance System (IVAS) Committee and external experts conduct verifications, and a summary of risk evaluation results is reported at Board of Directors Meetings forimportant projects.
We strive to actively manage risks related to our business ingeneral through measures including formulating and maintaining
an emergency/crisis response plan and conducting regular emergency response drills at ordinary times, to enhance our ability torespond to emergency situations caused by events such as major
accidents and disasters. In addition, we have formulated a Business Continuity Plan (BCP) and review it as appropriate to prevent
important operations from being interrupted. We have been implementing our BCP and taking necessary measures including
working from home since 2020 due to the spread of COVID-19. At
the same time, we have set up the Corporate Crisis Management
Team to assess the state of the entire company including overseas offices.
Furthermore, the Information Security Committee meets bothon a regular basis and as needed, taking action on information
security on an organizational and systematic basis, as well as conducting education and training including prevention of information leakage.
To manage health, safety and environment (HSE) risk, we strive
to continuously improve health and safety, process safety and environmental conservation in our business activities by identifying,
analyzing and evaluating HSE risks for each business site basedon the HSE Risk Management Procedure established under the
HSE Management System. While establishing and implementing
measures to address risks, we monitor HSE risks by ensuring that
headquarters regularly receives and reviews risk management status reports. We are also working on the company-wide management of security-related risks based on the relevant guidelines
and standards. For non-operator projects as well, we are increasing our involvement in their HSE management according to therisks of each project.

INPEX CORPORATION Integrated Report 2022

Business and Financial Overview

Crude oil prices and natural gas prices at our overseas businesses
are largely determined by international market conditions. In addition, these prices fluctuate significantly due to the influence ofa variety of factors including global and regional supply and demand (including a growing downward pressure on demand due tothe shift towards a net zero carbon society), trends and conditionsin the global economy (including the impact of the contraction of
economic activity due to the global pandemic) and financial markets as well as trends in the policies of oil-producing countries andagreements between oil-producing countries on production volume and other matters. The vast majority of these factors are beyond the control of the Company. In this regard, INPEX is not in aposition to accurately predict movements in future crude oil andnatural gas prices. The Group’s sales and profits are subject to theeffects of such price fluctuations. A fluctuation of US$1 in the priceof crude oil is expected to have a ¥6 billion impact on the Groupfor the year ending December 31, 2023, as estimated at the beginning of the fiscal period. Such effects are highly complex and arecaused by the following factors.
1) Although a majority of natural gas selling prices in overseas
businesses are linked to crude oil prices, they are not in direct
proportion to crude oil prices.
2) Because sales and profits are determined on the basis of crude
oil prices and natural gas prices at the time sales are booked,
actual crude oil transaction prices and the average oil priceduring the accounting period do not necessarily correspond.
Moreover, although the Company is taking measures to reducea portion of the risks associated with crude oil price fluctuations,these measures by no means cover all possible risks. As a result,the impact of fluctuations in crude oil prices cannot be completely eliminated.
Since the natural gas business in Japan uses domestically produced natural gas and imported LNG as feedstock, changes in themarket price for LNG have an effect on feedstock prices and sales
prices. There is also the possibility that changes in the competitiveenvironment associated with electric power and gas system reforms
will have an effect on natural gas sales prices and sales volumes.

Also, should the recovery of an amount invested in a business asset held by the Group be no longer expected—due to a decrease inprofitability associated with changes in the business environment on
the basis of changes in future market conditions— since the Groupwould reduce that business asset’s book value to reflect the level ofrecoverability and the amount of that reduction would be deemed
impairment loss, there is the possibility that there could be an adverse effect on the Group’s results of operations.

The Group raises some of its business capital through borrowing.
Much of these borrowings are variable-rate long term borrowings
in U.S. dollars. Accordingly, the Company’s profits are subject tothe influence of fluctuations in U.S. dollar interest rates. Furthermore, although the Group has devised methods to reduce a portion of interest rate risk, these methods do not cover all risks ofinterest rate fluctuation incurred by our Group and do not entirely
remove the effect of fluctuations in interest rates.

Management Foundation to Advance Growth Strategies

Considerable time and expense is required for exploration activities. Even when promising resources are discovered through exploration, substantial expenses including production facility
construction costs, and an extended period of time, are necessary
at the development stage leading up to production. For this reason,
a long period of 10 years or more is required from the time of exploration and development investment until the recovery of funds(9) Risk in relation to mine abandonment(3) The effect of fluctuations in interest rates on
financial results

Growth Strategies for Value Creation

In the oil and natural gas development business, as previously
mentioned, several companies often engage in joint business forthe purpose of dispersion of risk and financial burden. In suchcases, the partners generally enter into a joint operating agreement among themselves to decide on the decision-making procedure for execution of the joint business, or to decide on an
operator that conducts business on their behalf. A company thatis a partner in one property in which the Group is engaged injoint business may become a competitor in the acquisition of other participating interests, even though the relationship with thepartner may be good.
In undertaking the joint business, participants in principle beara financial responsibility in proportion to their interest share. Any
inability of a joint business partner to fulfill this financial responsibility may adversely affect the project.

through production and sales. In particular, the large-scale LNG
projects require a very large amount of investment, and the financing of these projects could be impacted by changes in the economic and financial environment. Following the discovery of resources,a delay in the development schedule or the loss of the economic viability of the properties during the development process leading up
to production and the commencement of sales could have an adverse effect on the Group’s operational results. Such delays or losses
may occur due to changes in the business environment including adelay in the acquisition or modification of government approvals,
the occurrence of unanticipated problems related to geologicalconditions, fluctuations in the price of oil or gas, fluctuations in foreign exchange rates, or escalating prices of equipment and materials. In the case of LNG projects, such delays or losses may occur
due to an inability to complete such procedural requirements as FID
owing to the lack of any long-term contractual agreement with prospective purchasers with respect to production.

INPEX’s Vision and Value Creationcommitments. Inability to adequately cope with such risks could
have an adverse effect on the Group’s operational results.

97

We manage country risk by, among others, establishing guidelines for handling country risks in the countries where we operate,
including setting a maximum target amount of accumulated investments in high-risk countries.
Furthermore, we have developed a mechanism to counter legal risk by establishing the Legal Unit as an independent organization that can provide appropriate legal guidance to businessdivisions and management regarding matters such as important
agreements and lawsuits. Legal support services have also been
expanded for operations in Japan and abroad.

II. OTHER BUSINESS RISKS
1. PRODUCTION SHARING CONTRACTS(1) Details of production sharing contracts(2) Accounting treatment of production sharing
contracts

When a company in the Group owns participating interests under
production sharing contracts, as mentioned above, in the role ofcontractor it invests technology and funds in the exploration anddevelopment of the property, recovers the invested costs fromthe production produced, and receives a share of the remaining
production after recovery of invested costs as compensation.
Costs invested on the basis of production sharing contracts
are recorded on the balance sheet as assets for which future recovery is anticipated under the item “Recoverable accounts under production sharing.” After the start of production, recovered
costs on the basis of those agreements are deducted from thisbalance sheet item.
As production received under production sharing contracts isdivided into the cost recovery portion and the compensation portion, the method of calculating cost of sales is also distinctive.
That is to say, the full amount of production received is temporarily charged to cost of sales as the cost of received production,and subsequently the amount of the compensation portion is calculated and this amount is booked as an adjustment item to costof sales (“Free of charge production allocated”). Consequently,
only the cost recovery portion of production after deduction of
the compensation portion is booked as cost of sales.

(1) The Company’s relationship with
the Japanese government

Although the government of Japan (the Minister of Economy,
Trade and Industry) holds 21.19 of the Company’s common sharesissued (excluding treasury shares) and a Class A Stock as of March
29, 2023, the Company autonomously exercises business judgment as a private corporation. There is no relationship of control,
such as through the dispatch of officers or other means between
the Company and the Japanese government. Moreover, we believe that no such relationship will develop in the future. Furthermore, there is no concurrent posting or secondment to theCompany of officers or employees from the Japanese
government.

(2) Ownership and sale of the Company’s sharesby the Japanese government (the Minister of
Economy, Trade and Industry)

The Ministry of Economy, Trade and Industry (METI) holds 21.19%of the Company’s common shares issued (excluding treasury
shares). METI succeeded to the shares that had been held by Japan National Oil Corporation (JNOC) following the dissolution of
JNOC on April 1, 2005. With regard to the liquidation and disposition of the oil and gas upstream assets owned by JNOC, the98

INPEX CORPORATION Integrated Report 2022

Policy Regarding the Disposal of Oil and Gas Development-Related Assets Held by Japan National Oil Corporation (hereinafter,
the “Report”) was announced on March 18, 2003 by the Japan
National Oil Corporation Asset Evaluation and Liquidation Deliberation Subcommittee of the Advisory Committee on Energy andNatural Resources, an advisory body of the Ministry of Economy,
Trade and Industry. The Report describes the importance of appropriate timing in selling the shares on the market, taking into
consideration enterprise value growth. In addition, METI may, in
accordance with the Supplementary Provision Article 13 (1) 2 of
the “Special Measures Act for Reconstruction Finance Keeping
After the Great East Japan Earthquake” (“the Reconstruction Finance Keeping Act“ (provisional translation, the same shall apply
hereinafter)) enacted December 2, 2011, sell off the Company’s
shares in Japan or overseas after examining the possibility of disposal of the said shares based on a review of the holdings fromthe perspective of energy policy. This could have an impact on
the market price of the Company’s shares.
METI also holds one share of the Company’s Class A Stock. As
the holder of a Class A Stock, METI possesses veto rights overcertain resolutions of the Company’s general shareholders’ meetings and meetings of the Board of Directors. For details on theClass A Stock, please refer to “4. CLASS A STOCK” on P.99.

In the aforementioned Report, INPEX CORPORATION (prior to theintegration with Teikoku Oil; reorganized on October 1, 2008) was
identified as a company that should comprise part of a core company, and is expected to play a role in efficient realization of a stablesupply of energy for Japan through the involvement by a nationalflagship company. In response to the Report, the Company (also,
the Group since our acquirement of Teikoku Oil on October 1, 2008)
has sought to promote efficient realization of a stable supply of energy for Japan while taking advantage of synergy with the efforts ofactive resource diplomacy on the part of the Japanese government,
and has aimed to maximize shareholder value by engaging in highly
transparent and efficient business operations.
As a result, with regard to the integration by means of transferof shares held by JNOC proposed in the Report, INPEX CORPORATION and JNOC concluded the Basic Agreement Concerning
the Integration of Assets Held by JNOC into INPEX CORPORATION of February 5, 2004 (hereinafter the “Basic Agreement”)
and a memorandum of understanding related to Basic Agreement (hereinafter “MOU”). On March 29, 2004, INPEX CORPORATION and JNOC entered into related contracts including the
Basic Contract Concerning the Integration of Assets Held by
JNOC into INPEX CORPORATION (hereinafter the “Basic Contract”), achieving the agreement on the details including thetreatment of the project companies subject to the integration andshareholding ratios.
In 2004 INPEX CORPORATION accomplished the integration ofJapan Oil Development Co., Ltd. (JODCO), INPEX Java Ltd. (disposal was completed on September 30, 2010) and INPEX ABK, Ltd.
which are three of four companies covered by the Basic Agreement. Although INPEX Southwest Caspian Sea Ltd. (now INPEXSouthwest Caspian Sea, Ltd.) would become a wholly owned subsidiary of INPEX CORPORATION by means of a share exchange
and the procedures were undertaken, the share exchange contract
was invalidated owing to failure to accomplish the terms and conditions of the share exchange contract and the planned share exchange was cancelled. Following the dissolution of JNOC on April
1, 2005, the Minister of Economy, Trade and Industry succeeded to
the INPEX Southwest Caspian shares held by JNOC. The Company
continues to study the possibility to acquire the shares. However,the METI’s future treatment of these shares is undecided and, depending on the result of review in accordance with the Reconstruction Finance Keeping Act, acquisition of INPEX Southwest Caspianshares could be unavailable.

The treatment of Sakhalin Oil and Gas Development Co., Ltd.
(hereinafter “SODECO”), INPEX Masela, Ltd., INPEX North Caspian Sea, Ltd., INPEX North Makassar, Ltd. (liquidation proceedings completed on December 19, 2008), and INPEX Offshore
North Campos, Ltd. (following the acquisition of all shares in thiscompany by private-sector shareholders, including INPEX CORPORATION, this company was sold to a third-party in October2019), was agreed between INPEX CORPORATION and JNOC in
the MOU of February 5, 2004. Regarding the treatment of sharesof SODECO, refer to the following section “(2) Treatment of theshares of Sakhalin Oil and Gas Development (SODECO) ownedby the Japanese government”. With regard to the transfer to INPEX CORPORATION of the shares in the above project companies other than SODECO, it was decided that the shares are to betransferred for cash compensation as soon as prerequisites suchas the consent of the oil-producing country and joint venture
partners and the possibility of appropriate asset evaluations arein place. However, the transfer of shares held by JNOC in theabove companies has not been decided and the shares in theabove project companies were succeeded to by the Japan Organization for Metals and Energy Security (hereinafter “JOGMEC”)
on the dissolution of JNOC on April 1, 2005, except shares related to INPEX North Makassar, Ltd., to which the Minister of Economy, Trade and Industry succeeded. JOGMEC states in its“medium-term objective” and “medium-term plan” that theshares succeeded to from JNOC will be disposed of at an appropriate time and in an appropriate manner. However, the timing
and manner of disposal for those shares in the above companies
held by JOGMEC that have not been acquired by INPEX CORPORATION have not been decided, and it is possible that theCompany will be unable to acquire these shares.

(2) Treatment of the shares of Sakhalin Oil and
Gas Development (SODECO) owned by
the Japanese government

The Japanese government (the Minister of Economy, Trade andIndustry) owns 50% of the shares of SODECO. SODECO was established in 1995 to engage in an oil and natural gas explorationand development project located on the northeast continental
shelf off Sakhalin Island. The Company holds 6.08% of SODECO
shares issued and outstanding.
Regarding the future of this project, we will take appropriate
measures while considering the current international situation andtrends in factors including the activities of the government.

Business and Financial Overview

2. RELATIONSHIP WITH THE JAPANESE GOVERNMENT(1) Treatment of shares of the Group’s projectcompany previously owned by Japan National
Oil Corporation (JNOC)Management Foundation to Advance Growth Strategies

The Group has entered into production sharing contracts withcountries including Indonesia and Caspian Sea area, and therefore holds numerous participating interests in those regions.
Production sharing contracts are agreements by which one orseveral oil companies serve as contractors that undertake at theirown expense exploration and development work on behalf of thegovernments of oil-producing countries or national oil companies
and receive production from the projects as cost recovery andcompensation. That is to say, when exploration and development
work results in the production of oil or natural gas, the contractors
recover the exploration and development costs they incurred bymeans of a share in the production. The remaining production(crude oil and gas) is shared among the oil-producing country or
national oil company and the contractors according to fixed allocation ratios. (The contactors’ share of production after cost recovery is called “profit oil and gas.”) On the other hand, in cases
when exploration fails and expected production is not realized,
the contractors are not to recover their invested funds.

3. TREATMENT OF SHARES OF THE GROUP’S PROJECT COMPANY OWNED BY
JAPANESE GOVERNMENT AND JOGMEC

Growth Strategies for Value Creation

Although we strive to manage risks and mitigate their impact
by taking these countermeasures, they by no means cover all possible risks. As a result, the impact from individual events cannot
be completely eliminated.

INPEX’s Vision and Value Creation

We conduct financial risk management regarding crude oiland natural gas prices, currency exchange rates, interest rates
and securities prices by identifying their respective risks associated with fluctuations and establishing corresponding management
and hedging methods.
To tackle climate change, we have set our goal of achieving
net zero carbon emissions by 2050 in line with the Paris Agreement objectives. Towards this goal, the Group will actively promote five business pillars to offer solutions responding to theneeds of society in an age of transformation towards a net zerocarbon society. Specifically, we will (1) develop a hydrogen business, (2) reduce CO2 emissions from the oil and gas business (promotion of CCUS, etc.), (3) enhance and emphasize renewableenergy initiatives, (4) promote carbon recycling and cultivate new
business opportunities and (5) promote forest conservation. By
actively promoting these 5 net zero businesses, we will proactively
respond to the shift towards a net zero carbon society and aim to
be a pioneer of energy transformation.

4. CLASS A STOCK(1) Overview of the classified share
1) Reason for the introduction

The Company was established as the holding company througha stock transfer between INPEX CORPORATION and Teikoku OilCo., Ltd. on April 3, 2006. Along with this, a classified share originally issued by INPEX CORPORATION (prior to the merger) wastransferred and at the same time the Company issued a classified
share with the same effect (hereinafter the “Class A Stock”) to the
Minister of Economy, Trade and Industry. The classified share originally issued by INPEX CORPORATION was the minimally required
and a highly transparent measure to eliminate the possibility ofmanagement control by foreign capital while not unreasonably impeding the efficiency and flexibility of management based on theconcept in the Report discussed in the above section 3. “TREATMENT OF SHARES OF THE GROUP’S PROJECT COMPANYOWNED BY JAPANESE GOVERNMENT AND JOGMEC.” INPEXCORPORATION is identified as a company that should comprisepart of a core company for Japan’s oil and gas upstream industry
and is expected to play a role in efficient realization of a stable supply of energy for Japan as a national flagship company. On the basis of the concept of the Report, following a speculative acquisitionor an attempt at management controlled by foreign capital, Class

A Stock is designed and issued to be highly transparent while notunreasonably impeding the efficiency and flexibility of management and to keep the effects of any such speculative acquisition to
the necessary minimum. At the same time, Class A Stock maintains
the Company’s role in the efficient implementation of a stable supply of energy for Japan as a core business, so that management is
not conducted in a way contradictory to that role and no negative
impact is felt.

2) Shareholders’ meeting resolutions, dividends,
distribution of residual assets, and redemption

Unless otherwise provided by laws or ordinances, the Class
A Stock does not have any voting rights at the Company’s generalshareholders’ meetings. With regard to cash dividends paid andthe distribution of residual assets, the Company concluded
a stock split at a ratio of 1:400 of common stock with October 1,
2013, as the effective date. For Class A Stock (unlisted) no stock
split was conducted. The Articles of Incorporation specify that
dividends of Class A Stock are equivalent to dividends of a common stock prior to the stock split. The Class A Stock will be redeemed by resolution of the Board of Directors of the Company
if the holder of the Class A Stock requests redemption or if the

INPEX CORPORATION Integrated Report 2022

99

Oil and Gas Reserves and Production Volume
INPEX’s Vision and Value Creation

1. Oil and Gas Reserves
Class A Stock is transferred to a party other than the governmentof Japan or an independent administrative body that is fully funded by the government of Japan.

3) Veto rights in the Articles of Incorporation4) Criteria for the exercise of veto rights provided in thecriteria for the exercise of the Class A Stock holder’svoting rights

1) Possibility of conflict of interest between national
policy and the Company and its common shareholders

It is conceivable that the Minister of Economy, Trade and Industry
could exercise the veto rights in accordance with the above criteria provided in the Notice. As the said criteria have been provided
from the standpoint of efficient realization of a stable supply ofenergy to Japan, it is possible that the exercise of the veto rights
by the Minister of Economy, Trade and Industry could conflict with
the interest of other shareholders who hold the Company’s common shares. Also, it is possible that the said criteria could bechanged in the light of energy policy.

2) Impact of the exercise of veto rights on the price ofshares of common stock

As mentioned above, as the holder of the Class A Stock has theveto rights over certain important matters in connection with thebusiness of the Company, the actual exercise of the veto rights
over a certain matter could have an impact on the price of theCompany’s shares of common stock.

3) Impact on the Company’s degree of freedom inbusiness and business judgment

As the Minister of Economy, Trade and Industry holds the Class
A Stock with the previously mentioned veto rights, the Company
needs a resolution of the meeting of the holder of the Class
A Stock concerning the above matters. For this reason, the Company’s degree of freedom in management in those matters could
be restricted by the judgment of the Minister of Economy, Tradeand Industry. Also, attendant on the need for a resolution of themeeting of the holder of the Class A Stock concerning the above
matters, a certain period of time is required for procedures suchas the convening and holding of meetings and resolutions and forthe processing of formal objections, if necessary.

The Board of Directors of the Company is currently composed of
12 members, five of whom are outside directors.
Two of the five outside directors have many years’ experienceand knowledge of the Company’s business and are able to offer
objective, professional advice regarding operations. For this reason, they were asked to join the Board of Directors to contributeto the development of the Company’s business. One of the directors concurrently serves as an advisor of Mitsubishi Corporation(hereinafter “shareholder corporations”).
At the same time, however, the shareholder corporations are
involved in businesses that overlap with those of the Company.
The Company therefore recognizes that it must pay particularattention to corporate governance to avoid conflicts of interest inconnection with competition and other matters.
To this end, all Company directors, including the one outside
director described above, are required to sign a written undertaking to carry out their duties as officers of the Company appropriately and with the highest regard for the importance of suchmatters as their obligations in connection with noncompetitive
practices under the Japanese Companies Act, the proper mannerfor dealing with conflict of interest, and confidentiality.

Japan
Crude oil(MMbbl)INPEX CORPORATION Integrated Report 2022

Eurasia,
Middle East & Africa

Asia & Oceania
Gas
(Bcf)

Proved developed and undeveloped reserves
INPEX CORPORATION and Consolidated Subsidiaries
As of December 31, 2020
16
646
Extensions and——discoveries
Acquisitions and sales——
Revisions of previous
0
4
estimates
Interim production(1)(40)
As of December 31, 2021
15610
Equity-method affiliates——
As of December 31, 2020——
Extensions and——discoveries
Acquisitions and sales——
Revisions of previous——
estimates
Interim production——
As of December 31, 2021——
Proved developed and undeveloped reserves
As of December 31, 2021
15
610
INPEX CORPORATION and Consolidated Subsidiaries
As of December 31, 2021
15
610
Extensions and——discoveries
Acquisitions and sales——
Revisions of previous
127
estimates
Interim production(1)(37)
As of December 31, 2022
15600
Equity-method affiliates
As of December 31, 2021——
Extensions and——discoveries
Acquisitions and sales——
Revisions of previous——
estimates
Interim production——
As of December 31, 2022——
Proved developed and undeveloped reserves
As of December 31, 2022
15
600
Proved developed reserves
INPEX CORPORATION and Consolidated Subsidiaries
As of December 31, 202215591
Equity-method affiliates
As of December 31, 2022——
Proved undeveloped reserves
INPEX CORPORATION and Consolidated Subsidiaries
As of December 31, 202209Equity-method affiliates
As of December 31, 2022——

Crude oil(MMbbl)Gas(Bcf)

Crude oil(MMbbl)Gas(Bcf)

Americas
Crude oil(MMbbl)

Total

Gas
(Bcf)

Crude oil(MMbbl)

Gas
(Bcf)

152

4,359

2,476

215

39

10

2,684

5,229

—

—

—

—

—

—

—

—

—

—

(6)

—

1

1

(5)

1

(0)

1

133

(20)

(3)

21

129

6

(19)
133
—
2

(377)
3,983
—
357

(99)
2,504
—
15

(10)
186
—
—

(3)
34
—
—

(9)
22
—
—

(121)
2,686
—
16

(436)
4,801
—
357

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

(0)

(18)

6

—

—

—

5

(18)

(0)
1

(21)
318

(4)
17

—
—

—
—

—
—

(4)
18

(21)
318

134

4,300

2,520

186

34

22

2,704

5,118

133

3,983

2,504

186

34

22

2,686

4,801

—

—

—

—

—

—

—

—

—

—

45

53

(3)

(2)

42

51

(3)

10

283

(3)

(18)

(5)

263

30

(16)
114

(362)
3,632

(118)
2,714

(12)
223

(3)
10

(3)
12

(138)
2,853

(414)
4,467

1

318

17

—

—

—

18

318

—

—

—

—

—

—

—

—

—

—

(6)

—

—

—

(6)

—

(0)

(24)

(2)

—

—

—

(2)

(24)

(0)
1

(21)
273

(3)
6

—
—

—
—

—
—

(3)
7

(21)
273

115

3,905

2,719

223

10

12

2,860

4,740

110

2,839

1,730

223

9

12

1,865

3,665

1

214

5

—

—

—

6

214

4

793

983

—

0

0

988

802

0

59

1

—

—

—

1

59

Notes: 1. Based on SEC disclosure standards, the Group discloses proved reserves in each country containing 15% or more of its proved reserves. As of December 31,
2022, the Group held proved reserves in Australia of approximately 109 million barrels for crude oil and approximately 3,494 billion cubic feet for natural gas, fora total of approximately 758 million BOE.
2. Proved reserves (as of December 31, 2022) of the following blocks and fields include the portion attributable to non-controlling interests.
		 Eurasia, Middle East & Africa: ACG (49.00%), Kashagan (49.00%), Snorre, etc. (49.49%), Abu Dhabi Onshore Concession (34.24%)
3. MMbbl: Million barrels
4. Bcf: Billion cubic feet
5. Crude oil includes condensate and LPG
6. Oil and gas reserves are rounded to the nearest whole number.
7. Eurasia and Middle East & Africa are combined.

Standardized measure of discounted future net cash flows and their changes relating to proved oil and gas
reserves for the year ended December 31, 2022
Disclosure contents for the standardized measure of discounted
future net cash flows and their changes relating to proved reserves for the year ended December 31, 2022 are determined in100

presented in accordance with the Accounting Standards Codification Topic 932 “Extractive Activities —Oil and Gas” (“Topic 932”).
The Group’s proved reserves as of December 31, 2022, were 2,860
million barrels for crude oil, condensate and LPG, and 4,740 billion cubic feet for natural gas, for a total of 3,738 million boe.

The following tables list the proved reserves of crude oil, condensate, LPG and natural gas of INPEX CORPORATION, its consolidated subsidiaries and equity-method affiliates (the “Group”) on
main projects. Disclosure contents for proved reserves are determined in accordance with the rules and regulations of the U.S. Financial Accounting Standards Board (the “FASB”), and are

Business and Financial Overview

5. CONCURRENTLY SERVING OUTSIDE DIRECTORS

Proved reserves

Management Foundation to Advance Growth Strategies

Criteria concerning the exercise of the veto rights have been established in a Ministry of Economy, Trade and Industry Notice(No. 54, 2022) (hereinafter the “Notice”). The criteria stipulate theexercise of veto rights only in the following specific cases.
•	When resolutions pertaining to appointment or removal of Directors and integration are not voted down and it is judgedthat the probability is high that the Company will engage inmanagement inconsistent with the role that a core company
should perform for efficient realization of a stable supply of energy to Japan.
•	With regard to decisions related to the disposal of all or part ofsignificant assets, when resolutions pertaining to disposition ofmaterial assets are not voted down and the objects of disposition are oil and natural gas exploration or production rights orrights similar thereto or shares or ownership interest in the
Company’s subsidiary whose principal assets are said rights
and it is judged that the probability is high that the Company
will engage in management inconsistent with the role thata core company should perform for efficient realization of a stable supply of energy to Japan.
•	When resolutions pertaining to amendments to the Company’s
Articles of Incorporation relating to changes in the Company’sbusiness objectives, reduction in the amount of capital, or dissolution are not voted down and it is judged that the probability is high that the Company will engage in managementinconsistent with the role that a core company should perform
for efficient realization of a stable supply of energy to Japan.
•	When resolutions pertaining to amendments to the Articles ofIncorporation granting voting rights to any shares other thanthe common shares of the Company are not voted down andcould have an effect on the exercise of the voting rights of theClass A Stock.
It is provided that the above criteria shall not be limited in theevent that the Notice is changed in the light of energy policy.

Following a speculative acquisition or an attempt at management
controlled by foreign capital, Class A Stock is designed and issued to be highly transparent while not unreasonably impeding
the efficiency and flexibility of management and to keep the effects of any such speculative acquisition to the necessary minimum. At the same time, Class A Stock maintains the Company’srole in the efficient implementation of a stable supply of energy
for Japan as a core business, so that management is not conducted in a way contradictory to that role and no negative impact isfelt. Nevertheless, the anticipated risks in connection with theClass A Stock include the following.

Growth Strategies for Value Creation

The Articles of Incorporation of the Company provide that an approval resolution of the meeting of the holder of the Class
A Stock is necessary in addition to resolutions of the Company’s
general shareholders’ meetings and resolutions of meetings ofthe Board of Directors for the decisions on certain important matters such as the appointment or removal of Directors, dispositionof material assets, changes to the Articles of Incorporation, business integration, capital reduction or company dissolution in connection with the business of the Company. Accordingly, theMinister of Economy, Trade and Industry, as the holder of theClass A Stock, has veto rights over these important matters. With
regard to the cases in which the Class A Stock veto rights are exercisable, please refer to “4) Criteria for the exercise of veto rights
provided in the criteria for the exercise of the Class A Stock holder’s voting rights”, below.

(2) Risk in connection with the Class A Stockaccordance with the rules and regulations of the FASB, and arepresented in accordance with Topic 932.

INPEX CORPORATION Integrated Report 2022

101

Millions of yen
December 31, 2021

INPEX CORPORATION and Consolidated Subsidiaries
Future cash inflows
Future production and development costs
Future income tax expenses
Future net cash flows
10% annual discount for estimated timing of cash flows
Standardized measure of discounted future net cash flows

Total consolidated and equity-method affiliates in standardized
measure of discounted future net cash flows

Japan

Asia & Oceania

Americas¥ 23,355,208(8,358,835)(10,924,329)
4,072,045(1,972,952)
2,099,093¥ 833,868(291,923)(174,799)
367,146(201,968)
165,178¥ 2,912,521(1,215,605)(157,632)
1,539,284(546,145)
993,138¥ 19,356,096(6,695,678)(10,582,717)
2,077,701(1,191,511)
886,190¥ 252,724(155,629)(9,180)87,914(33,328)
54,586421,317(144,212)(115,078)
162,027(59,307)

—
—
—
—
—

291,411(101,817)(66,910)
122,684(51,722)

129,907(42,395)(48,168)
39,343(7,585)—————

102,721—70,96331,758—¥ 2,201,813¥ 165,178¥ 1,064,101¥   917,948

Total consolidated and equity-method affiliates in standardized
measure of discounted future net cash flows

Total

Japan

Asia & Oceania

Eurasia,
Middle East &AfricaAmericas¥ 40,247,501(12,123,550)(21,996,683)
6,127,269(2,867,983)
3,259,286¥1,356,592(370,071)(301,187)
685,334(395,319)
290,014¥ 4,084,837(1,255,646)(746,640)
2,082,551(633,382)
1,449,169¥ 34,694,585(10,445,402)(20,943,860)
3,305,324(1,821,683)
1,483,641¥ 111,488(52,431)(4,996)54,061(17,599)
36,462494,544(103,176)(148,026)
243,342(92,012)

—
—
—
—
—

436,632(89,726)(112,762)
234,145(90,243)

57,912(13,450)(35,265)
9,198(1,769)—————151,330—

143,9027,429—¥ 3,410,616¥ 290,014¥ 1,593,071¥ 1,491,069¥ 36,462

Notes: 1. Reserves of the following blocks and fields include the portion attributable to non-controlling interests.
		 Eurasia, Middle East & Africa: ACG (49.00%), Kashagan (49.00%), Snorre, etc. (49.49%), Abu Dhabi Onshore Concession (34.24%)
2. Amounts are basically rounded to the nearest million.
3. Eurasia and Middle East & Africa are combined.

102

INPEX CORPORATION Integrated Report 2022

Eurasia,
Middle East &AfricaAmericas¥

Equity-method
affiliates¥ 2,201,813¥165,178¥ 993,138

886,190¥ 54,586

—

—

—

—

—

—

(958,803)(41,350)(292,301)(571,804)(25,816)(27,532)

3,197,151

151,548

743,519

2,127,071

70,376

104,638

208,492

3,119

97,72883,74919,386

4,511(39,882)(397)(24,807)(36,918)

22,17069

1,830,684
221,261(3,602,874)

1,179
16,433(31,086)(7,105)98,603(312,264)

1,988,006
92,395(3,262,579)(111,841)
4,830
2,685

(39,556)
8,999
370

14,328——41,313(8,305)(18,680)¥102,721

338,446

25,390152,658

136,218

8,391

15,789¥ 3,410,616¥290,014¥1,449,169¥ 1,483,641¥ 36,462¥151,330

2. Oil and Gas Production
2018/3

2019/3

2019/122020/122021/122022/12

Oil (Thousand bbl/day):Japan
Asia & Oceania
Eurasia (Europe & NIS)
Middle East & Africa
Americas
Total

3.7
21.4
41.5
257.2
5.4
329.1

3.5
18.9
46.5
231.2
3.2
303.3

3.1
47.7
47.7
244.6
9.2
352.4

3.0
42.7
51.9
225.8
7.7
331.1

2.9
51.6
50.1
230.9
8.1
343.5

2.6
45.3
64.2
270.6
7.5
390.3

Natural gas (MMcf/day):Japan
Asia & Oceania
Eurasia (Europe & NIS)
Middle East & Africa
Americas
Total

145.6
374.9
21.4
—
107.8
649.7

131.6
400.1
27.4
—
89.9
649.0

118.6
1,019.7
24.5—
63.6
1,226.4

110.5
1,076.5
24.8—
52.7
1,264.6

110.2
1,088.9
26.4—
25.8
1,251.3

100.9
1,048.3
53.7—
8.6
1,211.5

Crude oil and natural gas (Thousand BOE/day):Japan
Asia & Oceania
Eurasia (Europe & NIS)
Middle East & Africa
Americas
Total

31.1
91.4
45.3
257.2
24.9
449.9

28.2
94.1
51.3
231.2
19.5
424.3

25.4
243.0
52.1
244.6
21.0
586.2

23.7
250.0
56.3
225.8
17.5
573.4

23.6
261.9
54.8
230.9
13.0
584.3

21.0
247.4
73.8
270.6
9.4
622.2

Business and Financial Overview

Equity-method affiliates
Future cash inflows
Future production and development costs
Future income tax expenses
Future net cash flows
10% annual discount for estimated timing of cash flows
Share of equity-method investees’ standardized measure of
discounted future net cash flows

Asia & Oceania

Notes: 1. Reserves of the following blocks and fields include the portion attributable to non-controlling interests.
		 Eurasia, Middle East & Africa: ACG (49.00%), Kashagan (49.00%), Snorre, etc. (49.49%), Abu Dhabi Onshore Concession (34.24%)
2. Amounts are basically rounded to the nearest million.
3. Eurasia and Middle East & Africa are combined.

¥ 54,586

Millions of yen

INPEX CORPORATION and Consolidated Subsidiaries
Future cash inflows
Future production and development costs
Future income tax expenses
Future net cash flows
10% annual discount for estimated timing of cash flows
Standardized measure of discounted future net cash flows

INPEX CORPORATION andConsolidated Subsidiaries
Standardized measure at beginning of
the period, as of January 1, 2022
Changes resulting from:
Sales and transfers of oil and gas
produced, net of production costs
Net changes in oil and gas prices andproduction costs
Development costs incurred
Changes in estimated future
development costs
Revisions of previous quantity estimates
Accretion of discountNet change in income taxes
Extensions, discoveries and improved
recoveries
OtherStandardized measure at end of
the period, as of December 31, 2022

Japan

The following tables show the Group’s production by segment for the year ended December 31, 2022.

Notes: 1. Reserves of the following blocks and fields include the portion attributable to non-controlling interests.
		 Eurasia, Middle East & Africa: ACG (49.00%), Kashagan (49.00%), Abu Dhabi Onshore Concession (34.24%)
2. Amounts are basically rounded to the nearest million.
3. Eurasia and Middle East & Africa are combined.

December 31, 2022

Total

Management Foundation to Advance Growth Strategies

Equity-method affiliates
Future cash inflows
Future production and development costs
Future income tax expenses
Future net cash flows
10% annual discount for estimated timing of cash flows
Share of equity-method investees’ standardized measure of
discounted future net cash flows

Total

Eurasia,
Middle East &AfricaMillions of yen

Growth Strategies for Value Creation

The translation of U.S. dollar amounts into yen amounts iscomputed by applying the year-end exchange rates (TTM) of¥115.02 and ¥132.70 to the U.S. dollar as of December 31, 2021
and December 31, 2022, respectively.
Since these figures are calculated in accordance with the rules
set forth by the FASB, which have the following aspects, they do
not represent the fair market value nor the Group’s estimation forthe present value of the cash flows of reserves of crude oil, condensate, LPG and natural gas.
• No economic value is attributed to potential reserves.
• A prescribed discount rate of 10% is applied.
• Oil and gas prices are subject to constant fluctuations despite
the assumptions of constant oil and gas prices of Topic 932.

INPEX’s Vision and Value Creation

In calculating the standardized measure of discounted future
cash inflows, the arithmetic average of oil and gas prices at thefirst day of each month during the current fiscal year is applied tothe estimated annual future production from proved reserves. Future development and production costs are estimated based
upon the assumptions of constant oil and gas prices and the continuation of existing economic, operating and regulatory conditions. Future income tax expenses are calculated by applying theyear-end statutory tax rates to estimated future pretax cash flows
less the tax basis of the properties involved based upon laws andregulations already legislated at year-end. The discount is computed by applying a prescribed discount rate of 10% to the estimated future net cash flows.

Notes: 1. LPG produced outside Japan is included in crude oil.
2. The above production volumes include proportional interests in production by equity-method affiliates.
3. The production volume under the production sharing contracts entered into by the INPEX Group corresponds to the net economic take of the Group.

INPEX CORPORATION Integrated Report 2022

103

Corporate Information (As of December 31, 2022)
Information Disclosure and Activities for Shareholders and Investors

Corporate Data

INPEX IR Activities
INPEX is committed to timely and appropriate disclosure of information to shareholders and investors and to close
communication with them. Feedback received from shareholders and investors is regularly reported to management as part ofour efforts to enhance corporate value.

Company Name INPEX CORPORATION

Nikkei Stock Average (Nikkei 225)TOPIX
JPX-Nikkei Index 400
MSCI Japan Index
MSCI World Energy Index
FTSE4Good Developed Index/FTSE4Good Japan Index
FTSE Blossom Japan Index/FTSE Blossom Japan Sector
Relative Index

MSCI ESG Leaders Indexes/MSCI Japan ESG SelectLeaders Indexes
S&P/JPX Carbon Efficient Index
STOXX Global ESG Leaders Index
ECPI World ESG Equity/
ECPI Global Carbon Liquid/
ECPI Global Developed ESG Best in ClassSOMPO Sustainability Index
iSTOXX MUTB Japan Platinum Career 150 Index

Website Information

About INPEXOur Business

https://www.inpex.co.jp/english/

https://www.inpex.co.jp/english/company/

https://www.inpex.co.jp/english/
business/

INPEX Vision @2022
https://www.inpex.
co.jp/english/company/
midterm.html

104

INPEX CORPORATION Integrated Report 2022

Authorized Shares

Total Number of Shareholders and Issued Shares

3,600,000,000 common stocks

Common Stock 220,536/1,386,667,167 sharesClass A Stock* 1 shareholder (Minister of Economy, Trade and Industry) / 1 share

1 Class A Stock

Credit Rating Agency

Status of Inclusion in Major Indexes (As of June 2023)

Audit Unit

Long-Term
Short-Term
Credit Ratings Credit Ratings
Rating & Investment Information (R&I)
AA (stable)a-1+
Rating & Japan Credit Rating Agency AA+ (stable)—

HSE Unit

Moody’sStandard & Poor’s

Stock Data

*The Company’s Articles of Incorporation stipulate that certain major corporate decisions require a resolution by theholder of the Class A Stock in addition to the approval of the shareholders’ meetings or the Board of Directors.

Major Shareholders (Common Stock)

Long-Term
Short-Term
Credit Ratings Credit Ratings
A2 (stable)—A- (positive)
A-2

Legal Unit

Credit Rating Agency

Strategic Projects Office

Credit Rating (As of June 30, 2023)

General Administration Division

205

Research, exploration, development,
production and sales of oil, natural gas
and other mineral resources, other related businesses and investment and lending to the companies engaged in these
activities, etc.

Corporate Strategy & Planning Division

130

Main Business

Finance & Accounting Division

127

INPEX Value Assurance
System Committee

Logistics & IMT Division

Number of attending
shareholders at general meeting

3,364Technical Division

General Meetings of Shareholders
The Notice of the 17th Ordinary General Meeting of Shareholders, which included information on how to access the materials for the
meeting, was mailed to shareholders on March 6, 2023, three weeks before the Ordinary General Meeting (For shareholders who requested delivery of documents, Material of the 17th Ordinary General Meeting of Shareholders was mailed). Prior to the dispatch of
the above materials, the electronic convocation of this General Meeting of Shareholders were posted on the Company’s website on
February 27. In addition, the proceedings of
Fiscal 2020 results Fiscal 2021 results Fiscal 2022 results
the Ordinary General Meeting of Shareholders were streamed live via the internet.
Total number of shareholders
108,717
136,935
220,536

Corporate HSE Committee
Information Security Committee

Global Energy Marketing Division

1
5
5

Sustainability Committee

Domestic Energy Supply & Marketing Division052Compliance Committee

President & CEO

New Ventures & Global Exploration Division

1
1
3

INPEX Advisory Committee

Hydrogen & CCUS Development Division

2

Number of
Employees(Consolidated)

Executive Committee

Renewable Energy & Power Business Division

2

Akasaka Biz Tower,
5-3-1 Akasaka, Minatoku, Tokyo 107-6332,
Japan

Audit & Supervisory
Board Members’ Office

Asia Projects Division

3

Company
Headquarters

Nomination and Compensation
Advisory Committee

Oceania Projects Division

Events in fiscal
2022
128
100

¥290,809,835,000

Board of Directors

Europe & Middle East Projects Division

Events in fiscal
2021
140
89

CapitalAudit & Supervisory Board(members)

Abu Dhabi Projects Division

One-on-one meetings with Japanese institutional investors and analysts
One-on-one meetings with overseas institutional investors and analysts
Financial results briefings for institutional investors and analysts (live streaming
provided since 2022 with Japanese-English simultaneous interpretation)
Overseas road shows
Conferences organized by securities companies
Briefings for individual investors

Events in fiscal
2020
121
54

April 3, 2006

Americas Projects Unit

Activities

Established

General Meeting of Shareholders

Domestic Exploration & Production Division

Overview of IR Activities
INPEX is eager to resume face-to-face IR activities, such as overseas road shows and facility tours for institutional investors,
analysts and individual investors that had been partially downscaled or suspended since 2020 to prevent the spread of
COVID-19. INPEX’s spokespersons include the Representative Director and Chairman; Representative Director, President andCEO; Senior Vice President, Corporate Strategy & Planning; and Senior Vice President, Finance & Accounting. Our Corporate
Communications Unit is in charge of practical matters related to IR activities.
Over the last three fiscal years, the following meetings were held to actively exchange views on INPEX’s Long-term Strategy
and Medium-term Business Plan, financial forecasts, cash allocation, shareholder returns, the situation of Ichthys and otherprojects, climate change actions, corporate governance, and other topics. Opinions and concerns raised by shareholders andinvestors through such dialogue have been fed back to INPEX’s management and Board of Directors. They will receive such
feedback about four times a year from the fiscal year ending December 31, 2023 (fiscal 2023), onward.

Organization Chart (As of June 30, 2023)

Shareholding by Shareholder Type
Percentage of
Number of
total common
common sharesshares* (%)

Name

Minister of Economy, Trade and Industry
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan (Trust Account)
Japan Petroleum Exploration Co., Ltd.
JAPAN SECURITIES FINANCE CO., LTD.
SMBC Nikko Securities Inc.
STATE STREET BANK WEST
CLIENT - TREATY 505234
CEP LUX - ORBIS SICAV
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
JPMorgan Securities Japan Co., Ltd.

276,922,800
180,179,600
67,459,000
53,446,600
33,129,400
28,050,100

21.19
13.79
5.16
4.09
2.53
2.15

19,864,543

1.52

19,805,492
19,331,456
17,116,156

1.52
1.48
1.31

*The shareholder ratio is calculated after subtracting treasury shares (79,762,500 shares).
The shareholder ratio is rounded off to the nearest whole number.

IR
https://www.inpex.co.jp/english/ir/

Sustainability
https://www.sustainability-report.inpex.co.jp/fy2022/en/
Sustainability
ReportShareholder type

Financial Institutions(Including Trust Accounts)
Securities Companies
Other Domestic
Corporations
Minister of Economy,
Trade and Industry1
Foreign Corporations
Individuals and Other
Treasury Shares

Number ofshareholders

Number of Percentage ofcommon total commonsharesshares2 (%)

84 319,860,263

23.07

68

83,571,492

6.03

1,173

89,660,634

6.47

1 276,922,800

19.97

1,338 414,660,817
217,871 122,228,661
1 79,762,500

29.90
8.81
5.75

1. Excludes one Class A Stock
2. The shareholder ratio is rounded off to the nearest whole number.

Inquiries
For IR inquiries, as well as to offer comments
and opinions about this report, please contact
below.
Corporate Strategy & Planning DivisionCorporate Communications Unit
Investor Relations GroupWeb site:www.inpex.co.jp/english/ir/inquiries.html