Cash dividends per share,
Payout ratio■Cash dividends per share

Payout ratio

10,000 (Yen)

8,000(%) 25

8,000

20

6,000

6,000

15

5,500
14.7
4,000

13.0

10

12.1

2,000

5

0

0

2009

024

2010

2011

INPEX CORPORATION Annual Report 2011

I would like to close by thanking ourshareholders and all other stakeholders
for support and understanding.

Sincerely,

Toshiaki Kitamura
President & CEO

July 2011

Business Overview
2.1

Proﬁle and History

026

2.2

Oil and Natural Gas Business

028

2.3

Market Environment and Forecasts

030

2.4

Strengths and Strategies

032

2.5

Investment Plans and Financial Strategies

034

Performance / Message
Business Overview

15%, but we are currently at a stage
where we are allocating our retained
earnings toward attaining our mediumterm targets, so we are not setting a
numerical target for a performancebased payout ratio. I believe that once
our growth pace reaches cruising
speed through the commercializationof the Ichthys and Abadi projects wewill review our policy on returns toshareholders.
We expect the year ending
March 31, 2012, to be a period ofgreat progress toward reaching our
future growth targets including the
Ichthys Project where FID is planned.
As President, I pledge to lead thecompany ﬁrmly and steadily so as torealize our projects and achieve ourgrowth targets, which will enhance ourcorporate and shareholder value.

Project Overview

We are aware of our social
responsibility to provide a stable and
efﬁcient supply of energy, and as a
global independent upstream company
we strive to take coexistence with andthe development of the international
community into consideration in
conducting our business. We are awarethat our presence as a global upstream
company is not enough, so we believe
it is necessary to strive to engage inmeaningful communication with all of
our stakeholders so as to inform themof our company’s growth potential andthe progress of our projects in waysthat are easy to understand, so as tobe properly appreciated as a company.
Fortunately, I had many opportunities
in the past year to exchange opinionswith our stakeholders including
shareholders through our IR andother activities. The expectations andserious suggestions received from ourshareholders made me re-acknowledge
my desire to lead our company ﬁrmly
and steadily as President of INPEX. In
the current year as well, I encourage
our stakeholders to voice opinions
directly at our General Shareholders’Meeting or through our IR activities.
It is my hope that we can increase ourmutual communications.
We paid a dividend of ¥6,000 per
share during the year ended March 31,
2011 (full year), a year-on-year increaseof ¥500, so as to return proﬁts to ourshareholders. For the past several
years, our payout ratio has been 10%–2

Geological survey

Corporate Responsibility
and Management

I shall continue to lead INPEX ﬁrmly
and steadily, keeping in mind the
expectations and stern guidance of our
stakeholders as we pursue further growth
as a global company.

Financial /Corporate Information

6. Message to Our Stakeholders

Net production volume

Proﬁle and History

423(Thousand boed)

Natural gas

418

423
405

Crude oil

Our company was founded in October 2008 through the business integration of INPEXCORPORATION and Teikoku Oil Co., Ltd. Utilizing several decades of performance indeveloping oil and natural gas ﬁelds and the experience gained through 71 projects in 26
countries (as of June 30, 2011), we are actively promoting the exploration, development
and production of oil and natural gas.

Thousand boed

405

Mission and Vision
175

181

184
182

187

223

218

2009

2010

Business Overview

The mission of the INPEX is to provide a stable and
efﬁcient supply of energy to customers by exploring anddeveloping oil and natural gas resources both domesticallyand throughout the world. Through its business, we
aim to become an integrated energy company, which
contributes to our community and makes it more livableand prosperous.

Business Overview
INPEX CORPORATION

Teikoku Oil Co., Ltd.

Founded in 1966

INPEX is a corporate group formed by 62 subsidiaries (53consolidated subsidiaries),19 afﬁliates (12 equity-method
afﬁliates) and three subsidiaries of afﬁliates (as of March
31, 2011). Our main business activities are the exploration,
development, production and sale of oil and natural gas
both domestically and throughout the world in areas such
as Asia, Oceania, Eurasia (Europe-NIS), the Middle East,
Africa and the Americas. We also invest in companies
conducting such activities.

Founded in 1941

A leading company in overseas
development of oil and natural gas

A pioneer in the development of oil andnatural gas in JapanFounded to develop oil resources in Indonesia, thecompany operates in Indonesia and Australia as
its core areas, as well as in other areas such as the
Caspian Sea, the Middle East and South America.

Has conducted development and production ofdomestic oil and gas ﬁelds, including the Minami
Nagaoka Gas Field, one of the largest gas ﬁelds inJapan. Also has conducted development in various
regions of Central and South America and North Africa.

Proﬁle243■Number of projects / Number of countries:
26 countries, 71 projects

242

239

■Consolidated net sales: ¥943.1 billion (for the year ended March 31, 2011)
INPEX CORPORATION■Common stock: ¥290,809,835 thousand

October 2008 / Full integration between three companies:
INPEX Holdings Inc., INPEX CORPORATION and Teikoku Oil Co., Ltd.

■Consolidated total assets: ¥2,680.4 billion (as of March 31, 2011)■Consolidated number of employees: 1,854 (as of March 31, 2011)

History
1940

1960

1970

1980

1990

2000

2008

1941

1962

1979

1992

2005

2006

Teikoku Oil Co., Ltd., isfounded.

Japan’s ﬁrst long-distancenatural gas pipeline between
Tokyo and Niigata Prefecture(Tokyo Line) is completed.

The Minami Nagaoka Gas Field withJapan’s largest reserve of natural gas
is discovered in Niigata Prefecture.

Becomes the ﬁrst Japanese company
to participate in an oil development
project in Venezuela.

Exploration rights in the
East China Sea are granted.

Business integration

as a semi-governmental company
to unify the existing Japaneseoil exploration companies atthat time. (Becomes a privatecompany in 1950.)

1973
1970

Japan Oil Development Co., Ltd. (JODCO), is founded.
Acquires interests in the ADMA Block located offshore
Abu Dhabi in UAE.

Discovers the Kashagan,
Ichthys and Abadi ﬁelds.

2005
2001
1984

2004

Teikoku Oil Co., Ltd.
INPEX CORPORATIONINPEX CORPORATIONINPEX CORPORATION Annual Report 2011as a corporation promoting the independent
development of overseas oil resources in accordancewith a contract signed with PERMINA (nowPERTAMINA).

Corporate name ischanged to Indonesia
Petroleum, Ltd.

2006
The Australian Federal Government grants Major
Project Facilitation (MPF) status to the Ichthys LNG
Project.

Acquisition of Japan Oil Development Co., Ltd. (JODCO).
Listing on the First Section of the Tokyo Stock Exchange.

1966
1975

Production starts in the ACG
Oil Field in Azerbaijan.

Changes corporate name to
INPEX CORPORATION.

Production at Minami
Nagaoka Gas Field begins
with completion of the
Koshijihara Gas Plant.
North Sumatra Offshore Petroleum
Exploration Co., Ltd. (precursor to INPEXCORPORATION), is founded.

2011

The joint holding
company INPEX Holdings
Inc., is founded by INPEXCORPORATION and
Teikoku Oil Co., Ltd.

2000

Attaka Field is discovered in Offshore
Mahakam (Indonesia).

026

2007

1998
Acquires interests in the Offshore North
Caspian Block, Kazakhstan; Permit WA 285-P,
offshore Australia; and the Masela Block,Indonesia.

2008
INPEX CORPORATION is founded.
INPEX CORPORATION is founded througha merger of INPEX, Teikoku Oil and INPEX
Holdings. The company headquarters is
moved to Akasaka, Tokyo.

INPEX CORPORATION Annual Report 2011027

Oil and Natural Gas Business

What is oil and natural gas?

Oil/gasCap rockReservoirrockHeat/pressure

Thermoforming of organic matter

Source rock

Business Overview

The business activities of the oil industry can be envisioned as the ﬂow of a river. The
upstream consists of the development and production of oil and natural gas. The midstream
is where products are transported. The downstream refers to reﬁning and sales. Our
mainstay business is to handle operations in the upstream including discovery, drilling,collecting and selling crude oil and natural gas, which exists underground. As shown in thebusiness ﬂow below, business activities in the upstream can be further classiﬁed into theacquisition of blocks, exploration, appraisal, development and production and sales.

Both oil and natural gas are types of organic matter (hydrocarbons) formed from a combination of carbon andhydrogen. Oil is a chemical compound in which large numbers of carbon molecules and hydrogen molecules arejoined together. Under normal conditions (one atmosphere, which is about 15 pounds per square inch; conditions
suitable for human life), oil is a liquid. Conversely, natural gas is a gas under normal conditions. Although there
are differences between the properties of liquid and gas, both burn well.
The oil and gas generated deep underground have a lighter speciﬁc
gravity than the water and soil in geological layers and therefore rise upward
over a period of many years. However, when contacting high-density
geological layers through which they cannot pass, the oil and gas stop risingand form an oil ﬁeld or a gas ﬁeld.
Depending on the excavation site, crude oil and natural gas exhibit
a variety of differences in terms of color (from colorless and transparent toSamples of crude oil and condensate
black), speciﬁc gravity, viscosity and amount of impurities.

Satellite

Offshore drilling rig (platform)

Onshore rig

ConsumerdemandLNG tanker

LNG receiving terminal

Offshore geophysical survey

Business ﬂow (image)

STEP 1

STEP 2

STEP 3

STEP 4

STEP 5Acquisition of
BlocksExploration

Appraisal

Development

Production andSales

We collect extensive informationon laws and country risks related toareas in which oil and natural gas are
expected to exist. We then apply andbid for mining rights and/or explorationand development rights, and enteredinto a contract for exploration anddevelopment.

In addition to terrestrial geologicalsurveys, we utilize geophysical surveys
conducted through aerial photographs,
satellite images and seismic waves inorder to assess the potential subsurface
accumulations of oil and natural gas.
Furthermore, we drill exploratory wellsin order to conﬁrm the presence of oil
and gas ﬁelds.

Once the presence of oil and natural gas
has been conﬁrmed through exploration
activities, we drill an appraisal well toassess the extent of the oil and gas ﬁelds.
We conduct a production test and evaluate
the amount of reserves. In addition, we
make comprehensive judgments regarding
the commercial viability of the ﬁelds. For
example, we examine proﬁtability andcreate development plans.

We drill production wells for the
production of oil and natural gas. We
also construct processing facilities
to separate oil and gas, and remove
impurities and production, and shipping
facilities such as a pipeline to transport
oil and gas.

We perform production and operation
management such as reﬁning/
treatment to create products from theoil and natural gas excavated fromthe production wells. We also perform
marketing and sales for the produced
crude oil, condensate, LPG, natural gas
and LNG.

Contracts with government ofoil-producing countries

Geophysical surveys

Production test

Drilling of production wells

Reﬁning/treatment of natural gas

We investigate underground tectonics such as
the hardness and concentration of rocks thatform the layers of geophysical exploration.

Oil or natural gas is produced in a test to
conﬁrm if there is a sufﬁcient amount forcommercialization.

We drill a well deep into the ground while
joining individual pipes of about 10 meters inlength. The tip of the pipe is equipped witha special drill known as a “bit.” The bit drills
through hard rock and digs into the ground.

After separating oil and removing impurities(e.g., carbon gas, hydrogen), we ship natural
gas that can be used as a product.

Contracts can mainly be divided into concessionagreements and production sharing contracts.
Both contracts normally contain a commitment
for required exploration work in order to locate
oil and natural gas.

Investment for
further exploration,purchase of assets,etc.
(Expansion of reserves andproduction volume)

Christmas tree

To pipeline

High pressure
separator

Refrigeration unit
CO²
separator
Water, oil,
sand

1
028

INPEX CORPORATION Annual Report 2011

Water, oil

CO²

2

3
INPEX CORPORATION Annual Report 2011029

Market Environment and Forecasts
Effect on Our Performance
The sensitivity index for oil prices
and exchange rates when forecasting
consolidated net income for the year
ending March 31, 2012 has been
calculated at approximately ¥2.0 billion
in the event of fluctuations of $1 per
barrel of crude oil and approximately¥2.4 billion in the event of exchange rate
fluctuations of ¥1/$1.

Outlook for Global Energy Demand

The shift to natural gas is
becoming more prominent.
Higher demand for natural gas is
expected, particularly in emerging
economies such as China. Although
total energy demand is predicted toincrease 1.2% annually until 2035, afor natural gas include alternative
demand from other energy sources
such as nuclear power, changes inpolicy concerning climate changesuch as the suppression of carbon
dioxide emissions and rising crude oil
prices, which lead to the selection ofreasonably priced natural gas (i.e., theshift to natural gas).

Natural gas demand by country
or region

World primary energy
demand by fuel
Oil

U.S.
China

EuropeIndia

Middle East
Japan

Coal
Biomass
Renewable and other

Natural gas
Nuclear power
Hydroelectricity

5,000 (Million toe)800 (Billion m³)

4,000

600

3,000

2% annual growth

400

Natural gas

2,000
200

1,000

0

2015

2020

2025

2030

2035

1980

1990

2000

2010

030

INPEX CORPORATION Annual Report 2011

Depreciation (Appreciation) of ¥1/$1 in theexchange rate:+¥2.4 billion (–¥2.4 billion)

Note:
These are trial calculations of the impact on term net profits in the year ending March 31, 2012, in the event of a pricefluctuation of $1 per barrel in crude oil (Brent) or in the event of exchange rate fluctuations of ¥1/$1. Actual impact
will depend on changes in production volume, capital expenditures and recovery costs, and the amount of impact
may not be strictly dependent upon the absolute level of oil prices or the exchange rate.

INPEX is among the mid-tierglobal independent upstream
companies, just behind the oil
majors, and we aim to establish
a firm position in the top groupof global upstream companies.

Currently, our company’s net production
volume is 423 thousand barrels of oil
equivalent per day (boed; for the year
ended March 31, 2011) and our proved
reserves are 1.31 billion boe (as of March
31, 2011). This places us among the
mid-tier global independent upstream
companies.
Through final investment decisions(FIDs) and the commercialization oflarge-scale LNG projects, we will seek
to increase our proved reserves andnet production, then to establish afirm position as a global independent
upstream company by 2020.

Oil companies that conduct upstream
activities can be divided into three
categories: 1) national oil companies ofgovernments in oil-producing countries
that possess oil and natural gas assets, 2)major international oil companies known
as the “oil majors” and 3) companies
that specialize in upstream activities andare second in scale to the oil majors.

Oil companies throughout
the world
National oil companies
Saudi Aramco, CNPC, Petrobras, etc.

Oil majors
ExxonMobil, BP, Shell, TOTAL, etc.

Global independent
upstream companies
INPEX, Apache, BG, etc.

2020

2030 2035

Source: IEA, June 2011

Crude Oil Prices and Exchange Rates

The oil and natural gas business is greatly
affected by changes in crude oil prices andexchange rates. As a result of continued
investment from the financial markets,
the propensity for fluctuation in crude oil
prices exceeds the level of change that the
supply-demand balance (fundamentals)
would normally dictate. Currently, eventhe recovery of demand is uncertain due
to a stagnant economy. The price of Brent
crude is projected to reach high levels
that exceed $90–$100 per barrel. Thereis the possibility of further price increases
in the future. The average exchange rate
for the year ended March 31, 2011, wasin the range of ¥85 to $1. Moreover, yen
appreciation continued with an averageexchange rate of ¥81 to $1 during AprilJune, 2011.

+¥2.0 billion (–¥2.0 billion)

0

2008

Source: IEA, June 2011

Crude oil price stands at a highlevel, and appreciation of theyen continues.

Crude oil prices increase (decrease) by $1/bbl:

Comparison with Major Independent Upstream Companies

Proved reserves, net production volume and the market value of the major upstream players

Crude oil price trend

ICE Brent
Source: Petroleum Association of Japan (PAJ), etc.

(U.S.$/bbl)
150
120
90
60

High level($90–$100 or higher)

30
0

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Exchange rate trend (Japanese yen against U.S. dollar)
Source: Mizuho Corporate Bank

(Yen/U.S.$)
140
130

Appreciation of
yen continues

120
110
100
90
0

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Proved reserves and production volume indicated in this chart are from documents disclosed by the major upstream companies.
The size of circle shows market value of each company as of April 15, 2011.

Occidental (US)

1,000

800

BG (UK)To achieve 800,000–1 million
boed in net production by 2020
through commercialization oflarge-scale LNG projects, etc.

Anadarko (US)600

Talisman (CA)PTTEP (Thailand)423
thousand boed

Greater energy demand in the worldis expected especially in emerging
economies such as China and India.
According to the World Energy Outlook
announced by the International
Energy Agency (IEA) in June 2011, it ispredicted that global energy demand in2035 will increase by approximately 1.4
times compared to 2008 and that oil andnatural gas will account for more thanhalf of all energy sources.

2% annual increase is also forecast for
natural gas. The ratio of natural gas
within total energy demand is forecast
to overtake coal by 2030 and toincrease to more than 25% by 2035 (IEA
Outlook).
Other factors significantly
contributing to increased demand

Net production volume (Thousand boed)

Global energy demand isforecast to increase evenmore, particularly in emerging
economies.

Fluctuation of consolidated net income for the year ending March 31, 2012:

Business Overview

Global energy demand is forecast to increase even more, particularly in emerging
economies. Natural gas is attracting particular attention as an important fossil fuel thatprovides energy with a low environmental impact. Accordingly, demand is expected
to rise more quickly than that for other forms of fuel, such as coal and oil. Meanwhile,
crude oil price stands at a high level, and appreciation of the yen continues.

400(Present)

Santos (AU)Probable reserves to shift
to proved by FID oflarge-scale LNG projects, etc.

200

Woodside (AU)0

Our netproduction
volumeOur proved
and probablereserves

Apache (US)Seeking to establish
a firm position as a
global independent
upstream company
by 2020

1.0

Proved reserves: 1.31 billion boe

2.0

3.0

4.0

Probable reserves: 2.82 billion boe
Proved reserves (Billion boe)

INPEX CORPORATION Annual Report 2011031

Strengths and Strategies
INPEX seeks to improve sustainable corporate value while fulﬁlling our social responsibility
to supply energy stably and efﬁciently. We will enhance our four strengths and advance ourbusiness based on three medium- to long-term fundamental strategies. By 2020, our goal is toincrease our net production volume to 800,000–1 million boed and establish a ﬁrm position asa global independent E&P company following the oil majors.
While the upstream business is our core business, we will establish a gas supply chain andintend to evolve into a company that supplies diversiﬁed energy.

Three Medium- to Long-Term Fundamental Strategies

1. Strong Reserve /Resource Base
Reserves and resources, which are thesource of corporate value, are the criticalfactor in the oil and natural gas E&P
business. INPEX has the largest proved
and probable reserves of 4.13 billion boeof any Japanese company. Our reservesto-production ratio is 8.5 years for proved
reserves, 26.7 years if probable reserves
are added. Beyond our probable reserves,
we also have an abundance of possible
reserves and contingent resources. We
expect to continue increasing proved andprobable reserves over the medium tolong term.
p. 36 for details.

2. A Large-scale LNG Project
Operator
INPEX is in the process of developing
two of the world-leading in scale LNG
projects at Ichthys in Australia and Abadi
in Indonesia. We are the ﬁrst Japanesecompany to develop such large-scale
projects as an operator. The expected
production volume from both projects isvast, being equivalent to more than 15%
of Japan’s current LNG annual import
volume. We are focusing on these priority
projects, which contribute to the stablesupply of LNG and increase the corporate
value of our company.
pp. 40 – 45 for details.

3. Gas Supply Chain
INPEX owns a domestic natural gas pipeline
network stretching approximately 1,400 km
that connects domestic and overseas gas
assets to the Japanese gas market. We plan
to add value by establishing a gas supply
chain through linkage between this networkand our major LNG projects. Speciﬁcally,
our construction of Naoetsu LNG Receiving
Terminal which commenced in July 2009,is moving right along with the terminal
scheduled to enter operation in 2014.

4. Strong Financial Position
A strong, healthy balance sheet andplentiful cash reserves are essential
for oil and gas E&P companies. This
reﬂects both the high degree of risk
associated with these activities and theneed to have sufﬁcient funds on handto take advantage of major investment
opportunities quickly as they arise. As aresult of a public offering held in August
2010, our company has secured a strong
ﬁnancial position. As of March 31, 2011,
our company had an equity ratio of 74.5%
and the ratio of net debt to net total
capital employed was –48.9%. (Cash andcash equivalents and public bonds weregreater than interest-bearing debt)
Compared with the oil majors and otherinternational peers, this represents asound level of ﬁnancial strength.
p. 34 for details.

p. 62 for details.

[Fundamental strategy 1]
Sustainable Growth of
E&P Activities
We give top priority to the large-scale
LNG projects in Ichthys and Abadi, as
well as to other existing large-scale
projects. For new projects, we conduct
exploration activities mainly in focusedregions that are predicted to have large
reserves. We also seek to acquire assets
both directly and/or indirectly throughM&A activity.
We are also working to acquire
promising interests by developing
unconventional hydrocarbon resources
such as oil sands and enhancing
advanced technology for oil recovery
techniques. For existing projects whichhave entered the later production
phase and their proﬁtability is expected
to decline, we will improve our asset

portfolio quality by selling off, etc., andexpand our balanced portfolio.

[Fundamental strategy 2]
Establishment of a Gas Supply
Chain and Proactive Expansionof the Gas Business
To respond to the domestic demand
for natural gas, we construct an LNG
receiving terminal that organically links
domestic/overseas natural gas resources
to the domestic market. We will also
work to expand our existing pipeline
network.
Furthermore, to expand ourdomestic gas business, we will develop
new gas demand and seek cooperation
with domestic gas energy companies.
Moreover, we will consider participatingin overseas LNG receiving terminal andtransportation activities required for thedomestic/overseas gas trading business.

[Fundamental strategy 3]
Evolution into a Company
that Offers Diversiﬁed Forms
of Energy
We seek to create new added value by
developing and supplying a variety ofenergy forms that include the reductionof environmental impact and renewableenergy.

Strong Reserve/Resource Base

Large-scale
LNG Project Operator

Gas Supply Chain

Strong Financial Position

4.13 billion boe

Ichthys Abadi

Domestic gas
pipeline network

Equity ratio: 74.5%

1,400 kmemployed: -48.9%(Indonesia)

Long-term
production outlook:Three Fundamental Strategies for Growth (Medium to Long Term)

Four Strengths (Current)(Australia)

Through our four strengths
and three fundamental
strategies, we will seek toreach net production of
800,000–1 million boedby 2020.

800,0001 million boed

Our Strengths and Medium- to Long-Term Strategies to Expand Net Production Volume(Proved and probable reserves)

In terms of environmental issues,
we actively work to enhance energy
efﬁciency and reduce carbon dioxide
emissions by employing methods such
as CCS (carbon dioxide capture andstorage).
In the ﬁeld of renewable energy,
we will utilize alliances and business
partnerships with domestic/global
energy companies in order to develop
forward-looking technologies insuch areas as gas-to-liquids (GTLs).
Furthermore, from a medium- to longterm perspective, we will seek businessparticipation in renewable energy
including solar power generation,
geothermal power and storage batteries.

Business Overview

INPEX’s Four Strengths

By implementing three medium- tolong-term fundamental strategies while
utilizing our four strengths, our company
seeks to achieve a ﬁrm position among
the global independent E&P companies
by increasing our production volume
to 800,000–1 million boed. While theupstream business is our core business,
we will establish a gas supply chain andintend to evolve into a company that
supplies diversiﬁed energy.

Sustainable growth of
E&P activities

Net debt/Net total capital

Establishment of a gas
supply chain and proactive
expansion of the gas
business

Evolution into a company
that offers diversified
forms of energyNewprojects

Commercialization of existing projects

Solidify our position
among the top groupof independent
upstream companies
with well-balanced
capital, financial andpersonnel resources

Ichthys LNG Project (Plan to start production in Q4 2016) / Abadi LNG Project, etc.

Existing
projects(Years to March 31)

Trend innet
production
volume(around700,000 boed(expected))

380

418

423

405

405

2006

20 07

2008

2009

2 010

(Thousand boed)

423

417

440

450

446

435

2011

2 012

2 013

2 014

2 015

2 016

(Actual)2020

Note: The forecasts for net production for the years ending March 31, 2012 to 2016, are premised upon the same oil price (Brent crude at $95/barrel) as that used in forecasting the results for that year.
The production volume of crude oil and natural gas under the production sharing contracts entered into by the INPEX Group corresponds to the net economic take of our group.

032

INPEX CORPORATION Annual Report 2011

INPEX CORPORATION Annual Report 2011033

Equity

Cash Flow

Bank Loans

Proceeds from public offering(approx. ¥520 billion)(in August 2010)

Operating cash flow
Cash and cash
equivalents on hand

Lending from JBIC
Guarantee from JOGMEC
Project finance

Maintain strong
financial position● Maintain financial strength even at the peak in borrowing
Maintain funding capability to ensure necessary investments● Long–term financial target
Equity ratio : 50% or higher
Net debt/Net total capital employed: 20% or lessApprox.

(¥ billion)

Investment Plan

¥1.8 trillion

788.0

800

From the year ended March 31, 2011
to the year ending March 31, 2017.

630.0

600

Approx. ¥4 trillion

April 2011- March 2014:
400

737.0

366.0
240.7

275.0

200

Development expenditures
Exploration expenditures
Other expenditures*

187.0
54.0
37.0

32.5
21.2

0

2011

2012

36.0
26.0
2013

24.0
27.0

Project Overview
3.1

Reserves, Production and Investment Plan

036

3.2

Project Overview

038

3.3

Special Report 1: Ichthys LNG Project

040

3.4

Special Report 2: Abadi LNG Project

044

3.5

Project Overview by Region

046

Asia & Oceania / Eurasia / Middle East & Africa / Americas / Japan* Mainly for the Naoetsu LNG Receiving Terminal
and domestic pipeline and related facilities

2014

ActualEquity ratio

Net debt /Net total capital employed
Equity ratio

120 (%)Net debt/Net total capital employed
30 (%)

Long-term target:
20% or less

15
90

71.9%
64.0% 64.0%

74.5%

0

68.9%

60

-15

Long-term target:
50% or higher

Corporate Responsibility
and Management(Years to
March 31)

Approx. ¥1.8 trillion

568.0

Crew at ADMA Block, UAE

Business Overview

3

Investment plan and funding sources of approx. ¥4 trillion▲▲

Our company’s objective for corporate
growth is to raise production to 800,000–
1 million boed by 2020. To achieve thisgoal, it is necessary to invest in existing
projects such as the Ichthys and Abadi
Projects, as well as new projects which
will increase our reserves in the future.
In our investment plan,
approximately ¥4 trillion will be requiredfor development and exploration
activities including the Ichthys Project
during the seven-year period from theyear ended March 31, 2011 to the year
ending March 31, 2017.
It is important for us to maintaina strong balance sheet and achieve
ﬁnancial stability in order to makecontinuous investments in potential
projects while also maintaining thefunding capability to ensure necessary
investments for our major LNG projects.
To achieve ﬁnancial stability, we set along-term target for ﬁnancial leverage,that is, an equity ratio of 50% or higher
and a net debt to net total capital
employed ratio of 20% or less.
To implement our ¥4 trillion
investment plan, while considering
the ﬁnancial target, we envisage thefollowing three funding sources:
1) proceeds from a public offering,2) cash and other liquid investments on
hand and3) bank loans including project ﬁnancing.
We completed a public offering inAugust 2010 and succeeded in raising
approximately ¥520 billion. Now weplan to procure funding through bankloans including project ﬁnance taking
into account our ﬁnancial target, ona ﬁnancial base that has been further
strengthened by the public offering.

Project Overview

To ensure further growth, we plan to invest approximately ¥4 trillion over seven years
from the year ended March 31, 2011, to the year ending March 31, 2017. While achieving
ﬁnancial stability, we will make appropriate investments through optimal funding sources.

Performance / Message

Investment Plans and Financial Strategies-18.6%-31.2% -30.6%-30-36.1%-45-48.9%
-60

0

2007

2008

2009

2010

2011

2007

2008

(Years ended March 31)

2009

2010

2011

(Years ended March 31)

Credit rating information (As of June 30, 2011)
Long-term credit ratings
Short-term credit ratings

034

INPEX CORPORATION Annual Report 2011

Standard & Poor’s

A (negative)

Rating and Investment Information

AA- (stable)

Standard & Poor’s

A-1

Financial /Corporate Information30