Company Overview

Financial Information
Net Sales

Company Name: INPEX CORPORATION(million yen)

Established: April 3, 2006

1,500,000

Capital: ¥30 billion

1,202,965

1,076,164

840,427

2008

2009

1,000,000

Head Office: Akasaka Biz Tower 31st to 34th floors, 5-3-1 Akasaka,
Minato-ku, Tokyo, JAPAN 107-6332
Phone: +81-3-5572-0200

500,000
0

Fiscal Year End: March 31

2007

(FY)

Net Income

Main Businesses: Research, exploration, development, production, andsales of oil, natural gas, and other mineral resources;
other related businesses; and investment andlending to companies engaged in these activities(million yen)

173,245

180,000

145,062

107,210120,000
60,000
0

2007

2008

2009

(FY)

List of Projects

Minami Nagaoka
Gas Field

Offshore Mahakam Block

Abadi Gas Field
ACG Oil Fields
Kashagan Oil Field

ADMA Block

Ichthys Gas andCondensate Field

West Bakr Block

Editorial Policy
The INPEX Group publishes its CSR Report annually to keep its
stakeholders informed of its CSR initiatives and activities.
For the 2010 edition of this report, we formulated the editorial
policy below in light of our continued effort to incorporate thefollowing ideas from the 2009 edition: to enhance the disclosureof information on the issues and initiatives we face as a global
company doing business outside Japan, to enhance thedisclosure of environmental performance data for overseas
projects, and to use our website more effectively to complement
the printed report.
1. We will express a long-term vision for the INPEX Group as
an integrated energy company.
2. We will report on the interactive communication which wehave engaged in with our stakeholders to define key CSR
issues.
3. We will disclose CSR issues that emerge in our businessactivities and clarify those issues as they relate to ourstakeholders.
4. We will improve the content of the report so that it fulfills
our accountability.

5. We will report on significant CSR activities in this reportand post others on our website along with environmental
performance data compiled at project sites in Japan andoverseas.

Scope of Reporting, Data Compilation, and Reference Guidelines
INPEX CORPORATION and its 54 consolidated subsidiaries.
Environmental performance data for the Group’s Japanese operations
published in this report are a compilation of data from the company’s
Domestic Project Division, Pipeline Construction Division, LNG
Receiving Terminal Construction Division, Teiseki Pipeline Co., Ltd., andTeiseki Topping Plant Co., Ltd.; 50% of performance results of Offshore
Iwaki Petroleum Co., Ltd. were added to the total, in proportion to thecompany’s ownership of a working interest.
Environmental performance data for the Group’s overseas operations
published on pages 20–21 of this report as well as on its website are acompilation of data from Gas Guarico, S.A., West Bakr Petroleum Co.,INPEX Masela, Ltd., INPEX Browse, Ltd., INPEX Libya, Ltd., Teikoku Oil
Libya UK Ltd., PT Moruy ll, S.A., and Teikoku Oil (Suriname) Co., Ltd.
The Company’s Domestic Project Division and Offshore Iwaki
Petroleum Co., Ltd. participate in the program to reduce greenhouse

CONTENTS
Net Production by Region
Americas5%Middle East and Africa
33%

Total

405

1

thousand BOEPD

Japan
7%
Asia and Oceania
48%

Eurasia7%

Top Management Commitment
Mission, Corporate Social Responsibility Policy and Code of Conduct
Relationships with Major Stakeholders

Proved Reserves by Region 2
Americas3%
Middle East and Africa
43%

Japan
9%
Total

1,475

MMBOE 3

Asia and Oceania
32%

Eurasia14%

Corporate GovernanceCompliance
HSE Management System
Corporate HSE Objectives

1. Barrels of oil equivalent per day
2. Proved reserves are evaluated in accordance with SEC regulations and do not include reserves not
eligible for third-party deposit evaluation reports, nor those undergoing related governmental
approval processes, but do include proved reserves owned by equity method affiliates
3. Million barrels of oil equivalentSpecial Feature 1

What Kind of CSR Should
the INPEX Group Undertake?
Messages from experts from various fields

Special Feature 2

Copa Macoya Block

Environment

CSR Issues in Our Business Operations
and Consideration for Our Stakeholders

Environmental Impact Resulting from Our Business Activities
Preventive Measures against Global Warming
Development of Technologies to Reduce Environmental Impact
Pollution Prevention
Resource Saving

gas emissions called for by Keidanren Voluntary Action Plan on theEnvironment. (Greenhouse gases emitted during the decarbonation
process at the Minami Nagaoka Gas Field are not included.)
The Company’s Domestic Project Division, Teiseki Pipeline Co., Ltd. andOffshore Iwaki Petroleum Co., Ltd. participate in the program to reduce
emissions of volatile organic compounds called for by the Japan
Natural Gas Association.
Data on freight volume was provided by the company’s Domestic
Project Division.
Reference guideline: Global Reporting Initiative’s Sustainability
Reporting Guidelines 2006

Reporting Period

Society

Conserving Biodiversity
Exploration, development, and production
projects undertaken by the INPEX Group’s
consolidated subsidiaries and equity
method affiliated companies

Ensuring Operational Safety
Emergency Response System
Employee Health Management
Human Resources Management
Improving Natural Gas Supply Systems
Improving Product Safety and Services
Fair Trade
Information Disclosure
Community Support
Donations and Sponsorship

April 1, 2009, to March 31, 2010 (This report may containreferences to activities we undertook during or after April 2010.)
Forward-Looking Statements
This report includes forward-looking information that reflects the plans and estimates of INPEXCORPORATION and its affiliates (hereinafter called the INPEX Group). Such forward-looking
information is based on assumptions and beliefs of the INPEX Group in light of information
currently available, and involves known and unknown risks, uncertainties, and other factors. Suchrisks, uncertainties, and other factors may cause the INPEX Group’s actual results, performance,
achievements, or financial position to be materially different from any future results, performance,
achievements, or financial position expressed or implied by such forward-looking information.
Please be advised that the INPEX Group shall assume no responsibility for such risks.

CSR & Environment Online 2010: Table of Contents
Third Party Comments

Top Management Commitment
The INPEX Group will contribute to the creation of
affluent societies by realizing stable and efficient
supplies of energy

Global Energy Situation

Toshiaki Kitamura
Representative Director, President
INPEX CORPORATION

It is predicted that the global demand for energy willcontinue to increase in the future with emerging
economies, such as China and India as the driving
force. According to projections by the International
Energy Agency (IEA) and other organizations, it isthought that the demand for oil and natural gas willcontinue to grow in the future as the core energy
sources, supporting the economic growth of emerging
countries and developing nations. On the other hand,
it was agreed at the L’Aquila Summit of July 2009 to
reduce greenhouse gas emissions by 80% fordeveloped nations and by half worldwide by 2050.
Based on the Copenhagen Accord of December 2009,
moreover, the main emitting countries clearly specified
their reduction targets by 2020. There is thus anincreasing awareness of initiatives aimed at tacklingclimate change on a global level. In that backdrop, themodern world requires ongoing efforts to holisticallytackle economic growth and energy security, and torespond to climate change.
Given the view that the demand for oil and natural
gas will continue to increase, it will be necessary tocontinue to accumulate recoverable reserves in orderto maintain and develop a stable supply of energy. If
we include reserves expected to become recoverable
due to the application of new technologies, thereserve-to-production ratio of oil and natural gas isconsidered to be close to 80 years. It is thought thatthe shift from developing the regions to date, where
recovery was comparatively easy, to regions where
recovery is difficult, such as hadal zones and polar
regions, will incur greater costs than in the past andrequire consideration for safer operations. Additionally,
emerging consumer economies, such as China andIndia, are actively working on obtaining oil and natural
gas assets overseas, and with the rise of nationalism
over resources in countries such as Russia and
Venezuela, as well as increasing national control ofresources, competition over resource acquisition isheating up.

Long-Term Prospects as an Integrated
Energy Company
Develop business while aiming for harmony
with global environment and local communities
The Mission of the INPEX Group is to contribute towardbuilding more livable and prosperous communities by
providing a stable and efficient supply of energy, primarily
by exploring and developing oil and natural gas resources.
The long-term growth of the Group through energy
development and supply can only be realized once
operational regions and consuming nations achievesustainable development. We, therefore, believe it is oursocial responsibility to proceed with our business while
maintaining a close dialogue with our diverse stakeholders
in regions where we are active and aiming to achieve
harmony with the global environment and local
communities.

Realize our Mission via three strategies
By adopting the foregoing basic approach, we believe wecan contribute to creating a sustainable society specificallyby promoting three strategies: (1) to continue to expand
the oil and gas upstream business; (2) to establish a natural
gas supply chain and diversify the gas business; and (3) tobecome a company that offers a broader range of energy.
For the time being, fossil energy is positioned as theprimary energy source supporting the global social
economy. In order to meet the sizeable demand for thisenergy, the INPEX Group is prioritizing continued
expansion of its upstream business aimed at maintaining
and increasing its oil and natural gas reserves andproduction, and is expanding into 26 countries worldwide
and developing over 75 projects (as of June 30, 2010).
As well, we are establishing a gas supply chain anddiversifying our gas business. In Japan, the INPEX Group is
currently proceeding with the construction of the Naoetsu
LNG Receiving Terminal in Joetsu City, Niigata Prefecture,
while overseas the Group is implementing the large-scale
LNG projects “Ichthys” and “Abadi” that focus on natural gas.
By supplying the Group’s overseas LNG through theJapanese natural gas supply infrastructure, we will
strengthen the stability and flexibility of the natural gas

supply structure and contribute toward promoting the useof natural gas, a clean form of energy that emits a relatively
low volume of CO2 when burned.
Furthermore, the INPEX Group is pursuing opportunities
to enter the market and commercialize technologies for
supplying renewable energy as well as for expanding theuse of such energy, including storage and fuel cells. In the
future, we will strive to further reduce the impact on theenvironment by becoming a company that offers a broader
range of energy.

Toward Commencing Large-Scale
Operator Projects
The INPEX Group is developing “Ichthys” and “Abadi,” two of
the world’s largest-scale LNG projects, the first effort by aJapanese company to act as an operator. In order toproceed with large-scale operator projects, it is necessary
to open dialogues not with only oil and gas producing
countries but also with more stakeholders than up to now.
I believe that, winning the trust of local communities bymaintaining close communication with the residents andcontributing to their development, including considering
the environmental and safety aspects of our operations,creating employment opportunities and improving living
conditions, are conditions that lead to the success of a
project. In addition to providing a major competitive edgethat will stimulate the growth of the INPEX Group, these
two large-scale LNG projects will contribute to the stablesupply of energy and to reducing the global environmental
impact. We are focusing all of our energy on commencing
production as soon as possible.
In striving to become a leading independent company,at what might be called the “semi-major” level, a wider
vision and higher ethical standard in business will be
required. As it develops its businesses from a long-term
perspective and contributes to a sustainable society as anintegrated energy company, the INPEX Group will strive tofoster world-class human resources constantly aware of“demonstrating a sense of ethics,” “giving highest priority tosafety and environmental preservation in operations,” and“contributing to the communities where we operate.”

Mission, Corporate Social Responsibility Policy and Code of Conduct

Mission, Corporate Social Responsibility Policy and Code of Conduct

We play an active role in supporting the sustainable
development of society, as affirmed in our Mission andCorporate Social Responsibility Policy

Upon the merger of INPEX CORPORATION and Teikoku Oil Co.,
Ltd., the INPEX Group formulated a new Mission, Corporate Social
Responsibility Policy, and Code of Conduct. Our Mission reflects
our objective of playing an active role in social development, theCorporate Social Responsibility Policy directs our CSR initiatives

and reaffirms our commitment to promoting them, and the Codeof Conduct describes how every officer and employee of theGroup should perform ethically on a daily basis.
Visit our website for the complete text of the Code of Conduct

http://www.inpex.co.jp/english/csr/

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

Corporate Social Responsibility Policy
The INPEX Group conducts business efficiently and proactively with a long-term perspective. Guided by the leadership of top
management, we are committed to fulfilling our corporate social responsibilities. Our key principles include:

1 Deliver energy in a stable and efficient manner.
2 Comply with laws, rules and regulations and adhere to
ethical business conduct.

3

Communicate timely and openly with shareholders,
employees, customers, business partners and otherstakeholders.

4 Value the individuality of employees, secure a safe, healthy
and worker-friendly environment, and provide
opportunities for career development.

5 Recognize our responsibility to help preserve theenvironment and contribute to sustainable development.

6 Contribute to the development of host countries andcommunities, based on the understanding of cultural
diversity.

Code of Conduct
Every officer and employee of the Group fully understands and strictly follows the articles of this code of conduct to achieve
appropriate management and fulfill its responsibilities as a decent member of society.

1 Compliance with Laws and Ordinances
2 Respect for Human Rights
3 Contributions to Society
4 Respect for Business Ethics

5 Respect for Employees
6 Approach to the Environment, Safety and Health
7 Securing the Soundness of Company Assets and FinancesRelationships with Major Stakeholders

We engage in our business operations with a variety
of stakeholders

associated with our business. We thus engage in businessactivities while maintaining various relationships withstakeholders.

Relationships with Stakeholders

Customers

We strive to provide safe, reliable, andhigh-quality products and services to ourcustomers and contribute to theirsustainable development.

Shareholders
andInvestors

Suppliers

To engage in fair and impartial trading with all of ourbusiness partners, we aim to make them totallyknowledgeable about our compliance system andseek to develop relationships with them in which we
can work together to build a sustainable society.

INPEX

Local
Communities,

We strive to increase our corporate value by
engaging in highly transparent information
disclosure while securing stable supplies ofenergy to respond to the expectations of ourshareholders and investors.

Oil and Gas
ProducingCountries

NPOs and NGOs

To coexist with local communities as a good
corporate citizen, we actively engage in various
dialogues with communities, NPOs, and NGOsso that social values are incorporated into ourmanagement practices.

Employees

To maintain favorable relations with thelocal communities in oil and gas producing
countries where we operate, we strive toprovide them with diversified support andseek mutual understanding.

To create an organization that is highly
competitive in the international arena, we arebuilding foundations that enable our employees
to exercise their abilities to the fullest anddeveloping human resources who can contributeto our global development.

Relationships with Major Stakeholders

We are committed to providing society with a stable andefficient supply of energy in an environmentally friendly
manner. To fulfill this commitment, we find it imperative towork closely with stakeholders directly or indirectlyWe spare no effort to enhance corporate governance inorder to maintain greater management efficiency andsoundness

Overview of Our Corporate Governance
At INPEX CORPORATION, the Board of Directors meets once amonth or as needed to review and make decisions for
implementing important business operations and to oversee
the directors’ execution of their duties. The Board of Directors iscomprised of 16 members, of whom four are external
directors—management professionals with long years ofexperience and knowledge concerning our operations. These
directors are appointed by INPEX CORPORATION to provide
their expert opinions on and objective insights into the
management of our operations and are expected to contributeto the development of the company. All of the external
directors serve concurrently as managing directors of operatingcompanies that own stock in the INPEX Group. Since theoperating companies are engaged in the same fields ofbusiness as INPEX, all members of the Board, including external
directors sign and submit pledges concerning appropriate
handling of non-competition clauses and conflict of interest
transactions in accordance with the Companies Act as well as
the prevention of information leakage.
In addition, we hold a Management Committee meeting
once a week, or more often if required, to facilitate flexible
decision-making on matters not subject to the approval of theBoard of Directors. We established the Executive Officer System
on October 1, 2008, moreover, to make the management
structure more flexible and efficient.
Corporate Governance Structure
Shareholders Meeting
Appoint/dismiss

Independent
Auditors

Appoint/dismiss

Appoint/dismiss

Audit
Coordination Board of Statutory Auditors
5 statutory auditors,
Coordination
including 4 external
statutory auditors

Board of Directors
16 directors, including
4 external directors

Accounting audit
Accounting audit

Coordination

Corporate GovernanceCorporate
Governance

Audit

Appoint/
supervise/
Appoint
dismiss

Management Committee
Representative Director, President
ReportInternal

Internal audit
Audit Unit

Corporate Officers

10 directors and corporate officers
24 corporate officers Total: 34 corporate officers
Divisions and subsidiaries

Compliance
Committee

A statutory auditor system is also in place with the Board of
Statutory Auditors composed of five statutory auditors, four ofwhom are external auditors. Under this system , statutory
auditors attend meetings of the Board of Directors as well as
the Management Committee, and hold interviews with andrequest reports from relevant divisions as needed. They are
responsible for auditing the directors’ execution of their duties
in day-to-day operations and individual projects. They also
receive reports from the independent auditors on regular andirregular audits and, as needed, reports from the Internal Audit
Unit on the state of internal audits. The four external auditors
are chosen for their wealth of experience and knowledge inthe E&P business, finance, and accounting, which they put touse in their auditing duties for INPEX.
We also have an Internal Audit Unit with 12 full-timemembers, independent of our business divisions and reporting
directly to the president to ensure the appropriateness andefficiency of business activities. The unit reviews and evaluates
the status of management entities and the efficiency ofbusiness operations, identifies problem areas, submits reports
to management, and performs follow-up audits to ensure
continuous improvements. The unit also consults with theindependent and statutory auditors in a timely manner toensure sound management.

Internal Control System
In accordance with the internal control reporting systemmandated by the Financial Instruments and Exchange Act
enacted in April 2008, we have been assessing theestablishment and operation of internal control systems forfinancial reporting in all INPEX Group companies. For thisassessment we assembled a Special Assessment Team within
the Internal Audit Unit to request improvements from thosedivisions where problems with control systems were detected
and to assess the progress of those improvements. As a resultof this assessment, which was concluded at the end of March
2010, we determined that the internal control systems forfinancial reporting were functioning effectively, and thesefindings were submitted to the pertinent regulatory agency inJune 2010 as an internal control report. We also received an
unqualified opinion from an independent auditor regarding
our internal control report.

Compliance

We ensure that every employee adheres to highstandards of ethical conduct, so as to continue to earn
the trust of society

In April 2006, we formed the Compliance Committee to ensure
consistency in compliance throughout the Group, and to
manage the implementation of compliance practices. The
Committee also works with the statutory auditors, Board of
Statutory Auditors, independent auditors, and Internal Audit
Unit to (1) develop and implement compliance programs; (2)monitor their implementation; (3) raise employees awareness ofcompliance policy and procedures; (4) receive reports on andinvestigate cases of noncompliance; (5) issue warnings and takemeasures to end any noncompliant conduct; and (6) establish
measures to prevent recurrence of noncompliant conduct.
Based on the recognition that compliance is indispensable tosecuring the long-term continuity of the company and that itserves as the foundation for our business activities, we distribute
the Compliance Manual and Compliance FAQs to all INPEX Group
employees with the aim that they will put compliance into
practice. These documents help to cultivate an awareness ofcompliance throughout the entire Group by explaining theGroup’s Mission and Corporate Social Responsibility Policy,
providing an overview of the compliance system, outlining theCode of Conduct, and introducing a number of case studies as
examples of compliance practices.
Compliance System
Board of Directors
Appoint

ReportCompliance Committee
Director in charge of compliance (Committee Chairperson):
Masatoshi Sugioka (Representative Director, Vice Chairman)
Compliance Committee members (Head of business divisions)
ReportGeneral Administration Unit
External consultation Anonymize(Lawyer)
In-house consultation Department in charge of compliance
Report/consult

Report/consult
Officers and employees

Compliance Training
In December 2009, one year after the merger of INPEXCORPORATION and Teikoku Oil Co., Ltd., we conducted acompliance questionnaire among all Group officers andemployees in an effort to further spread compliance awarenessHelp-Line System
In April 2006, we established the Help-Line System for Group
officers and employees in accordance with the Whistle-blowers
Protection Act.
To operate this system, we devised Help-Line Procedures
which outline stipulations on the mandatory reporting of fraud
or unethical conduct, fact-finding procedures, protection ofwhistle-blowers, and confidentiality. Confidential reports are
submitted to the department in charge of compliance (theGeneral Administration Unit) or an external expert designatedby the Compliance Committee. When the latter receives a
confidential report, it is shared with the former in a timely
manner. Our officers and employees can report unethicalbehavior anonymously and are rigorously protected against
retaliatory action for filing such reports. There was no reportingof fraud or unethical conduct in fiscal 2009.

Measures to Improve Information
Security Management
To fulfill our social obligation and remain a trusted company,
we continually raise the level of information security.
Based on the Basic Policy for Information Security that weformulated in October 2008, we established a Group-widesystem for information security administration, preparedregulations pertaining to information security, and bolstered
our information security infrastructure. In fiscal 2010, we arefocusing our energy on proactive information security
training and awareness-raising efforts to ensure that thepractice of carefully managing information assets is firmly
established in our corporate culture.

Compliance

Compliance Policy and Systemthrough the entire Group. Since March 2010, we haveconducted 16 compliance training sessions with officers andemployees across Japan. In these sessions, we explained theissues and areas for improvement that were identified throughthe survey, and reconfirmed our basic stance on compliance,
touching on the Group’s Mission, Corporate Social
Responsibility Policy, and various case studies. Sessions primarily
focused on raising awareness of information security in routine
tasks and on human rights education regarding various types ofharassment. Many officers and employees participated in the
training sessions, including Japanese employees stationed inoverseas offices who utilized a TV conference system, thus
contributing to raising compliance awareness in the company.

HSE Management System

HSE
Management
SystemThe INPEX Group promotes HSE Management as one ofits health, safety and environmental initiatives

Message from Director in charge of HSE

Masatoshi Sugioka
Representative Director,
Vice Chairman in charge of HSE

The INPEX Group strives to become an integrated E&P
company committed to contributing to the developmentof society, a good corporate citizen that upholds highbusiness ethics and has a corporate culture that places
ensuring safety and environmental integrity at the top of
its agenda. We are also committed to following rules andstandards prevailing in the international community when
conducting our business on a global basis to secure andprovide a stable supply of energy for our customers. There
are also strong demands to globalize our corporate culture.
In December 2007, we developed the HSE Management
System Manual to carry out integrated health, safety andenvironmental activities based on internationallyrecognized standards.
Our HSE Management System aims to ensure continuous

improvement based on the PDCA1 management cycle that
ranges from setting goals for each fiscal year to devisingand implementing plans for achieving them through toreviewing and assessing their performance. Our policy for
HSE Management is to use this system to define sharedGroup-wide goals at the corporate2 level for each fiscal
year. Based on these, the Operational Organizations
develop programs that reflect their unique situations. In
the review and assessment phase, we performed
corporate-level HSE audits on seven Operational
Organizations last fiscal year. The findings of these audits
were reported to the Corporate HSE Committee, and areas
for improvement were discussed.
We believe that the INPEX Group’s systems to support
HSE activities have started to take shape to some degree,
but in order to root these systems more firmly and makethem more effective, we intend to make every effort toensure that they permeate every corner of every
Operational Organization. We will continue to promote
HSE initiatives as we strive to become a company thatsociety trusts and deems truly indispensable.
1. Plan-Do-Check-Act
2. The INPEX Group’s HSE management system contains a framework for overseeing the entire
Group

Health, Safety and Environmental Policy of the INPEX GroupThe INPEX Group is a global, independent energy company and our vision is to provide a stable and efficient supply of energy
to our customers. We recognize our responsibility for sustainable development and, in this regard, we aim to protect thehealth and safety of all those associated with our business activities and to minimize adverse impacts on the environment.
To accomplish this, we will:
Comply with all applicable HSE laws and regulations, and apply
our standards where laws and regulations do not exist or are
considered insufficient.
Implement and maintain HSE management systems, andperform regular audits of legal compliance and progress of our
HSE activities to achieve continuous improvement in our HSE
performance.
Identify and assess health and safety hazards and eliminate or, if
not possible, reduce risks to as low as reasonably practicable toprevent incidents.
Conduct environmental assessments and promote efficientenergy consumption to reduce adverse environmental impacts.

Maintain and regularly test emergency plans to ensure a quick
and effective response in the event of emergencies.
Provide resources that will enable our employees to meet HSE
objectives and targets.
Provide training in HSE activities and safe driving to ensure all
employees are aware of their responsibilities and accountabilities
in these areas.
Require contractors to manage HSE in accordance with this Policy,
and to achieve agreed HSE targets.
Communicate openly on HSE activities with stakeholders.

Formulating HSE Procedures and Policies

The INPEX Group considers environmental preservation andthe prevention of incidents to be inseparable from each other.
Therefore, we continually enhance our HSE performance under
our in-house HSE Management System, which coordinates ourhealth (H), safety (S) and environmental (E) practices.
The HSE Management System encompasses a document
architecture that includes the HSE Policy, the HSE Management
System Manual, and sets of Corporate HSE Procedures andGuidelines. The organizational structure comprises HSE
Committees established at headquarters and in Operational
Organizations. HSE Objectives and action plans for HSE
Programs are devised each fiscal year.

In addition to the HSE Management System document
architecture, we have been continually formulating proceduresand policies since fiscal 2009 to supplement the HSE Management
System Regulations. The Operational Organizations continue todevelop and strengthen HSE Management in accordance with theregulations, procedures, and policies formulated at the corporate
level. All planned procedures were completed in fiscal 2009, andwe are currently drafting policies to support those procedures.

Initiatives for Promoting and
Implementing HSE Management System
The HSE Unit at headquarters is in charge of promoting the
INPEX Group’s HSE Management System. When necessary, HSE
Groups are organized for our Operational Organizations, theunits in charge of operator* projects. To promote systematicGroup-wide HSE initiatives, we established the Corporate HSE
Committee, which together with the HSE Committees in each
Operational Organization deliberates and approves Corporate
HSE Procedures and documentation and examines theimplementation of HSE Activity Plans, security management
methods, and HSE awareness-raising measures.
In February 2010, we held the HSE Annual Meeting withattendance by representatives of Operational Organizations
both in Japan and overseas. The representatives reported on
the progress of the HSE Management System and issues
concerning its implementation in their respective Operational
Organizations. By discussing these issues with senior
management, all parties reconfirmed the challenges faced in
implementing HSE measures along with the top priority
measures—such as securing personnel—required to further
promote HSE.
* A company that takes primary responsibility for exploration, development, and production
operations in a block

Framework for Implementing HSE Management System
Corporate HSE Committee

Toshiaki Kitamura(Representative Director,
President)

Masatoshi Sugioka(Representative Director,
Vice Chairman in charge of HSE)

Operational
Organization

Operational
Organization

Operational
Organization

Operational
Organization

Operational
Organization
Representative

Operational
Organization
Representative

Operational
Organization
Representative

Operational
Organization
Representative

HSE Committee

HSE Committee

HSE Committee

HSE Committee

HSE Auditing
In the past, each Operational Organization in Japan used its own
internal auditing system. Since fiscal 2008, however, HSE audits
have been conducted for all Operational Organizations both inJapan and overseas with the INPEX Group’s comprehensive HSE
audit. This audit is based on the HSE Management System andcovers areas such as routine safety management, environmental
management, and emergency protocol.
In the fiscal 2009 HSE audits, we found that the HSE
Management System made progress, with each of the Operational
Organizations strengthening their frameworks for contractor HSE
Management and providing HSE training. We also confirmed thatawareness of the significance of HSE was spreading among theworkplace employees. However, some insufficient documentation
and risk assessments were also identified during these audits. We
have created improvement action plans for each of these issues
and are promoting their implementation.

HSE Training and Awareness-Raising
Based on our HSE Objectives, we worked to enhance HSE training
programs in fiscal 2009. At the corporate level, we expanded ourprograms based on survey results, and a total of 790 employees
participated in 35 HSE training programs including seminars, grouptraining sessions, and e-learning sessions. Operational
Organizations in Japan and overseas also conducted training
programs on subjects such as operational safety, environmental
management, and emergency protocol in light of the needs ofeach workplace.
In November 2009, we conducted an HSE Awareness Survey
based on our HSE Objective of HSE awareness-raising. In an effort
to confirm the actual level of HSE awareness, the survey covered
all officers and employees in all our Operational Organizations
around the world and was implemented in Japanese, English,
Spanish, and Arabic. The response rate was 90% and the results
revealed issues with internal communications and resources. In
fiscal 2010, we plan to work on detailed programs to address theseissues in order to further raise awareness of HSE.

HSE Management System

Overview of HSE Management System

Corporate HSE Objectives
80%. Our level of achievement vis-à-vis the other objectives of“reducing environmental impact” and “improving health and safety
performance” was only around 60%. In fiscal 2011 and later, weintend to formulate a detailed HSE Medium-Term Plan and in fiscal
2010 we will draw up Corporate HSE Objectives and HSE programs
as part of our continuing efforts to ensure the steady
implementation of these objectives.

HSE Management System

In accordance with our HSE Objectives, Corporate and each
Operational Organization develop and implement HSE programs
each fiscal year. Continuing from fiscal 2008, we set four objectives
for fiscal 2009 and implemented relevant programs. Our level ofachievement for programs pertaining to management systems, i.e.,
programs relating to the objectives of “raising HSE awareness” and“establishing the HSE Management System,” was approximately

Corporate HSE Objectives and Programs for Fiscal Year from April 1, 2009 to March 31, 2010
Ratings

Implemented as planned in fiscal 2009 (100%)

Corporate HSE Objectives 1. Raise HSE awareness
HSE Programs
Action Items

Partially implemented in fiscal 2009, to be continued
in fiscal 2010 (less than 100%)

Not implemented in fiscal 2009, to be carried over tofiscal 2010 (0%)

Cultivate a corporate culture in accordance with our HSE Policy in which HSE is given top priority in the daily routines of all officers andemployees.

Frequency/
Program Period

Results

Results and Evaluation
Achievement Rating Performance Evaluation and Issues to be Resolved

1-1

Issue HSE reports to Board of Directors
and Management Committee

Once a month

Implemented as planned

100%

1-2

Issue regular reports to Board of Directors
and Management Committee on
indicators and analyses of environmental,
health, and labor activities

Once every
six months

Implemented as planned

100%

1-3

Conduct on-site inspections byRepresentative Director and Director
for HSE

Once a year foreach person

Joetsu district sites (LNG Receiving Terminal, TTP Kubiki Refinery,
TPC Gas Recovery Facility, Kashiwazaki Field Office) inspected

100%

1-4

Grant Corporate HSE Awards

Once a year

Ceremony held at headquarters. Kashiwazaki Field Office awarded
HSE Award for Excellence; employees of INPEX Browse Ltd. and TTP
Kubiki Refinery awarded HSE Activity Awards.

100%

1-5

Conduct HSE training sessions bycorporate management

Twice a year

Director in charge of HSE held “HSE Sessions” at Nagaoka Field
Office, TTP, and Kashiwazaki Field Office to raise awareness of HSE

100%

1-6

Confirm current state of HSE culture
by conducting HSE awareness survey
and analyzing results to contribute tofuture response

End ofDecember

An HSE awareness survey was conducted for officers andemployees in an effort to raise HSE awareness; results will beapplied to next year’s annual plan

100%

Develop HSE information sharing
systemYear-round

Plan to develop HSE information sharing system for Operational
Organizations partially implemented (sharing of each organization’s
HSE information through regular monthly reports)

50%

1-7

Corporate HSE Objectives 2. Establish HSE Management System
HSE Programs
Action Items
2-1

We raised awareness of HSE in FY2009
with HSE inspections, sessions, meetings,
and awards. The results of the HSE
Awareness Survey we conducted with all
officers and employees revealed thatthese activities have served to increaseawareness of HSE to some degree, butissues with internal communications andresources were also pointed out. We willaddress these issues in next fiscal year’s
programs to further raise awareness of
HSE. We also plan to conduct an HSE
Culture Survey in FY2010 to measure theextent to which HSE has rooted itself in
our corporate culture.

Continue organizing documentation stipulated in the HSE Management System Manual; communicate information and conduct
training on the content of those documents, and establish a system for planning, implementing, monitoring, and evaluating HSEMS.

Frequency/
Program Period

Results

Results and Evaluation
Achievement Rating Performance Evaluation and Issues to be Resolved

Discussion and approval of corporate HSEMS documents by HSE Committee
Corporate HSE Procedures for Asset
Integrity
Corporate HSE Policies (HSE
requirements for contractors, waste
management, HAZOP, etc.)

End of May

Guidelines for facilities soundness management formulated asplanned100%Year-round

Began formulating approximately 30 policies for security management,
health maintenance, and facilities soundness management inaccordance with the HSE Management Manual and procedures

50%

Once

Conducted audits of OIP, Ichthys, LNG Receiving Terminal
Construction Division, Libya, Masela, and Corporate HQ (Akasaka)

100%

2-2

Conduct HSE audit

2-3

Hold HSE Managers Meeting andAnnual HSE Meeting

Once each

Held Annual HSE Meeting with Operational Organizations’ chief
executives of HSE

100%

2-4

Formulate list of HSE tasks for entire
project lifecycle (roadmap model)

Once every
six months

Summarized HSE workflow from project launch to exploration,
development, and production through to abandonment; assessed
establishment and performance of HSEMS, and clarified issues forpractical application thereof (an HSEMS objective); formulated list oftasks to achieve this objective (using roadmap model)

100%

2-5

Collect HSE risk assessment data fromOperational Organizations and createcompany-wide HSE risk register

Once every
six months

Not implemented

0%

2-6

Inform Operational Organizations ofcorporate HSEMS documentation(information sessions)Three times
a yearHeld two HSE information sessions for Domestic Project Division

70%

2-7

Enhance HSE training programs

Year-round

Held 25 courses (six more than in FY2008) with 790 participants(27 more than in FY2008) for a total of 240 hours (72 more than in
FY2008). Expanded opportunities to provide necessary HSE
information and skills to levels beyond the previous fiscal year.

100%

We held HSE audits and Annual HSE
Meetings as scheduled for FY2009 andcompleted our roadmap model forstandardizing HSE workflow processes.
Our HSE training programs exceeded
levels of the previous fiscal year
thereby expanding opportunities toprovide necessary HSE informationand skills to our employees. We will
strive to further enhance programcontent in FY2010.
Meanwhile, we began formulating
HSE policies for our continuing HSE
documentation project, but we did
not sufficiently explain corporate
HSEMS documents to the Operational
Organizations.
Overall, the HSE Management
System is taking shape, but to assure
continued progress we will continue
formulating documents stipulated in
the HSE Management Manual in
FY2010, explaining them to ouremployees and undertaking measures
based on their content.

Corporate HSE Objectives 3. Reduce environmental impact
HSE Programs
Action Items
3-1

3-2

3-3

Results

Collect and analyze environmental
data

Year-roundContinued to collect and analyze various environmental impact data (emissions
volumes, waste volumes, energy consumption, energy utilization)

100%

Formulate data management system
specifications; develop and evaluate
prototypes

Year-round

Completed collecting information on a system for environmental
data collection/analysis/management and analyzing tasks but did
not fulfill plan 100% in specification writing phase50%

Defined scope for environmental management plan formulation with the aimof setting numerical targets during FY2010 at the corporate level. Did notcomplete detailed medium-term action plan, select indicators, or define targets

50%

Provide technical support toOperational Organizations
concerning environmental issues

Year-round

Provided support to Domestic Project Division for responding to the Law
Regarding the Rationalization of Energy Use, assisted in oil contamination
cleanup in Egypt, provided HSE support to Masela, and participated inregular environmental meetings in Japan to provide technical assistanceand advice to Operational Organizations concerning environmental issues

100%

Continue collecting and analyzing HSE-related data and monitoring the health and safety situation; define numerical targets for healthand safety indicators. In particular, while moving to achieve targets make strengthening measures to prevent human error a top priority.

Frequency/
Program Period

Results and Evaluation
Achievement Rating Performance Evaluation and Issues to be Resolved

Results

Continue collecting and analyzing
health and safety data

Year-roundContinued to collect and analyze various health and safety data

100%

Formulate data management system
specifications; develop and assess
prototypes

Year-round

Completed collecting information on a system for health andsafety data collection/analysis/management and analyzing tasks
but did not fulfill plan 100% in specification writing phase50%

Confirm achievement of targets by Operational Organizations of numerical health and safety indicators
End of March

Formulated medium-term goals such as striving to reach the average
OGP data values by 2020, but did not set specific numerical targets

70%

Provide support to Operational Organizations for measures to reduce human error (make prevention of human error a top priority and conduct the following activities)
Deliberate human error prevention inlight of FY2008 accident survey results

Once every
six months

Held training sessions on human error prevention, the first step in gaining
know-how in the human error prevention process; reexamined past accidents
and began analyzing underlying causes with human factor engineering

30%

Define methods to analyze underlying causesof accidents and support Operational
Organizations with those analyses

Once every
six months

Assisted Operational Organizations in analyzing underlying
causes of accidents by defining methods for said analyses

30%

4-4

Strengthen measures to prevent
traffic accidents

Once every
six months

Formulated corporate traffic safety guidelines; standards fordrivers, vehicles, and driving safety education not formulated

50%

4-5

Strengthen health maintenance measuresfor H1N1 virus and other health issues

Year-roundResponded appropriately to the outbreak of the H1N1 virus

100%

In FY2009 we strengthened healthmaintenance measures including thosefor the H1N1 virus and successfully
took appropriate action. We continued
to collect and analyze health and safety
data as per usual.
We used human factor engineering
to reexamine cases of accidents andincidents from FY2008 in order toanalyze underlying cause, support
Operational Organizations inunderlying cause analyses, andformulate traffic safety guidelines—all
initiatives we will continue into thenext fiscal year. We set health andsafety goals for FY2010 and will steadily
manage our numerical targets as we
strive for zero accidents.

Capital Expenditures for Environmental Control Projects and their Returns for Fiscal Year from April 1, 2009 to March 31, 2010
Investment Amount(thousand yen)

Sub-total Quantitative(thousand yen)
EffectDescription

Objectives

Investment Items

Mitigation of
global warming/
energy efficiency

Heat exchange tube sanitation to improve
thermal efficiency

NiigataGround flare installation to reduce direct
release of methane into atmosphereNiigata

Shinkuwayama Plant

22,670GHG emissions
reduced by
4,464t-CO2

Reduction of GHG emissions
by burning all dispersed gas

Installation of crude oil offloading units to
reduce VOC emissions

Niigata

Koshijihara/
Oyazawa plants

393,590

VOC emissions
reduced by 58.2t

Reduction of VOC emissions
when loading into tanker trucks

Replacement of catalysts in equipment forremoving VOC from exhaust gas

Niigata

Koshijihara Plant

Installation of devices to remove and absorb
benzene from dehumidifier vapor gases

NiigataMatsuzaki Plant No. 1

Installation of air environment monitoring
devices

Niigata

Naoetsu LNG Receiving
Terminal
Construction OfficeReplacement of absorbing agents in devices
for removing impurities from exhaust gas

NiigataOyazawa Plant

Installation of wastewater treatment device andoil-water separation pit to maintain water quality
Change in path of tubing carrying waste liquidin pure water neutralization waste liquid
treatment device for reduction in waste
Installation of portable soundproof walls toprevent noise

Niigata

Wells, Sekihara Plant, etc.

Niigata

Koshijihara Plant

Preservation of
air and water
environments

Waste treatment
and recycling
Reduction of noise,
vibration, and odors
Preservation ofnaturalenvironment/elimination ofpollution/
remediation

Location/Facility

New equipment Improvement/
renovation/
introduction maintenance

Teiseki Topping Plant
Kubiki Refinery

28,370

Restoration of capacity of VOC
removal catalysts

28,330450453,910

BTX emissions
reduced by 1.1t

Restoration of absorbing agent
capacity for removing impurities

13,420Management and conservation ofwater quality by improving drainage

11,8706,950

Sotoasahikawa Site

3,400

Collection and storage of seeds forgreenification

Niigata

Naoetsu LNG Receiving Terminal
Construction Office

11,400Installation of biopile soil remediation unit
for removing oil contamination

Niigata

Reduction of treated waste
6,950 Treated waste sludge
3

3,400

137,400

Riverside park outside Teiseki
Topping Plant Kubiki Refinery

126,000
449,630

Reduction of benzene, toluene,
xylene (BTX) emissions
Measurement of NOx, SOx, PM.
etc., in atmosphere

6,250

Akita

Total Investment (thousand yen)

Reduction of fuel consumption withimproved thermal efficiency furnaces

5,700

180,400

630,030

reduced by 180m

sludgeNoise level reducedby 6–17db

Reduction of noise from well
work
Collection of about 6.25ha worthof seeds and cultivation of plants

Approx. 9,000m3
of soil cleaned

Cleanup of oil-contaminatedsoil

HSE Management System

End of March

Select numerical health and safetytargets and deliberate indicators
4-3

We continued to collect and analyze
environmental impact data and provide support
for environmental activities.
We completed analyzing tasks for developing
a comprehensive data system to manage
HSE-related data, including environmental andsafety data, and will strive to complete the system
in FY2010. We devised a vision and scope forformulating an environmental management planfor corporate-level environmental indicators,
numerical targets, and a medium-term plan in
FY2010.
We will complete the establishment of ourdata management system next fiscal year andcontinue working on formulating ourenvironmental management plan, which wehave defined as an important issue.

Confirm achievement of numerical environmental indicator targets by Operational Organizations
Select numerical environmental
targets and deliberate indicators

HSE Programs
Action Items

4-2

Results and Evaluation
Achievement Rating Performance Evaluation and Issues to be Resolved

Frequency/
Program Period

Corporate HSE Objectives 4. Improve health and safety performance

4-1

Recognize that reducing our environmental impact is an important social responsibility, collect and analyze HSE-related data, continue tracking ourenvironmental impact, and define numerical targets for environmental indicators. Also strengthen measures to prevent environmental incidents.

Special
FeatureWhat Kind of CSR Should the INPEX Group Undertake?

1 Messages from experts from various fields

Special Feature 1

What kind of CSR should the INPEX Group undertake as we carry out our operations?
We discussed this question with our employees and external experts to seek out thepath we should take.

Future of CSR Activities
The mission of the INPEX Group is to provide astable and efficient supply of energy to customers
so as to contribute to the community, and make it
more livable and prosperous. We believe that
fulfilling this mission is our corporate social
responsibility. Meanwhile, the roles of companies
and what society expects of them continue tochange. In this backdrop, the INPEX Group is awarethat the areas in which society expects us to focus
our efforts as we engage in our business are notclearly defined. For this reason, we discussed whatkind of CSR we should focus on with external
experts who are leading authorities in their fields
and well-versed in the area of CSR.
We shared the details of these discussions with
the CSR Report Task Force to serve as a reference
for what content to include in the report, anddiscussed the CSR issues we face and how to givedue consideration to our stakeholders.* In doing
this, we have been able to take the first step inclarifying the role of our CSR activities as we move
forward.
* Please refer to pages 16–19

Interview

1
Adopt a long-term
perspective to consider major
issues 10 years in the future
Mariko Kawaguchi
General Manager
CSR Promotion Department
Daiwa Securities Group Inc.

The concept of CSR changes according to the social climate
and trends among stakeholders. The company must not only
look at current key issues in business and management but
also at issues that might become central to the company in 10
years.
To run a business on the policy of providing a steady supply ofenergy while increasing the company’s interests is quite
important given our society’s dependence on fossil fuels. The
company must keep in mind, however, that the need will arise
to formulate a long-term vision with an eye on the possibilityof the current system falling out of use.
The aim of social contribution initiatives is to develop
employees flexible enough to listen to external stakeholders
and incorporate their ideas, who can adopt the perspectives ofconsumers, and who possess a diverse set of values.

Interview

2
Engage in CSR with firm
understanding of yourstakeholders
Toshihiko Goto
Chief Executive
Sustainability Forum JapanThe INPEX Corporate Social Responsibility Policy states that thecompany will engage in business “based on the understandingof cultural diversity,” but this section does not stand out
enough. As a resource exploration and development company,
the INPEX Group must clearly define in its philosophy andpolicies its stance on indigenous people, the environment,
cultures, and societies in countries where the INPEX Group isoperating its business, and include this in its objectives andplans.
When prioritizing CSR initiatives it is important to confirm thevarious interests and demands of stakeholders and regions. In
operating regions especially, the company must realize there
are social issues that host governments cannot handle on theirown only.
Society’s demands regarding biodiversity will remain strong,
and the INPEX Group must be fully aware of this.

Interview

Interview

Keep in mind need to actively
communicate information tosociety
Takejiro Sueyoshi
Special Advisor to the United Nations
Environment Programme Finance Initiative

CSR serves to make the current business the best it can be. The
INPEX Group’s principal CSR is to provide a stable and efficient
supply of energy to customers.
Energy resources are extremely important for society, andthere is an expectation that these should be provided withoutburdening society or the environment. There is real meaning in
the INPEX Group communicating its newly defined message ofproviding a “stable and efficient supply of energy” to the
public. In addition, consumers and the general public will feel asense of reassurance if the company recognizes society’s
expectations and outlines a policy for understanding andresolving the company’s obligations to society and theenvironment vis-à-vis the stable supply of energy.

Interview

5
Think of CSR in terms ofmanifest risk
Toshihiko Fujii

Consulting Fellow
Research Institute of Economy, Trade and Industry

Companies that begin CSR from the standpoint of risk
management often feel they have attained a positive effectover the long run. To handle risk when it actualizes, a company
needs to have a clear philosophy and policy that underlie its
response.
If a company intends to expand globally, it will face the issue of
how to manage groups of people with different values andcultural backgrounds. This cannot be done without a clear CSR
policy.
One positive effect of CSR is in human relations. Students arepotential employees and are quite interested in CSR. It is thus
an effective instrument in hiring excellent talent. CSR also
boosts employee motivation and pride in the company.

4
Propose long-term vision for
new energy

Comments on the stakeholder interviews
Katsujiro Kida Director, Executive Vice President in charge of CSR

Sachiko Takami
Chief Executive
The Natural Step JapanAs a professional energy operation, the public expects the
INPEX Group to propose a long-term vision that presupposes
the eventual depletion of resources and to consider newenergy alternatives to fossil fuels as a way to help prevent
further global warming. By creating a long-term vision that
describes its current position, its progress, and its final goals,
the Group can seek the understanding and acceptance of its
stakeholders.
Western companies actively engage in CSR because of thestrong demands of NGOs. Companies are now expected toundertake welfare and environmental measures—duties thatused to be under the purview of the national and local
governments—as part of their social responsibility. Goingforward, a company will need to remain sensitive to its
stakeholders’ views as its business develops globally and tocooperate with various sectors. A company must contribute tosociety through its business operations.

Recognizing that the INPEX Group mustclarify the role of its CSR, we asked a wide
range of experts for their comments andproposals on our CSR initiatives andreceived invaluable feedback.
With this feedback from the experts, wehave reconfirmed the need to act with a broad perspective inorder to fulfill the INPEX Group’s social mission of providing
customers with a stable and efficient supply of energy. We mustclarify our CSR policy, strengthen communication andcollaboration with our stakeholders, and formulate a roadmap
and set goals based on a mid- to long-term vision.
In light of these opinions and proposals, we will reexamine
the INPEX Group’s CSR policies as we seek to ascertain individual
issues in detail. We intend to promote measures to energize our
day-to-day activities.

Special Feature 1

3

Special
Feature2

CSR Issues in Our Business Operations andConsideration for Our Stakeholders
Acquisition of License Blocks

Special Feature 2

CSR Issues
Eradication of bribery and corruption
Compliance with laws

Stakeholders
Oil and gas producing countries
Employees
Shareholders and investors

Consideration for Our Stakeholders
Contract signing ceremony

Compliance with local laws

Activities
Collection of technological information
pertaining to regions with potential crude oiland natural gas reserves
Technological assessment based on existing
documentation and purchased materials andpreliminary survey of location conditions,political and economic stability, and legal
frameworks in potential regions of operation
Applications and bidding for concession rights
or working interest
Conclusion of contracts to acquire interests

We aim for a keen awareness ofcompliance

Tetsuhiro Murayama
Legal Affairs Group Manager
Business Development & Legal Unit
The Business Development & Legal Unit is in charge oflaunching new ventures and putting the necessary contracts
in place. What we watch out for in terms of CSR in
conducting our duties is corruption such as the bribery of
foreign civil servants. The INPEX Group never pays cash toforeign civil servants or engages in other misconduct inhopes of securing oil rights, but sometimes when we takeover partial interests from other companies we have theminclude guarantees in the Interest Transfer Agreements thatstate they did not offer bribes to secure the initial interests. As
competition to secure oil and natural gas resources grows
increasingly intense, there is a strong demand internationallyfor companies to possess a keen awareness of compliance toensure that the processes for acquiring new interests aretransparent and that corruption or other misconduct does
not occur. The companies in the INPEX Group maintain aconstant awareness of this in their daily routines.

In conducting our operations, we have reconfirmed the kinds of CSR issues we face as well as
the kinds of stakeholders we have and how we should accommodate them. In this feature,
we provide an overview of each.

Exploration and Evaluation
CSR Issues

1. Management of protected areas, biota and ecosystems, water tables,
topographical/geological formations, and historical sites
2. Resident relocations, livelihood, cultural heritage, scenery, ethnic minorities and indigenous
peoples, labor conditions (human rights and safety/health)
3. Air quality, water quality, waste products, soil pollution, noise/vibration, subsidence, foul odors, etc.

Stakeholders
Study of oil layers

Activities
Collection of basic data regarding the potential
subsurface accumulation of crude oil and natural
gas by using terrestrial geological surveys, aerial
photographs, satellite images, and existing dataon exploration
Implementation of geophysical surveys,
including gravity, magnetic, and seismic surveys,
to ascertain underground structures and locate
favorable structures
Determination of locations for and drilling of
exploration wells to confirm the existence of
crude oil and natural gas
Determination of locations for and drilling ofdelineation wells to evaluate the extent of thedetected crude oil and natural gas
Evaluation of subsurface information to confirm
the distribution of crude oil and natural gas
reservoirs and to estimate reserves
Comprehensive evaluation of the commercial
viability of development

Oil and gas producing countries
Employees
Shareholders and investors
Partner companies
Local communities
Suppliers (vendors, etc.)

Consideration for Our Stakeholders
Implementation of environmental impact assessments
Reduction of impact of exploration activities on the natural and social environments

We value safe operations andrelationships with local communities

Tetsuro Teramoto
Caracas OfficeAmerica & Africa Project Division
In the Moruy Project that I oversee, we are exploring fields off
the coast of Venezuela, and at the end of last year we drilled
an exploration well.* We give particular consideration to the
local communities and environment when we drill. In theenvironmental impact study we conducted before drilling,
we examined environmental factors such as water quality
and ecosystems as well as factors pertaining to local
industries and the livelihoods of local residents. In
accordance with this, we drafted a drilling plan based on theassumption that we would use materials and equipment andfollow standard procedures with low environmental impact.
This plan also included marine pollution countermeasuresand a contingency plan in case of an oil leak. We submitted
this plan to Venezuela’s Ministry of Environment and Natural
Resources and Ministry of Energy and Petroleum to receive
permission to drill. We also hold information sessions withlocal governments, fishermen, and other local groups to seek
their understanding and cooperation as we strive to engage
in safe operations.
* Wells drilled in undeveloped strata for locating oil and gas layers

Special Feature 2

Eradication of bribery and corruption
Compliance with laws
Protection of the natural environment1
Considerations of social environment2
Pollution countermeasures3
Acquisition of EIA permits and monitoring
Fair procurement activities

Special
Feature2

CSR Issues in Our Business Operations andConsideration for Our Stakeholders

Development and Production
Special Feature 2

Stakeholders
Oil and gas producing countries
Employees
Shareholders and investors
Local communities and NGOs
Partner companies
Suppliers (vendors, banks, buyers, etc.)

Consideration for Our Stakeholders

Offshore facility of Bayu-Undan project

Activities
Formulation of development plans for oil and gas fields

Active disclosure of data concerning development andproduction activities
Scholarships for students in oil and gas producing countries
Implementation of environmental impact assessments
Health maintenance of employees at operating sites
Fair materials procurement
Safe operation at operating sites
Reduction of greenhouse gas emissions
Improvement of local living standards by developing
infrastructure

Drilling of production wells (wells for commercial
acquisition of crude oil and natural gas)
Construction of processing facilities to separate
gas and liquid and to filter out impurities, andconstruction of loading terminals for oil and gas
Production of crude oil and natural gas

We aim for energy efficiency and low
environmental impact

CSR Issues

Masanori Suzuki

Eradication of bribery and corruption
Compliance with laws
Protection of natural environment1
Consideration of social environment2
Pollution countermeasures3
Acquisition of EIA permits and monitoring
Fair procurement activities
Protection of cultural heritage
Respect for local cultures and customs
Respect for human rights
Labor safety and health
Disclosure of information pertaining to projects
Safety management
Business Continuity Plans (BCP)
Economic contributions to local communities and fostering of industry

Production Unit
Domestic Project Division

1. Management of protected areas, biota and ecosystems, water tables,
topographical/geological formations, and historical sites
2. Resident relocations, livelihood, cultural heritage, scenery, ethnic minorities
and indigenous peoples, labor conditions (human rights and safety/health)
3. Air quality, water quality, waste products, soil pollution, noise/vibration,
subsidence, foul odors, etc.

I am primarily involved in engineering for plantenhancements at our main gas field in Minami Nagaoka(Nagaoka City, Niigata Prefecture). We actively adopt newtechnologies to promote projects that are energy efficientand have low environmental impact. For example, we are
currently considering the installation of a large-scale
compressor for this project. Instead of running thiscompressor with a gas turbine, we will use a motor and an
inverter controller in an effort to increase efficiency andreduce energy consumption and CO2 emissions. Goingforward, I hope to accumulate experience and apply theoperational capacity we develop in Japan to operator
projects overseas.

Refining, Shipment and SalesCSR Issues

Stakeholders
LNG tanker

Activities
Oil
Crude oil produced in Japan is transported by oil tankers
and tanker trucks to our refineries, where it is refined into
petroleum products such as naphtha, kerosene, heavy oil,and liquefied petroleum gas (LPG, composed mostly of
propane and butane), which are then sold and shipped tocustomers by oil tankers and tanker trucks
Crude oil produced outside Japan is sold and shipped byoil tankers or via pipelines to refineries and/or trading
companies for refining, to power companies for use inthermal power plants, and to petrochemical companies
for the manufacture of chemical products
Exchange of crude oil with other international oil
companies to meet customer needs

Natural Gas
Natural gas produced in Japan is sold to gas companies
and large factories via pipelines
Natural gas produced overseas is shipped and sold topower and gas companies primarily in Japan as liquefied
natural gas (LNG, composed mostly of methane) and LPG,
or sold to gas producing countries and their neighbors
via pipelines
In 2014, the Naoetsu LNG Receiving Terminal, currently
under construction, will begin receiving LNG produced
overseas for resale in Japan through domestic gas
pipeline network built as part of a gas supply chain

Oil and gas producing countries
Shareholders and investors
Local communities and NGOs

Employees
Customers

Consideration for Our Stakeholders
Product safety control
Development of systems for stable and flexible supply

We strive to provide a steady supply ofnatural gas and engage in product control
Kiyoshi Fuse
Nagaoka Field OfficeNiigata District Office
Domestic Project Division
I am a plant operator at the Nagaoka Field Office where we
produce natural gas from three plants: Koshijihara, Oyazawa,and Sekihara (the last plant is made operational depending
on demand). Two important jobs in operating a production
plant are providing a steady supply of gas and productcontrol.
Plant capacity fluctuates from day to day, and it is our duty
to make sure we do not overlook any malfunctioning partsand do not make mistakes due to lack of know-how orexperience. We do our best to avoid mishaps by utilizing theoperator manual, work process manual, safety control
standards manual, and other resources.
We are always considering more efficient operating
methods and we employ accident training, TPM, and study
sessions to boost the technological capacity of ouroperations. We strive to provide an even steadier supply ofgas and more competent product control.

Special Feature 2

Eradication of bribery and corruption
Compliance with laws
Protection of ecosystems
Fair procurement activities
Protection of cultural heritage
Respect for local cultures and customs
Respect for human rights
Labor safety and health
Disclosure of information pertaining to projects
Safety management
Business Continuity Plans (BCP)
Economic contributions to local communities and fostering of industry
Reduction of environmental impact
Mitigation of global warming
Safe transportation
Reduction of environmental impact during transportation

Environment
Environmental
Impact Resulting from
Our Business
Activities

The INPEX Group monitors how business activities ineach process impact the natural environment andenergetically tackles reduction of any adverse impact

FY2008FY2009Fuel (TJ)

726

183

Fuel (TJ)1

FY20082,645

FY20092,944

Water (kl)

121,076

91,787

Water (kl)898,631

791,330

Purchased gas (k SCF)

00

Purchased gas (k SCF)

2,183,220

4,542,440

Purchased raw materials (BBL)00Purchased raw materials (BBL)

0

0
*1

Exploration, Development, and Construction

Production and Power Generation

We search for underground geological structures that may containcrude oil and natural gas, and drill exploratory wells in promising

When crude oil and natural gas are extracted from underground at
our oil and gas fields, impurities such as moisture and carbon dioxide

locations. If the existence of sufficient reserves is confirmed, wedevelop oil and gas fields by drilling production wells, constructing

are removed from them to make them ready for transportation bytanker trucks or pipelines. Electricity is generated at a power plant

production facilities and receiving terminals, and laying pipelines.

powered by gas and condensate (hydrocarbon liquids).

INPEX CORPORATIONINPEX Masela, Ltd.
Teikoku Oil Libya UK Ltd.
Teikoku Oil (Suriname) Co., Ltd.

INPEX CORPORATIONWest Bakr Petroleum Co.

INPEX Browse, Ltd.
INPEX Libya, Ltd.
PT Moruy II, S.A.

Gas Guarico, S.A.

Environment

Environmental Impact Resulting from Our Business Activities

INPUT

Pipeline construction site

Koshijihara Power Plant

Seismic survey

Copa Macoya Gas Field, Venezuela

OUTPUT
FY2008FY200955,70024,605

PRTR substances (t)210PRTR substances (t)214

12VOC (t)39

1

VOC (t)511

448

NOx (t)559

130

NOx (t)174

149

SOx (t)22

4

SOx (t)34

34

Wastewater discharged into public water bodies (kl)3300Wastewater discharged into public water bodies (kl)

798,768

647,024

GHGs (t)Notes:

GHGs (t)FY2008FY2009390,877

388,495

Volume of total waste disposed (t)

2,797

1,431

Volume of total waste disposed (t)

1,515

2,233

Recycled volume (t)29,125

18,297

Recycled volume (t)

3,223

951

The input and output data for fiscal 2009 shown on this page constitute the sum of all the HSE data collected from our operations in Japan and overseas
Figures in the tables have been rounded to the nearest whole number; the sum of the individual items thus may not match the totals
Data has been carefully reviewed, and some data from fiscal 2008 has been revised to represent the correct values

Environmental Impact Resulting from Our Business Activities in Fiscal 2009
The INPEX Group took measures to reduce adverse environmental impact,

and installing VOC recovery devices in our tanker loading facilities.

such as by curbing the emission of GHGs, VOCs, and PRTR-controlled

The 2009 CSR Report has a section titled Exploration and Development

substances in our business activities in fiscal 2009, based on a steadyon page 24. This year, we added PT Moruy II, S.A. and Teikoku Oil (Suriname)implementation of our fiscal 2009 plan that included efforts such as burning

Co., Ltd. to the section and changed the title to Exploration, Development,

vented gas, recovering or burning VOCs contained in exhaust emissions,and Construction.

FY2008

Fuel (TJ)1

303

320

Water (kl)

228,536

232,27900144,670

253,490

Purchased gas (k SCF)
Purchased raw materials (BBL)

INPUT
TOTAL

FY2009

3,674

3,447

Water (kl)

1,248,243

1,115,396

Purchased gas (k SCF)

2,183,220

4,542,440

Purchased raw materials (BBL)

144,670

253,490

Environment

FY2008FY2009Fuel (TJ)

Refining, Transportation, and Sales

Consumption and Utilization

Crude oil is transported to a refinery, where it is refined into
petroleum products such as naphtha and kerosene for later sale.

Petroleum products and natural gas are sold to and utilized byfactories, gas stations, power plants, utility gas companies,

Natural gas is transported directly from plants to customers via
pipelines. The Naruto Gas Field in Chiba Prefecture processes andhospitals, offices, and homes.
The electricity we generate is wholesaled to power producer

sells iodine, a byproduct of natural gas.

and suppliers (PPSs).*

Teiseki Topping Plant Co., Ltd.

Teiseki Pipeline Co., Ltd.

* A non-utility private company that sells electricity

Natural gas pipeline

Service station in Oogata

Sales
FY2008FY2009Natural gas (k SCF)

88,790,607

86,471,526

Crude oil (amount sold; BBL)

2,307,887

2,278,546

Petroleum products (BBL)

1,421,784

1,435,478

LPG (BBL)

62,653

77,251

Electricity (1,000kWh)

108,853

136,696496

453

Iodine (t)Naoetsu Oil Terminal

GHGs (t)FY2008FY200925,14026,342

PRTR substances (t)2108VOC (t)378

433

GHGs (t)NOx (t)19

16

PRTR substances (t)2

SOx (t)

4

5

25

21

VOC (t)367,456158

441,875
152

929

883

NOx (t)

752

294

162

137

SOx (t)60

42

1,166,554
4,470

1,088,899
3,815

32,51019,386

Wastewater discharged into public water bodies (kl)Volume of total waste disposed (t)Recycled volume (t)OUTPUT
TOTAL

Wastewater discharged into public water bodies (kl)Volume of total waste disposed (t)1. Includes some fuel produced by INPEX CORPORATION
2. Data on the output of PRTR substances was collected only from our operations in Japan

Recycled volume (t)FY2008FY2009471,716

439,442

Environmental Impact Resulting from Our Business Activities*1Environment

Environment

Preventive Measures against Global Warming

Preventive
Measures against
Global Warming

Cutting greenhouse gas emissions while increasing
production of natural gas to meet rising demand

Reducing Greenhouse Gas Emissions
Since fiscal 2008, the INPEX Group has been collecting
environmental data in Operational Organizations, setting
annual environmental goals for each Operational Organization,and formulating annual plans for their achievement. The
Domestic Project Division established quantitative goals forfiscal 2009 to reduce greenhouse gas (GHG)1 emissions per unitof production2 to below the previous year’s levels. The
measures we have been undertaking to reduce GHG emissions
are outlined below.

Using clean natural gas produced by INPEXNatural gas is a clean fuel that emits less CO2 than other fossil
fuels. For this reason we rely as much as possible on the natural
gas we produce ourselves to fuel our crude oil and natural gas
processing plants and field offices. We are also striving to
reduce CO2 emissions by installing energy-efficient systems
powered by natural gas.

Exploring measures to handle CO2 separated andremoved from natural gas
At the Minami Nagaoka Gas Field in Nagaoka, Niigata
Prefecture, our major gas production base in Japan, CO2 thatmakes up approximately 6% of natural gas is separated andremoved with an amine solution and then dispersed into theatmosphere. We are currently studying the possibility ofeffectively using this separated CO2 or storing it underground.

Reducing GHG emissions during operations

on the operation—to temporarily discharge a small amount of
natural gas into the air when relocating pipelines or when
conducting routine inspections of equipment. As thegreenhouse effect of methane, the principal component of
natural gas, is 21 times greater than that of CO2, we doeverything we can to disperse as little natural gas as possible,
such as by lowering pressure in pipelines prior to relocatingthem or installing a ground flare3 to burn the waste gas into
heat, water, and CO2.
By engaging in these activities our total GHG emissions inJapan in fiscal 2009 were 409,600 tons, about the same as fiscal
2008. Due to increased activity, the volume of CO2 emissions
from electricity generation rose 15,700 tons, but we were able
to reduce GHG emissions in other areas as follows: 2,300 tons
due to ground flare installation and measures to reduce gas
emissions during pipeline construction; 3,500 tons of CO2 fromoil and natural gas production adjustments at our plants; and10,800 tons of CO2 by reducing separated CO2.
Total per-unit energy use for crude oil and natural gas
production and electricity generation rose 0.143kg-CO2/GJ to
5.196kg-CO2/GJ. This increase was due to an uptick in theelectricity generation business that added 0.224kg-CO2/GJ of
per-unit emissions to the equation. Aside from electricity
generation, we reduced emissions per unit of production inenergy use, CO2 removal, and natural gas emissions.
1. A gas that traps heat in the atmosphere, including CO2 emitted when using energy, CO2
emitted during separation and removal, and methane contained in natural gas from the
INPEX Group’s operations
2. GHG emissions divided by calorific value of crude oil, natural gas, and electricity production volume
3. A device used to burn and render harmless leftover hydrocarbon gas emitted from oil production
facilities, gas processing facilities, and oil refineries instead of letting it disperse into the atmosphere.
Since the flame burns vertically inside a cylindrical furnace, its impact on the surrounding
environment in terms of noise and illumination at night is low.

In the oil and natural gas business, it is inevitable—depending
Total GHG Emissions by Sources(1,000 tons of CO2)

Energy use

GHG Emissions per Unit of Production

CO2 removal

500

Natural gas
emissions

400

64
41

300
36
200
100
0

29
69
70
2000

43
74

45

59

26

76

82

92

59

73

2001

2002

29
104

210

Generation ofelectricity

62
24
212

kg-CO2 /GJ

5
78
22

Energy use

4
3

0
0
0.794 1.120
1.858

201

67

73

83

99

120

2003

2004

2005

2006

2007

112
2008

108
2009 (year)

Note: Data has been carefully reviewed, and some data from fiscal 2008 have been revised torepresent the correct values

1
0

1.897

0
1.166

1.523

2000 2001

0.809

Generationof electricity

0
0.625

0.761

0.985

0
0.604

0
0.608

0.525

0.302

0.280

2.411

2.664

2.603

0
1.450

Natural gas
emissions

1.971

1.997

2.108

2.214

1.895

1.634

1.667

1.776

1.731

1.526

1.387

1.376

2002

2003

2004

2005

2006

2007

2008

2009 (year)

1.924

2

137

CO2 removal

6

2.555

Nippon Keidanren Voluntary Action Plan
on Environment

The INPEX Group concurs with the Japanese government’s
goal of establishing a policy and system for helping toprevent global warming, and participated in thegovernment-backed Prototype Project of Voluntary Domestic
Emissions Trading Scheme* in December 2008. In an
application of the project, we set our own target of reducing
the average GHG emissions per unit of production (calorificvalue) at oil and natural gas development facilities in Japan
from fiscal 2008 through fiscal 2012 by 30% below the fiscal
1990 level. While the target that the JPDA, of which we are amember, had set in its Voluntary Action Plan was 20%, we set
ours at 30% in an effort to help the JPDA achieve its goal.
By using the natural gas that we produce as fuel in our
project sites in Japan, installing energy-saving systems
powered by natural gas for greater energy efficiency, andensuring better operational control at our oil and gas fields,
we strive to reduce CO2 and other GHG emissions and met
our consecutive targets for fiscal 2008 and fiscal 2009.
* A trial program initiated by the Ministry of Economy, Trade and Industry and the Ministry of
the Environment in 2008 for emissions trading among businesses to reduce CO2 emissions* A consigner of cargoes transported in volumes exceeding 30 million ton-kilometers per year
is designated as a specified consigner

Forestation Project in Australia
To gain know-how concerning the effects of forestation andthe management and maintenance thereof in an effort tooffset the CO2 that we emit, we have been running a pilot
forestation project in Australia since fiscal 2008 through our
subsidiary INPEX Browse, Ltd. We planted about 1.4 million
eucalyptus saplings on 645 ha of land that we acquired insouthwestern Western Australia and have been monitoring
their growth. The eucalyptus trees we planted are native toAustralia and suited to the regional climate. Thus far, they
have grown to over two meters tall. Over the next 50 years
these trees are expected to absorb approximately 450,000
tons of CO2 through photosynthesis. For this project, we
signed a contract with CO2 Australia Ltd., a company certified
as Greenhouse Friendly under an Australian government
initiative to register CO2 emissions credits, and have planted
trees and monitored their growth in strict adherence with
the national government’s GHG policies. We are now
considering afull-fledged
forestation projectthat will serve as
one of Australia’s
GHG gascountermeasures.
Land set aside for forestation

Preventive Measures against Global Warming

Achieved our Target in a Prototype Project for
Voluntary Domestic Emissions Trading Scheme

Under the provisions of Japan’s amended Energy
Conservation Law, enacted in April 2006, consigners ofcargoes transported in volumes exceeding 30 million tonkilometers per year* are obliged to report the volume of theirtransported cargoes, develop energy conservation plans, andreport quantities of consumed energy. The INPEX Group isclassified as a specified consigner of cargoes since wetransport in volumes exceeding 200 million ton-kilometersand have been measuring and reporting quantities ofconsumed energy and our transportation-related energysaving plans since fiscal 2006.
We transport around 90% of our produced oil and gas bysea in oil tankers. In fiscal 2009, we switched from calculating
the volume of fuel used in marine transport with the tonkilometer method to the fuel consumption method. For
overland transport mainly using tanker trucks, we try as
much as possible to use the fuel consumption method
instead of the ton-kilometer method in an effort to accurately
assess fuel usage and reduce GHG emissions.

Environment

The INPEX Group participates in the Nippon Keidanren
Voluntary Action Plan on the Environment through the Japan
Petroleum Development Association (JPDA). A wide array of
industries participate in the Voluntary Action Plan on theEnvironment, and they set numerical targets and regularly
assess the status of emissions in an effort to reduce emissions
volumes or emissions per unit of production. At present, 61
companies are involved in this project. The JPDA has set atarget of reducing the average GHG emissions per unit ofproduction (calorific value) at oil and gas development
facilities in Japan from 2008 through 2012 by 20% below the
fiscal 1990 level. The JPDA also promotes the efficientdevelopment of oil and gas overseas, encourages thedevelopment of gas as a clean energy that produces fewer
GHG emissions when used, and seeks to facilitate thedevelopment of technology to contribute to reducing GHG
emissions.
Our emissions per unit of production were on the rise due
to damage caused to facilities by the Niigata Chuetsu-Oki
Earthquake and the increased production volume of gas.
Since the restoration of damaged facilities, however,installation of additional emission-reducing equipment, andstreamlining of facilities from fiscal 2007, we have achieved
the goal set in the Voluntary Action Plan of reducing GHG
emissions per unit of production to 20% below the fiscal
1990 level after fiscal 2008.

Cargo Transportation ReportingEnvironment

Environment

Development of Technologies to Reduce Environmental Impact

Developmentof Technologies
to Reduce
Environmental
ImpactWe are reducing environmental impact through R&D
of next-generation technologies

Advancing Research into CO2 Capture andStorage to Prevent Global Warming
Cooperation with experiments using undergroundnatural gas storage technologies
Under growing pressure to reduce emissions of CO2, theprimary cause of global warming, researchers around the world
have been working on carbon dioxide capture and storage(CCS) technology to capture CO2 emitted from major sources
such as thermal power plants and steel plants, and to transportand store it in deep underground aquifers or under the ocean
floor for the long term. Commercial CCS projects are alreadyunderway in Algeria, Canada, and Norway, capturing andstoring CO2 underground in the range of one million tons per
year. Large-scale CCS experiments are either being conducted
or planned in the major industrial nations of North America andEurope and in several developing countries around the globe.
In May 2007, Japan proposed a long-term goal of reducing
global GHG emissions by 50% from the then current level by
2050. To achieve this goal, the Ministry of Economy, Trade andIndustry (METI) unveiled the “Cool Earth—Innovative Energy
Technology Program” in March 2008, in which CCS was listed
among 21 innovative energy technologies. Furthermore, theleaders at the G8 Hokkaido Toyako Summit in July 2008
announced their strong support for launching 20 large-scale
CCS demonstration projects globally by 2010. After the summit,
the Japanese cabinet approved the Action Plan for Achieving a
Low-carbon Society, which included a plan to start large-scaletesting of CCS technology as early as feasible in or after fiscal
2009 with the aim of commercializing the technology by 2020.
In 2000, we began working with the Research Institute of
Innovative Technology for the Earth (RITE) to test the CCS
technology at our Iwanohara Site located in the Minami
Nagaoka Gas Field in Nagaoka, Niigata Prefecture. We also

provided technical expertise gained from our experience in theunderground storage of natural gas and enhanced oil-recovery
techniques. Approximately 10,000 tons of CO2 were injected
and stored in the aquifer at the testing site between July 2003
and January 2005. We have been continuing to monitor the site
since the RITE project was concluded at the end of fiscal 2007.

Helping to establish Japan CCS Co., Ltd. to acceleratecommercialization of CCS
Thirty-seven leading Japanese companies (as of March 31,2010) with specialized technology in various CCS fields joined
forces to establish Japan CCS Co., Ltd., in May 2008. Its mission is
to carry out research and development projects for CCS
technology, and to conduct a feasibility study on its
commercialization in an effort to achieve Japan’s stated goal of
beginning large-scale testing of CCS technology as early as
possible and of commercializing CCS by 2020. Major
shareholders aside from the INPEX Group include Japan
Petroleum Exploration Co., Ltd., Tokyo Electric Power Company,
Nippon Oil Corporation (today’s JX Nippon Oil & Energy
Corporation), Idemitsu Kosan, and JGC Corporation. Since fiscal
2008, commissioned by and receiving aid from METI, Japan CCS
has been performing technical assessments of a number of
proposed testing sites for CCS in Japan to narrow them down
to the best candidates for conceptual design, and on-site
inspection while working with research institutions anduniversities to implement various surveys. Japan CCS has also
been commissioned by Japan’s New Energy and Industrial
Technology Development Organization (NEDO) to work on athree-year feasibility study of a Total CCS System since fiscal
2008, which uses testing equipment for an integrated coalgasification combined cycle (IGCC) located in Iwaki City in
Fukushima Prefecture and our old Offshore Iwaki Gas Field.

Conceptual Diagram of CCS
Transport CO2

Inject CO2
Ground injection well

Separate andcapture CO2
Major source of CO2

Transport CO2

Inject CO2
Offshore injection well

Transportation via pipeline

Transportation via pipeline
CO2

Impermeable layer
Underground aquifer
Aquifer beneath ocean floor

CO2

Developing Next-Generation Fuels

In March 2010, we commenced a two-year joint research projectwith the Japan Oil, Gas and Metals National Corporation on CO2enhanced crude oil recovery (CO2 EOR) in the large-scale Lower
Zakum oil field at offshore Abu Dhabi.
CO2 EOR is a technology for collecting higher volumes of crude
oil from wells by injecting oil reservoirs with CO2. In recent years,
research has focused on the use of CO2 separated and collectedfrom the exhaust gas of power plants and refineries. Not only
does CO2 EOR improve the crude oil recovery rate, but it also
allows for the underground storage of CO2. Therefore, the use ofthis technology to help control the emission of CO2 into theatmosphere is promising.
One feature of this research is our attempt to apply CO2 EOR
technology, which to date has been used in onshore oil fields
primarily in North America, to an offshore oil field. If we cancommercialize this technology, it will be the first of its kind in theworld. For the time being, we will assess the oil recovery effectwith indoor experiments and data simulation. If we obtainfavorable results, we intend to cooperate fully in designing a pilot
test as the next phase of the project, and we will energetically
help put into practice the large-scale CO2 EOR project that the
Abu Dhabi National Oil Company (ADNOC) is considering
implementing in the near future in the major fields of Abu Dhabi.

Producing Methane in Depleted Oil Fields
Using Microbes
We have been researching technology to produce methane

CO 2

Oil or gas field

Natural gas

Cap rock(Impermeable layer)

MethaneGas reservoir
Oil reservoir
Aquifer
CO2

Methane-producing bacteria

H2Bacteria that produce H2 from organic substances

Basic Research of Technologies to Generate
Methane with Photocatalytic Reactions
We are currently engaged in joint research with the Nagaoka
University of Technology on highly active photocatalytic reactions
to generate methane from CO2 and water. If this technology canbe practically applied in the future, we will be able to use sunlightto convert CO2—which is considered the cause of global
warming—into methane, the main component of natural gas. By
turning CO2 into a resource this technology holds promise for its
contribution to the creation of a low-carbon society.

Development of Technologies to Reduce Environmental Impact

Joint Research on CO2 EOR at Offshore Abu
Dhabi

Environment

Amid mounting pressure to develop next-generation energy
systems, we have been gearing up for the development of
next-generation fuels with a lower environmental impact thancoal or oil. One such approach we have been working on is todevelop gas-to-liquid (GTL) technology to synthesize diesel oil
and kerosene from natural gas.
Benefits of GTL are that it is made from natural gas whose
reserve-to-production ratio is larger than that of crude oil, that it
can be stored and transported in its liquid form at normal
temperature, and that it generates a cleaner exhaust whenburned. In April 2009, a pilot plant began operating at ademonstration center of the Nippon GTL Technology Research
Association, established by six companies, including the INPEXGroup, and by June 2009 it was successfully producing 500
barrels of GTL oil per day. We operated the pilot plant until
October 31, 2009, and continue to analyze the various data wecollected. The second test run of the plant is scheduled for April
2010.
In addition to GTL, we have also been working on developing
dimethyl ether (DME), an alternative clean fuel made from naturalgas, which does not generate toxic substances when burned.

using microbes that live underground in depleted oil fields. This
technology uses methane-producing bacteria to converthydrogen, which hydrogen-producing bacteria make bydecomposing residual crude oil left in the reservoir of a depleted
oil field, and CO2—injected underground for carbon capture andstorage—into methane. This research holds promise for building
a sustainable carbon-cycle system in which residual crude oil in
depleted oil fields and injected CO2 will be converted intomethane that can be used as a fuel.
In June 2008, in an attempt to step up the research effort, we
cosponsored a research program entitled “Sustainable CarbonCycle System Engineering” with the Frontier Research Center for
Energy and Resources at the School of Engineering of the
University of Tokyo. Both parties share their research laboratories
to achieve greater efficiency in conducting analyses andexperiments.
We have already confirmed the existence of hydrogenproducing and methane-producing bacteria, which play a majorpart in generating methane, from the research conducted on the
microbial community in our Yabase Oil Field (Akita Prefecture)
and Niibori Oil Field (Yamagata Prefecture). Using these bacteria,
we successfully produced methane at the laboratory level by
injecting CO2 into the ground under high pressure andtemperature conditions similar to those in actual oil fields. We
plan to conduct another methane production experiment in arock core with conditions closer to those of an oil reservoir todevelop techniques to promote the decomposition of crude oilthat serves as a supplier of hydrogen, and to assess the optimum
environment for methane-producing microbes and their habitatand symbiosis environment in order to develop techniques forthe artificial control and stimulation of methane-producing
reactions.

Environment

Environment

Pollution Prevention

Pollution
Prevention

We strive to alert environmental accidents andprevent soil and air contamination

Measures to Prevent Soil Contamination

Environmental Accident Prevention andCountermeasures

Although the INPEX Group does not use any designated harmful
substances stipulated in the Soil Contamination Countermeasures
Act in our operations in Japan, possibilities exist for contaminationfrom benzene contained in crude oil that leaks during production
and heavy metals contained in drilling fluids. The Act does not
stipulate measures for oil contamination. However, we are
expected to take measures to survey and prevent contamination
due to the major impact it can have on the soil environment.
In that backdrop, we have formulated voluntary guidelines forsurveys and prevention of soil contamination in light of theprinciples outlined in the Soil Contamination Countermeasures
Act. Using these guidelines, we replace soil as needed when an
environmental accident occurs or when we return site property tolandowners.
After an accident that occurred in December 2005 where heavy
naphtha leaked at the Teiseki Topping Plant, the contaminated soil
was quickly removed and replaced with clean soil. During fiscal
2009, the contaminated soil was sanitized through a biopile
remediation process that used microbial degradation. We held
multiple sessions with local residents to explain this practice andtook extra caution to ensure that contaminated substances were
not scattered from the site during the sanitation process. We
completed the sanitation work in November 2009.

In fiscal 2008 and again in fiscal 2009, corroded pipelines
caused a series of small oil leaks in the West Bakr Oil Field in
Egypt. In November 2009, in particular, 22 barrels of crude oilleaked from the pipeline as efforts to locate the leak were
delayed.
We took emergency measures specified in the HSE
Management System as we took action to replace thecorroded pipeline. Besides boosting pipeline patrols in aneffort to discover future leaks expeditiously, we are studying
the mechanisms that triggered the pipe corrosion. We are also
considering methods to prevent recurrence by replacing
pipeline materials, injecting pipelines with anticorrosive agents,
and removing sludge from pipelines.
As we sought to deal with the soil contamination caused bythis heavy crude leak, we examined various treatment methods
while separating and storing the contaminated soil. Since themakeup of heavy crude makes cleanup next to impossible,
however, we decided to use the soil as material for asphalt.

Biopile remediation for soil
decontamination

Pipeline requiring repair

Riverside park outside theremediated contamination site

INPEX Joins Alliance to Prevent Oil Contamination in Caspian andBlack Seas
In February 2010, we joined the Oil Spill
Preparedness Regional Initiative (OSPRI), an
industrial alliance that seeks to improve thepreparedness of governments in oil
producing countries for preventing andhandling oil leaks in the Caspian and Black
Seas. INPEX maintains interests in the
Azeri-Chirag-Gunashli Oil Field, a producing

field at offshore Azerbaijan, and the Offshore
North Caspian Sea Block (Kashagan Oil Field),a field being developed at offshore
Kazakhstan. By providing a wide range ofknow-how to the governments of directly
concerned nations in the area, we aim toprotect sturgeon and other rare creatures in
the Caspian Sea.

Training for recovering spilled oil

Controlling Chemical Substances andChecking for Emissions to Atmosphere* The PRTR Act requires companies to report the volume of specific chemical substances released into
the environment and to improve their management of those substances. This system measures theamount of chemicals potentially harmful to humans or the environment released into the air, water, orsoil, as well as the amount of waste transported from business premises.

In accordance with the Air Pollution Control Act’s basic directive
to “reduce total VOC emissions from fixed sources by 30% of2000 levels,” we have set a voluntary reduction target of 45% for
our operations in Japan—which is more stringent than thenational goal—in a planned effort to reduce our VOC emissions.
VOCs associated with our operations are the BTX compoundsof benzene, toluene, and xylene, classified as non-methanehydrocarbons (NMVOCs), which occur in crude oil and naturalgas. VOCs are released when crude oil is transferred into storage
tanks or tanker trucks, and when natural gas is temporarily
discharged. For benzene, in particular, we have reduced
emissions by over 90% since fiscal 2001, and we continue topromote various countermeasures such as installing VOCremoval equipment, adding internal floating roofs to oil tanks,and controlling the release of natural gas directly into theatmosphere. We also monitor the ambient concentrations of
VOCs around the perimeters of our sites monthly to control theimpact on the surrounding environment.

Trends in Emissions of Benzene, Toluene, and Xylene (Operations in Japan)(t)
200

BenzeneTolueneXylene

171

150

100
83

50
27 24
14

0

2002

28
6

2003

16

18
6

2004

11

19
3

2005

24
9

3

2006

9

15
3

2007

7

2

2008

9

2 1

2009 (year)

In fiscal 2009, we removed sprayed materials and completed
other required measures in accordance with a survey on
potential airborne asbestos for all our buildings in Japan. Since
then, we have put necessary measures in place for all our
Operational Organizations under the direction of the HSE Unit.
We continue to conduct semiannual inspections in which we
photograph and monitor the degradation of building materials
that could potentially release asbestos into the air.
We entirely discontinued the use of materials containing PCB
by fiscal 2005, and have completed the legally stipulated
registration process for all our Operational Organizations. In
addition, we strictly manage the PCB waste we have in storage
and send status reports to local government agencies annually.
In fiscal 2010, 14 high pressure condensers stored in Joetsu,
Niigata Prefecture, are slated for final treatment.

INPEX Wins 2009 APPEA EnvironmentAward
In May 2010, the INPEX Group subsidiary INPEX Browse Ltd.
received the 2009 Environment Award (exploration companies
category) from the Australian Petroleum Production &Exploration Association Ltd. (APPEA) at the Association’s fiscal
2010 general meeting held in Brisbane, Australia.
The award was granted for the low-environmental-impact
survey methods used for the Ichthys Project. INPEX Browse used
an amphibious marsh buggy to conduct a geological survey ofa mangrove area in Blaydin Point outside Darwin, Northern
Territory, Australia, the projected site for an LNG plant. By usinga marsh buggy, INPEX Browse was able to safely conduct
surveys on soft
substrates, i.e., sand andmud, which greatly
reduced the risk of acidsoil runoff, and allowed
improved mangrove
regeneration.

Note: Some data on BTX values in fiscal 2008 were unintentionally dropped; this chart
reflects the corrected values

APPEA Environment Award presentation

Pollution Prevention

Reducing Volatile Organic Compound
Emissions (VOCs)

Proper Management of Asbestos
Containing Materials and PCB Waste

Environment

In Australia, Europe, and Japan, controlling chemical substancesis required by law, and each of our Operational Organizations
manages and reports its emissions in accordance with the lawsof the country in which it operates.
Pursuant to Japan’s PRTR Act,* our domestic Operational
Organizations monitor and report on the amount of benzene,
toluene, and xylene contained in crude oil, and trivalent chrome
compound used for drilling, that is emitted and transferred.
We also track the amount of SOx, NOx, and VOCs ourOperational Organizations emit into the atmosphere.

We made great strides in fiscal 2009, refurbishing VOC
recovery devices in crude-oil offloading units at the Nagaoka
Field Office to boost their operating capacity and reducing
direct emissions of natural gas into the atmosphere at the
Kashiwazaki Field Office through flaring. On the other hand,
natural gas was released from wells in our Akita District Officewhen we restarted production there and in the Minami Aga
Field Office when the plant operations of our wheeling service
contract partner were suspended. All told, we reduced VOCemissions for fiscal 2009 by approximately four tons over theprevious fiscal year.

Environment

We proactively recycle the drill cuttings and drilling
fluids that comprise the majority of waste generated

Environment

Resource Saving

Resource
SavingIndustrial Waste Measures
The majority of the industrial waste generated during oil andnatural gas development consists of drill cuttings and drilling
fluids.
When drilling, mud and other fluids are circulated through awell to form a wall, prevent drill ejection, and provide cooling andlubrication. Made with natural clay colloids, these fluids areadjusted with mud conditioners to suit the conditions of the well.
Since drilling fluids are made from natural materials, they containvarying concentrations of heavy metals, depending on their origin.
For this reason, the INPEX Group’s Domestic Project Division has
taken precautions against potential soil contamination by working
with a supplier of drilling fluids to analyze the makeup of each lotof drilling fluid and monitor the concentration of heavy metals.
Since the bulk of our industrial waste is comprised of drill
Fiscal 2009 Waste Materials from Operations in Japan
Other disposed waste
Other recycledwaste

6% (1,323t)

12%(2,535t)

Total waste
generated(Japan)21,779t

82%(17,922t)

Recycled drill
cuttings anddrilling fluids

Total recycling percentage in Japan88%

Fiscal 2009 Waste Materials from Operations in Japan and Overseas
Final disposal(Overseas)

Final disposal(Japan)Recycled(Overseas)

1% (142t)

5% (1,280t)

11%(2,535t)

Total waste
generated(Japan/Overseas)
23,201t83%(19,244t)

Recycled(Japan)cuttings and drilling fluids, the volume of waste increases when awell’s depth and number of wells increase. If the level of heavy
metals detected in drill cuttings and drilling fluids exceeds thelegal standard, the Domestic Project Division will treat this as
sludge and bury it. Wastes that do not exceed the legal standard
are recycled. We typically recycle 80–85% of these wastes intomaterials for roadbeds.

Managing Wastewater Discharged into
Public Water Bodies
Each of the INPEX Group’s Operational Organizations controls
wastewater discharged into public water bodies in accordancewith the environmental law of the region in which it operates. We
have installed wastewater treatment facilities in the district offices
where we produce oil and natural gas in order to properly treat
wastewater from the production process. At drilling sites, we use
these facilities to sanitize pit wastewater—a mixture ofunderground water and drilling fluid generated from the drilling
process—and reuse it as part of our effort to reduce theenvironmental impact on bodies of water that provide public
water. We use measurement devices to continuously measure andanalyze water quality,
and, based on this, wemonitor the volume oftreated water and water
quality in a concerted
effort to manage ourdischarge of wastewater
into bodies of water thatprovide public water.
Drilling fluid treatment unit

Effective
Utilization of Resources in Our Offices
As part of our energy efficiency measures at the corporate
headquarters, we have been participating in the Ministry of theEnvironment’s “CO2 Reduction/Light-down Campaign.” Since July
2009, we have been turning off all lights during lunch break and atnight (lighting only areas needed when working overtime).
Compared to before we joined the campaign, we successfully
reduced electricity consumption for lighting by approximately
20% per month. When converted to CO2, this reduction translates
into 2.81 tons of CO2 per month, or the amount of CO2 that 200
Japanese cedar trees can absorb in one year.

Environment

Protecting biodiversity to ensure coexistence withnatural environment around project sites

Conserving
Biodiversity

Animals living near construction site

Grey-faced buzzard

Honey buzzard

Japanese char

Clawed salamander

SculpinEnvironmental Impact Assessment in
Abu Dhabi
Japan Oil Development Co., Ltd., an INPEX Group company, iscurrently working with Abu Dhabi National Oil Company (ADNOC)
and ExxonMobil Corporation as partners on a project to develop
an offshore oil field in the waters off of Abu Dhabi, UAE. In order toEnvironmental Preservation Program for
Mahakam Delta
Since 2007, we have been working in conjunction with the United
Nations Development Programme (UNDP) on a five-year
environmental protection program in the Mahakam Delta on theisland of Kalimantan in Indonesia, and thus far have spent one
million dollars.
In the Mahakam Delta region, located around the Offshore
Mahakam Block where we operate, mangrove forests are aninvaluable type of vegetation that serves to both sustain
biodiversity and absorb CO2 from the surrounding area. The deltaregion is also important as a source of drinking water and as aconduit for the transport of natural resources. Many trees havebeen lost due to the encroachment of shrimp ponds around them,
however, and the water has been polluted by the use of chemicals
in the ponds.
The aim of this program is to restore and protect the mangrove
forests, but ultimately it is to ensure that the local community andgovernment can restore and protect the Mahakam Delta on theirown and achieve sustainable economic and social development.
Over the past three years, we have surveyed pilot farms,
engaged in public relations, conducted environmental training
sessions, analyzed the regional ecosystem, and planted 20,000
mangrove saplings. In fiscal 2010, we will continue to actively
provide support for this program.

Conserving Biodiversity

In order to build pipelines with environmentally friendly techniques,
we conduct environmental surveys before and after construction.
In September 2009, building of the Shin Oumi Line between thecities of Joetsu and Itoigawa in Niigata Prefecture was begun. A
preliminary survey revealed, however, that runoff from theconstruction of a tunnel might have a minor affect on river water
quality in the area and that construction noise might cause a minor
disturbance to some valuable species of birds of prey. During
construction, we implemented stringent quality management of
the runoff from the site to ensure that it was well within quality
standards. We also monitored the noise level near the site
continuously. In the end, the noise did not alter the behavioral
patterns of the birds of prey.
After construction, we closely monitored the environment in thesurrounding area for a certain length of time and confirmed that it
had not been altered frompre-construction conditions.
With these efforts, we consider
that we were able to keep the
impact of the construction on theriver water quality and theecosystem to the absolute
minimum.
Bird observation during construction

operate the oil field, we have been conducting an environmental
impact assessment since 1997 in accordance with UAE regulations
and the biodiversity strategy stipulated in the ADNOC service
regulations. The oil field is 1,200km2 in area, with an estimatedlifespan of over 100 years, making it one of the largest oil fields inthe world. Given the size of the field and its long-term
development and operation, it is imperative that we pay carefulattention to the surrounding
environment. Based on theenvironmental impact
assessment, we will continue
to monitor the habits of adiverse range of livingorganisms while developinga system that will enable us
to rapidly respond withmeasures to maintain andEnvironmental impact assessment
protect those habits.

Environment

Consideration for Ecosystems during
Natural Gas Pipeline Construction

Society

Society

Ensuring Operational Safety

Ensuring
Operational
SafetyAs an energy supply company, it is our responsibility toensure safe operations and remain fully prepared for
accidents

Ensuring Safe Operations
Safety initiatives
The INPEX Group has implemented a wide range of
precautionary measures to ensure safe operations at
headquarters and in Operational Organizations around theworld.
Each Operational Organization has drawn up an HSE
Management System Manual based on its particularsituation and in accordance with HSE Procedures for safety
management as well as various procedures for facility
integrity, risk assessment, security, and health maintenance.
We are undertaking activities based on these new manuals
while maintaining our standard safety protocol.
In fiscal 2009, members of senior management visitedproject sites in Japan to run HSE Sessions in an effort to raise
HSE awareness. We also conducted an HSE Awareness
Survey to ascertain the current state of HSE culture within
the INPEX Group. To improve health and safety performance,
we have continued to collect and analyze pertinent data,
and we engaged in benchmarking with other corporate
members of the International Association of Oil & Gas
Producers (OGP). In addition, we discussed numerical targets
to take effect from fiscal 2010. When accidents occur, we
strive to issue full reports and analyze the underlying causal
factors. We examine measures to prevent their recurrence
and promote their implementation throughout the Group.

Human error prevention: near-miss prevention
activities

prediction activities and share awareness of risk in our
pre-work meetings. Furthermore, we have embarked on an
information-sharing process in which some Operational
Organizations upload reports to a database of near-missprevention activities.
* Employees are encouraged to record small accidents that do not involve human or material
damage, but scare or startle employees at project sites and share their experiences with fellow
workers in order to prevent a small accident from becoming a serious one

Workplace Safety Education andTraining
In addition to education and training programs carriedout by the overall INPEX Group, our Operational
Organizations in Japan devise annual training plans for eachof their operational sites and provide on-the-job training for
employees. As well, each Operational Organization keeps
Employee Training Records in order to provide guidance
based on each employee’s level of understanding andproficiency. Site workers are provided hands-on training
with equipment, including simulation-based training andrisk prediction training, and participate in various externalseminars on systems audits, risk assessment, and othersubjects. Through these initiatives, we train our employees
to maintain a constant awareness of safety and seek toprevent error in equipment handing.
In addition, Operational Organizations conduct regularemergency response training on their own and jointly with
headquarters in accordance with emergency response plans
devised to outline procedures for a range of possible
emergencies.

Based on our objective of eliminating human error, ourOperational Organizations in Japan have been working on
near-miss prevention activities,* risk prediction, pointing andcalling, and other safety practices. In fiscal 2009, we began a
new undertaking. Focusing on the fact that many incidents
and near misses stem from human error, we invited anexpert to give a lecture on human factor engineering, andbased on this we have been discussing how we can avoid
unsafe situations and accidents within the overall
organization.
In addition, we have classified and organized our nearmiss prevention activities, internal rules, and case studies on
accidents to create original near-miss maps and charts thatshow the risk factors of tasks at a glance. We conduct risk
Plant tank fire response training

Preventing Work-related Incidents forGreater Safety

Upgrading HSE Management ofContractors

The INPEX Group has been collecting HSE-related data
since fiscal 2008 in accordance with the Corporate HSE
Procedure for HSE Performance Data, and defines
accident data based on the safety performanceindicators of the OGP, of which we are a member.
Number of Work-related Accidents per Fiscal Year
Fatal incident1 Lost time injury2 Restricted workday injury3 Medical treatment injury4

3

1

7

1

4

5

23
30

Overall1

76Company

0

0

1

3

Contractor

0

9

3

13

Overall

0

9

4

16

1. Incident involving a fatality
2. Incident involving a non-fatal injury that results in at least one day off work
3. Incident involving a non-fatal injury that results in restricted duties
4. Incident involving a non-fatal injury that requires treatment by a medical professional

We will continue our efforts to build our HSE
Management System and ensure its implementation
throughout the Group. In fiscal 2009, however, thenumber of fatal incidents and lost time injury frequency(LTIF) incidents at our contractors doubled compared tofiscal 2008, making us reconfirm the importance of HSE
management by our contractors. In fiscal 2010, we will
make every effort to work with our contractors toenhance HSE management and prevent accidents.

Flowchart of Contractor HSE Management(INPEX CORPORATION Contractors HSE Management)
HSE risk assessment

Accident Frequency by Fiscal Year

HSE requirements
LTIF

8.00

7.32

7.00

LTIF / TRIR

4.51

0.78

3.86

Company Contractor

2.67
0.96
Overall

Clarification of HSE responsibilities
b/w the company and contractors

8.00

Bid evaluation criteria

6.00

4.15
3.38

1.11

9.00
7.00

2.85

2.00
0.00

7.53

0.97
0.00
Company Contractor

1.20
Overall

Corrective actions in case of non-compliancewith HSE requirements(million hrs)

5.00
4.00
3.00
2.00

Hours worked

3.86

3.00
1.00

7.42

5.26

5.00
4.00

2

8.37

6.00

Hours worked

TRIR

1

(cases/million hrs)

Development of work plans (3.2)

Bid evaluation
Contractor HSE management system
Clarification of HSE responsibilities b/w
the company and contractors

Control of documentation ofwork plans, tending documents
and/or HSE requirements (3.2)

Managing contractor selection
processes through concluding
contracts (3.3)

1.00
0.00

FY2008FY2009
1. Lost time injury frequency (LTIF): Rate of injuries resulting in fatalities or losttime per million hours worked
2. Total recordable injury rate (TRIR): Rate of recordable injuries (fatalities, lost
time, restricted workdays, and medical treatment) per million hours worked

Kick-off meeting
Agreements on contractor HSE Plans, HSEprocedures and HSE monitoring programme

Pre-mobilization activities (3.4)

Confirmation of HSE Plans andHSE procedures
Monitoring of contractor HSE management

Mobilization (3.5)

Corrective actions
Monitoring of contractor HSE management
Corrective actions

Execution (3.6)

Review of HSE monitoring programme
HSE risk assessment against de-mobilization plans
Review of HSE plans and HSE procedures

De-mobilization (3.7)

Contractors’ maintenance of HSE management system
Review of controctors’ HSE management systems

Contractors’ regular health and safety meeting

Final evaluation and close-out (3.8)

Ensuring Operational Safety

FY20090

Contractor

Society

FY2008Company

The INPEX Group requires all contractors to manage their HSE
practices in accordance with our HSE Policy, and we work
closely with them in an effort to prevent work-related incidents
and reduce environmental impact. Accordingly, we have asked
our contractors to upgrade their HSE management practices.
Each Operational Organization has translated the Corporate
HSE Procedure for Contractors’ HSE Management into its own
Contractors’ HSE Management Manual that meets regional
requirements and the specific needs of particular projects.
In competitive bids, we evaluate and select contractors
based not only on their engineering expertise and costestimates but also on their HSE competence. We also request
contractors to develop and implement their own HSE plans
and manuals in an effort to share with them HSE risks andmanagement processes associated with the content of acontract. Furthermore, we monitor and evaluate contractors’
HSE performance against agreed-upon criteria during thecourse of contract work, and we ask them to improve theirperformance as necessary.
In fiscal 2009, we also began formulating the Policy on
Required HSE Specifications for Contractors as a set of morepractical guidelines than our HSE Procedures for Contractors.

Society

Society

Emergency Response System

Emergency
Response
SystemThe INPEX Group has a system in place to ensure
employee safety and business continuity in the eventof a disaster or emergency

Formulation of Business Continuity Plan
It is our mission to provide a safe and steady supply of natural
gas even if there was an outbreak of a potent strain of
influenza, based on the belief that we are an entity
supporting society by maintaining social functions. In fiscal
2009, we thus formulated a Business Continuity Plan (BCP) for
our natural gas business in Japan. The basic policy directionof the plan consists of three pillars: (1) to respect human life,(2) to prevent the spread of infection, and (3) to sustain social
functions.
Going forward, we intend to formulate BCPs not only forour natural gas business in Japan but for all our operations toensure continuity of sustaining our Company-wide functions.
In addition, both Corporate and the Operational
Organizations have devised a Corporate Emergency Response
Procedure to be followed in an emergency.

Emergency Response System to Deal with
Employee Safety Concerns and Fires
Continuing from the two drills we held in fiscal 2008, we
conducted three emergency response drills in fiscal 2009. The
third drill, held in June 2009, assumed a gas leak in a domestic
pipeline. The fourth drill, held in October 2009, assumed atank explosion at an Operational Organization managed by
the Domestic Project Division. The fifth drill, held in December
2009, assumed a kidnapping incident at an overseas site.
Emergency response drills are implemented jointly by the
Corporate Crisis Management Team and the sites where thedrills take place, and they aim to enhance emergency
response skills such as quick reporting, swift action, rescue
and evacuation, provision of equipment for emergency

Fourth emergency response drill: Tank explosion and fire at a plant (October 2009)

medical aid, dispatch of additional employees, and preventing
secondary emergencies. In fiscal 2010, we plan to continue
these drills and expand them to cover other potential crises.
The INPEX Group has also put in place a mobile phoneemail-based safety confirmation system designed to confirm
the safety of employees and assist in the quick recovery ofbusiness operations if a large-scale disaster occurs in Japan.
Since its introduction, we have conducted one exercise
almost every quarter; in fiscal 2009, we conducted four
exercises. The response rate for all these exercises topped
90%, and we will continue holding exercises with the aim ofachieving a 100% response rate.

Disaster Prevention Drills at INPEX
Headquarters
Twice a year, all of our headquarters employees participate inevacuation drills conducted by the Akasaka Biz Tower
Building. For our new employees, we conduct disasterprevention training sessions to familiarize them withearthquake response measures and raise their disasterprevention awareness.
In addition, we equipped every desk in headquarters(including Domestic Project Division) with a personal
emergency kit (to assist employees in reaching home) andreplaced our inventory with new items. We donated some ofthe existing food provisions to the Motherland Academy to
be sent to Africa as food aid.

H1N1 Influenza Response
After the worldwide outbreak of the H1N1 influenza virus,
WHO raised the warning level to Phase 4 on April 28, 2009.
On the same day, we established the Corporate Crisis
Management Team headed by the president. We collected
information and deliberated measures such as our handlingof overseas business trips, strict measures to prevent infection,and our response if widespread infection occurred. Once
decided, we communicated these measures to all domestic
and international Operational Organizations. We sent medical
masks and other sanitary supplies to employees in countries
with high risk of infection as a preventive effort. We also held
lectures with outside experts as lecturers to raise the level ofawareness.

Society
Employee
HealthManagement

We care about the physical and mental well-being of
our employees working in various environments insideand outside Japan

Health and Welfare

Health Maintenance Systems at
Operating Sites
The INPEX Group conducts health risk assessments for every
project in accordance with our Employee Health Maintenance
Procedures and takes necessary steps to reduce risk.
Sometimes we must conduct E&P activities in remote overseas
locations, including regions with high risks of infection andregions without an adequate medical infrastructure. In remotelocations such as these, we put medical staff in place andinstall medical facilities to ensure preparedness for
emergencies. We also conduct routine health maintenance forour site workers, engage in site sanitation, and strive toimprove workplace facilities to give our employees the peaceof mind they need to do their jobs. We have systems in place at
operations sites to handle injuries and sudden illnesses, and wecontract expert emergency medical companies to provide
sufficient medical care around-the-clock, including the
emergency transport of sick or injured workers by helicopter orcharter airplane.
In fiscal 2009, when we conducted a seismic survey inIndonesia, we also conducted a survey of local medical careconditions. We secured the services of a local physician who
accompanied us on the survey, held first-aid seminars, andSite medical facility

Chartered emergency medicaltransport airplane

Measures to Improve Employee Health
Maintenance
To improve employee health maintenance, we offer regular
medical checkups and provide assistance for lifestyle diseasecheckups for employees aged 30 and over and for complete
medical checkups for employees aged 35 and over. In addition,
we adopted a system that enables our employees to arrange
for checkups that fit their schedules via an online system. Ourcheckup rate is nearly 100%.
There are health nurses in the clinic at headquarters whooffer post-checkup health advice and provide employees withhealth information via the intranet. These measures seek toincrease employee awareness and knowledge of health issues.
In fiscal 2009, we installed a database to standardize andanalyze health checkup results in an effort to provide more
effective health guidance.

Mental Health Measures
We have adopted a self-service stress test tool that employees canuse to gauge their stress levels. Twice every year, we run mental
health awareness campaigns during which we encourage testing
to check employee stress levels, and we analyze the stress levels
for each organization. Our health staff provides extra care to
employees under high levels of stress as part of our effort to detect
stress and take appropriate measures at an early stage.
Employees can seek counseling services from an expert
company as well as advice from health nurses in the clinic at
headquarters. We also provide our employees with a wide array ofmental health support, including training sessions for managers.

Emergency medical transport
helicopter

Emergency medical transportmilitary helicopter

Employee Health Management

Since the INPEX Group’s operations extend well beyond Japan,
we are aware that health maintenance for employees who
work at our Operational Organizations around the globe is an
important issue for our long-term success.
We have enacted several measures to ensure that ouremployees, who work in widely different workplaces, arephysically and mentally healthy.

Societyindentified hospitals where advanced care was available toprepare for possible emergency patient transport.

Society

Society

Human Resources Management

Human
Resources
Management

We evaluate our employees fairly and train themproactively to develop human resources capable ofcompeting in the global arena

Basic Policy on Human Resources
Management System
We have established the following four-point Basic Policy on Our
Human Resources Management System as the cornerstone of asystem that contributes to the sustainable development of thecompany in our attempt to be a globally active integrated energy
company that represents Japan.
By operating a system based on this policy, we develop employee
capabilities and train human resources in order to improve individual
employee performance and teamwork. We generate a synergistic
effect sufficient enough to support our efforts toward becoming anorganization capable of competing in the global arena.
Basic Policy on Human Resources Management System
1. A system that encourages all employees to play their part and work
as a team to achieve higher organizational goals, contributing to thegrowth of the company.
2. A system that encourages all employees to gain a broader
perspective on work duties so as to identify issues, come up withsolutions on their own initiatives, and act responsibly.
3. A system that assists all employees in their determined efforts tocontinue to pursue self-development through work over an
extended period of time.
4. A system that is transparent and straightforward in recognizing theindividual contribution of employees to achieving corporate
objectives and in making them feel that they are rewarded fairly.

Employee Evaluation System
We have established an employee evaluation system to fairly
evaluate and reward our employees for achievement anddemonstration of capabilities, and we strive to operate it in an
equitable manner.
Our employee evaluation system consists of three evaluations: aperformance evaluation, a competency evaluation, and a value
evaluation. These evaluations are not merely one-way assessmentsof subordinates by their superiors; they also include tools such as an
Action Reflection Sheet and a Goals Challenge Sheet that ouremployees can use to complete a self-evaluation while reflecting on
their performance. Superiors and subordinates discuss each other’s
evaluations in face-to-face meetings to assess the gap between the
self-evaluation and the superior’s evaluation. The system is designed
so that improvements can be made to each type of evaluation,
thereby contributing to human resource development andeducation and boosting the credibility of the evaluation.
We also employ a self-report system under which our employees
can submit requests for new assignments and transfers once a year.
Although we cannot accommodate all requests, this gives thecompany a better understanding of the extent to which employees
think they are fit for their current assignments and what career paths
they wish to pursue, both of which are helpful for the company indeveloping plans for recruiting and allocating human resources.
To ensure that these systems take root in the company, we
provide line managers (i.e., personnel in charge of human resourcesand organizations) with practical training on conducting evaluations.
In fiscal 2009, we revised evaluation items based on employee
feedback and redesigned the Goals Challenge Sheet and otherevaluation sheets and held information sessions to explain thesechanges to our employees. In this manner, we are working to ensurethat the employee evaluation system permeates the entire
company.

Employee Training and Development
We provide our employees with training programs to develop a
global perspective and learn to contribute to greater corporate
values as leaders, and to upgrade their capabilities.
Primary training programs include programs tailored to individual
employee levels, language training, and on-the-job training at
offices and sites in Japan and overseas. We also have a self-learning
system to support employee learning in a variety of fields.
Furthermore, we have a mentor system for new employees inwhich senior employees provide one-on-one guidance on company
procedures and mental support for one year.

Details

Desired Results

Level
TailoredTraining

ProgramRank-based training for junioremployees, mid-level employees,
new managers, and executives
conducted at the time of promotion

To understand the roles of every
position, to increase awareness, andto acquire necessary skills

Language
Training

Short-term English training at a language
school in the UK for young employees

To improve international
communication skills

On-the-job Training
at Offices/Sites inJapan and Overseas

On-the-job training for young technicalemployees at domestic and overseas offices
or at sites inside and outside the company

To acquire basic knowledge, to attain the latest
specialized technical know-how, and to improve
the technical aptitude of mid-level employees

Overseas
OfficeTraining

Practical training for young clerical
workers at overseas offices

To acquire knowledge of overseas
business operations and to prepare
for future overseas postings

Leveraging Global Human Resources

As the INPEX Group’s Corporate Social Responsibility Policy
states, we value the individuality of employees and strive toprovide them with a friendly work environment andopportunities for career development. Accordingly, we havebeen proactive in hiring the physically challenged via jobplacement offices and other venues.
As of March 31, 2010, we employed 29 physically challenged
employees, 1.9% of the total workforce. We will continue tomake efforts in the future to employ as many physicallychallenged people as feasible.
Percentage of Physically Challenged Employees in Total Employment(persons) 35

30

Number of physically challenged
employees at the end of fiscal year

1.70
1.50

20

22
18

1.72

1.90

29

24

1.40
1.20

18

1.00

15

0.80
0.60

10

0.40

5
0

1.80
1.60

1.44

25

Percentage in total employment
at the end of fiscal year
2.00 (percentage)

0.20
2005

2006

2007

2008

2009

0.00

Labor-Management Council
Our management meets regularly with representatives of the
INPEX Labor Union to exchange views and ideas on a broad
range of issues including the challenges that the company
faces and the business outlook.
In fiscal 2009, we held two meetings—one in the first half ofthe fiscal year in July 2009, and the other in the second half inJanuary 2010—to cover the company’s management status
and overviews of and outlook for various projects. In addition,
we discussed labor-management topics such as the results of asurvey conducted by the Labor Union.

SystemActual Usage(FY2009)

Overview

Childcare leavesystemSystem to provide leave until a child reaches 18
months of age; 20% of salary is granted inaddition to statutory childcare leave benefits

11 employees* Females only

Reduced working
hours for childcare
systemUntil a child is in the fourth grade, employees can:(1) Work shorter than standard working hours(reduction of 2 hours)(2) Work on flex-time(3) Receive exemptions from working overtime or on days off

8 employeesChild healthcare
leave

System that allows employees to take special paid
leave to care for sick children under elementary
school age; employees receive up to 5 days for
one child and up to 10 days for two or morechildren, and may take leave in half day units* Newly
establishedin April 2010

Assistance for nurseryschools, day carecenters, and babysitters

Employees who have children aged three and under are eligible
to receive a partial subsidy for the startup fees and annual
expenses for nursery schools, day care centers, and babysitters

160 employees

Employees Statistics
As of March 31, 2010, the INPEX Group employed a total of
1,870 persons, over 80% of whom are male. Every year, we also
hire an average of 649 temporary employees, including local
contract employees to promote overseas development
projects and part-time staff, non-full-time contract staff, andworkers from employment service companies who engage inoil and natural gas-related activities in Japan.
INPEX CORPORATION alone employed 1,093 persons as ofMarch 31, 2010, and hires an average of 235 temporary
employees every year.
Number of Employees (Group)
Category

Male

FemaleTotal

Number of employees

1,618

252

1,870

Number of Employees (Unconsolidated)
Category

Male

FemaleTotal

Number of employees

935

158

1,093

Japan

857

142

999

Overseas

78

16

94

Work
regionAverage age

39.0 years

Average length of service

15.9 years

Fiscal 2009 Hiring Data (Unconsolidated)
Category

Male

FemaleTotal

New Grad hires

53

11

64

Mid-career hires

27

7

34

Human Resources Management

Employment Opportunities for
Physically Challenged

We have instituted a wider variety of support programs thanrequired by law to provide childcare assistance to ouremployees. We also put in place a general action plan as
required by Japan’s Law for Measures to Support theDevelopment of the Next Generation to help employees
maintain a balance between their work and childcare.

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We hire and train the people we need to get the job done
regardless of nationality. Highly specialized foreign staff
members work at both our overseas offices and our Tokyo
headquarters.
Since we expect to engage in long-term production anddevelopment projects, we hire local foreign nationals directly
to play an integral part in running our overseas offices. By
maintaining working conditions that give us a competitiveedge, we strive to secure loyal and enthusiastic employees andraise our employee retention rate.

Providing Childcare Support

Society

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Improving Natural Gas Supply Systems

Improving
Natural Gas
Supply Systems

We are increasing our natural gas production anddiversifying sources to meet growing demand as
we strive to provide a steady supply of energy

Increasing Production and Supply of
Natural Gas
System for steady supply of gas produced inJapan and LNG
The Minami Nagaoka Gas Field, our primary gas field located in
Nagaoka, Niigata Prefecture, has been increasing its production
capacity to meet the growing demand for natural gas since the
Koshijihara Plant became operational in 1984. The Oyazawa Plant,
the second plant in the gas field, began production in 1994, andadditional capacity has since been added to both plants,
resulting in a combined daily output of more than five million
normal cubic meters.
We have also been seeking to diversify sources of natural gas,
and in January 2010 began sourcing gas derived from imported
LNG from Shizuoka Gas Company using the Shizuoka Line. In July
2009, we began construction of the Naoetsu LNG Receiving
Terminal at Naoetsu Port, Niigata Prefecture. Upon completion of
the terminal in 2014, we will begin receiving natural gas derived
from LNG on the Sea of Japan side, which, coupled with LNG
coming through the Pacific coast and natural gas production
sites in Japan, will ensure that we provide an even more stablesupply of natural gas.

Expanding pipeline network
Since we began operating the Tokyo Line—the first longdistance high-pressure natural gas transportation pipeline built
in Japan—between Niigata and Tokyo in 1962, we have applied aseries of extensions and upgrades to the pipeline network, which
now boasts a total length of over 1,400km running coast-to-coastfrom the Sea of Japan to the Pacific Ocean.
More recently, we completed the third phase of the Shin Tokyo
Line in 2007, connecting Karuizawa (Nagano Prefecture) andTomioka (Gunma Prefecture) and thereby boosting ourtransportation capacity into the Kanto region. We also completed
the Shin Oumi Line in 2009, connecting the cities of Joetsu andItoigawa in Niigata Prefecture and expanding transportation
capacity to the area around Itoigawa. By adding the ability totransport natural gas derived from LNG from the Pacific coast
through the Shizuoka Line and the Minamifuji Pipeline (fromJanuary 2010), we have significantly increased the gastransportation capacity of our entire pipeline network.
Since the demand for natural gas is expected to increasesteadily, we will continue our efforts to meet the demand byimproving our facilities based on a rational plan.

Reliable and Flexible Supply of Gas
Using Underground Storage System
Natural gas can be injected into a depleted gas or oil reservoir forstorage. The advantages of storing natural gas undergroundcompared to storage in an artificial subsurface facility are that it
has higher survivability when earthquakes occur, and is simple tooperate for long-term storage. Underground storage’s manyother advantages include the ability to supply natural gas inresponse to seasonal fluctuations and periods of peak demand.
Our Domestic Project Division has been storing natural gas
underground in the Sekihara Gas Field in Nagaoka, Niigata
Prefecture, since July 1968 to respond better to seasonal
fluctuations in demand. We upgraded the facility at the Sekihara
Plant in January 2008 to increase the daily output of gas from 1.6
million normal cubic meters to 2.4 million normal cubic meters.
Our pipeline network expanded when an extension to theShin Nagaoka Line was completed in December 2007,
connecting the Sekihara Plant and the Oyazawa Plant. This has
strengthened the function of the Sekihara Plant as a ba ckup
when either the Koshijihara Plant or the Oyazawa Plant is closed,or during periods of peak demand, allowing us to provide anuninterrupted and flexible supply of gas. As of March 2010, we
had 210 million normal cubic meters of gas stored underground.
Niigata

Sekihara
Gas Field

LNG

Naoetsu LNG
Receiving Terminal

Niigata Pref.

(undergroundstorage)

NagaokaMinami Nagaoka Gas Field(under construction)

Shin Oumi Line Joetsu

Natural gas produced
in JapanItoigawa

Tochigi Pref.
Gunma Pref.

NaganoRyomo Line

Tokyo Line

Matsumoto Line

Karuizawa

Shin Tokyo Line
Suwa

Nagano Pref.

Second Suruga
Trunk Pipeline

Honjo

Iruma Line
Kofu Line

LNG(vaporized gas)

Kofu
Showa

Shizuoka Gas

Fuji

Shimizu LNG
Sodeshi Terminal

Ome

KonosuSaitama
Pref.
Tokyo

Yamanashi Pref.

Shizuoka Line
Gotemba

Minamifuji Pipeline
INPEX/Shizuoka Gas/
Tokyo Gas

Shizuoka

Shizuoka Pref.
LNG

Pipeline map

Sano

TomiokaMatsumotoChiba Pref.

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Improving
Product Safety
and Services

We strive to build a safe, environmentally conscious
natural gas supply system and a system of services tokeep our customers satisfied

Keeping Pipelines in Good Condition
Keeping our pipelines—which stretch a total length of over
1,400km in Japan—in good working condition is a criticalduty we have to fulfill in order to supply natural gas to ourcustomers safely and securely. To accomplish this, Teiseki
Pipeline Co., Ltd. (TPC), an INPEX Group company, conducts
visual inspections of the pipelines at least twice a week, andconducts routine physical diagnostics to look for leaks orsigns of corrosion. We also run emergency patrols to checkpipelines when more than standard rainfall (140mm/day)has been recorded or when there is an earthquake ofintensity 4 or higher on the Japanese scale.
In addition, to prevent accidents during pipeline
construction projects that contractors undertake, we brief
all staff members and other workers at construction sites onsafety precautions and case studies on accidents that haveoccurred at other exploration sites. We also compile casestudies on past accidents to learn from them.
Furthermore, we apply the Manual for Contractors’ HSE
Management to contractors working on our pipeline
construction projects. Based on this manual, we assess

Listening to Customers
The INPEX Group runs several gas stations in Niigata andNagano prefectures that bear our company logo, and wehave conducted a summer campaign at these stations
every year since fiscal 2005. In fiscal 2009, we conducted acampaign from mid-July through mid-August and asked
our customers to complete questionnaires. Their replies toquestions about personal characteristics (age, gender, etc.),
how often and why they use our gas stations, and how they
feel about our customer service have allowed us to obtain
invaluable feedback for gas station management.
After the campaign, we hold a seminar for staff members
from our gas stations and distributors. An invited speakergives a presentation, and participants reflect on the
campaign in an effort to improve their customer service.
We will continue to work with our gas stations to conduct
initiatives like these to meet customer needs and accurately
monitor trends in gas station management. In doing so, we
aim to manage even better gas stations firmly rooted intheir communities.

Publishing GHS-compliant MSDSs
In accordance with United Nations’ recommendations
concerning Globally Harmonized System of Classificationand Labeling of Chemicals (GHS)1 and in light of thesubstances stipulated in Japan’s PRTR Act and the Industrial
Safety and Health Act, we analyzed the contents of ourdomestically produced natural gas, crude oil, andpetroleum products and updated our Material Safety Data
Sheet (MSDS).2
1. A system for standardizing the classification and labeling of hazardous chemicals
2. This document contains information needed for the safe handling of products that containcertain chemical substances

Improving Product Safety and Services

The oil and natural gas products we sell through ourbusinesses in Japan are composed primarily of crude oiland natural gas produced from oil and gas fields in Japan.
The INPEX Group’s refining companies refine the crude oil
we produce into a variety of petroleum products which arethen loaded into tanker trucks and ships at our loading
facilities for shipment to our customers. Natural gas
produced from our oil and gas fields is refined and turned
into products before being transported and sold to ourcustomers via our pipeline network. Regarding the safety ofoil and natural gas products we load and sell, we adhere to
all pertinent laws as well as our own safety standards andproduct specifications. We also conduct strict inspections
during the refining, loading, and transportation processes.
In this way, we have put into place a safety management
system that allows us to provide our customers withproducts they can use with peace of mind.

plausible risks and conduct solo or joint HSE Audits andsafety patrols. We also verify that contractors are incompliance with risk countermeasures and the agreed
upon content of the HSE Plans. With this system in place,
we can constantly maintain an appropriate level of safety.

SocietyThorough Management of Product
SafetySociety

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Fair Trade

Fair Trade

We will strive harder for fair and responsible
procurement with an eye on future large-scale projects

Strict Adherence to Procurement Ethics
Guidelines
We strive to procure goods from our suppliers in a transparent,
fair and responsible manner and have established the
Guidelines for Fair Business Conduct with Suppliers andContractors. The guidelines prohibit practices that would
impede fair and free competition, abuse dominant bargaining
positions, or inappropriately bestow or receive benefits. In
addition, they stipulate the protection of confidentiality
regarding suppliers’ personal information and technologies. All
departments involved in procurement adhere to theseguidelines as their guiding principles.
When selecting suppliers, we always strive to ensure
opportunities for the fair and open participation of prospective
suppliers. In the evaluation phase, we assess not only
technological capacity, quality, and credibility, but also theenvironmental and security-related initiatives of suppliers andtheir corporate social responsibility activities.
When accepting bids and orders for large-scale projects inJapan, such as the Naoetsu LNG Receiving Terminal, we apply
the Guidelines for Fair Business Conduct with Suppliers andContractors to ensure
fair and responsible
procurement.
For international
projects, we are
currently formulating
detailed guidelines
pertaining toprocurement ethics in

Naoetsu LNG Receiving Terminal construction site

Guidelines for Fair Business Conduct
with Suppliers and Contractors

light of global standards and in anticipation of procurements
for future large-scale projects.

Ensuring Fair Trade Practices
To ensure that every employee is aware of our regulations, wepublish a rulebook via the intranet that contains the Guidelines
for Fair Business Conduct with Suppliers and Contractors, theDetailed Regulations for Procurement, and the Procedure for
Handling Procurement.
In the logistics division, directly responsible for sourcing
materials and equipment, all employees refer to the guidelines,
detailed regulations, and procedure along with a compliancemanual to refresh their understanding of these rules, which callfor transparent, fair, and responsible procurement practices.
Going forward, the procurement division will strive for fairtransactions by providing thorough information on our fairtrading practices and working to further stimulate the principleof competition, especially concerning large-scale projects.

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Information
Disclosure

We actively disclose information and engage ininvestor relations to improve the transparency andaccountability of management

Major IR Activities in Fiscal 2009
In fiscal 2009, we held two briefing sessions with financial
analysts and institutional investors to report financial results
and held the first information session on our large-scale
LNG project. We also offered one project site tour for
analysts and investors and held 588 investor relations (IR)meetings in Japan and overseas. In light of the recent
increase in the percentage of shares held by foreign
shareholders, we have enhanced our English-language
materials and bolstered our IR activities overseas. As a result,over half of our meetings were held for foreign investors.
In addition to IR exhibitions, our IR activities for individual
investors in fiscal 2009 included 15 information sessions
held in six cities around Japan with over 1,500 investors inattendance. We are also working on revamping our website
and updating our information pamphlets for individualCompany information session
for individual investors

On-Site Public Hearing on the Abadi
Project in Indonesia
We are conducting environmental and social impact
assessments for the Abadi Gas Field development project
we are undertaking in Indonesia. As part of this effort, we
invited about 70 local officials and residents to attend apublic hearing held in the city of Saumlaki in the Tanimbar
Islands in November 2009. We gave an overview of the
project, explained our social and environmental measures,and held a discussion with the local participants. Based on
the points raised during the public hearing, we will disclose
information in an easy-to-understand and timely mannerfrom the viewpoint of the local residents. We will strive tooperate a transparent project the local community canunderstand and cooperate with.

Information Disclosure

Our Corporate Social Responsibility Policy dictates that we
communicate promptly and openly with shareholders,
suppliers, business partners, and other stakeholders. Basedon this policy, we disclose corporate information in a timely,
appropriate, and fair manner through investor relations
activities, general shareholders’ meetings, the company
website, and public relations outreach. Doing so ensures
the transparency and accountability of management andwe constantly strive to improve on these initiatives.
Regarding our internal frameworks we have named thehead of the Corporate Strategy & Planning Division as theofficial in charge of information disclosure and established
the Corporate Communications Unit as a body devoted to
information disclosure. Regarding procedures for disclosure,the Rules for Corporate Information Disclosure stipulates
processes for Group-wide collection, management,
communication, and disclosure of information, but we also
take every opportunity to increase awareness of these rules
in an effort to prevent information leaks and insider trading.
Details regarding information disclosure conducted inaccordance with these rules are available on our website as
our Disclosure Policy.

investors.
Since our founding, we have issued notices of generalshareholders’ meetings on our website and have posted
links on the website of our shareholders’ list administrator.
Before the meetings, we play videos and slideshows
showcasing our activities, and in recent years we havestarted preparing and posting meeting notices in English
on our website. We also try to avoid holding meetings ondays when other general shareholders’ meetings are held inan effort to convene open general meetings. Since ourfourth regular general shareholders’ meeting held in June
2010, we have added online voting to our regular methodof using paper ballots and adopted an electronic voting
platform for our institutional investors to improve usability
for all our shareholders.
We have conducted a shareholder survey annually since
fiscal 2006. Since fiscal 2008, we have also conducted a CSRincentive questionnaire in which the number of responses
from shareholders determines how much we donate to anature conservation group.
In fiscal 2009, this projectyielded ¥228,200, which
we donated to the
Keidanren Nature
Conservation Fund.

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Policies and Frameworks for Information
DisclosureSociety

SocietyCommunity Support

Community
SupportWe conduct a variety of programs that contribute to
the sustainable development of the areas where we
operate projects

Emirati Children Accepted into Abu
Dhabi Japanese School
To respond to a request from Sheikh Muhammad of Abu
Dhabi at the end of 2004, the Abu Dhabi Japanese
School (includes kindergarten), with assistance from theJapanese government, accepts two children of UAE
citizenship every year. As of May 2010, there were nine
local children attending the school. In Abu Dhabi, ouremployees serve on the school board to assist in running
the school. In Japan, we also cooperate with otherJapanese companies tosend Japanese teachers
to educate the Emirati
children in thekindergarten and teachthem Japanese andmathematics in theelementary school. It is
our sincere hope that
someday these children
will serve as bridges
between Japan and theJapanese School in Abu Dhabi
UAE.

Support for Vocational School in
Outskirts of Darwin
INPEX Browse Ltd., an INPEX Group company, donated2.28 million Australian dollars to help build a vocational
school in Darwin, Northern Territory, Australia, theproposed site for the liquefied natural gas (LNG) plant for
the Ichthys Project. This school will be built on 12ha ofland in the outskirts of Darwin and is scheduled to open
in the second half of 2010. The aim is to increase
employment
opportunities byoffering theyouth of Darwin,
includingaboriginal
children, a chance
to attend thisvocational school. Pledging aid for a vocational school

Through this assistance we hope to contribute to the
local community by way of human resources
development.

Cleanup for Venezuelan Harbor
Dredging Project
PT Moruy II, S.A., an operating company that we partiallyown, planned to dredge the Zazarida Fishing Harbor
located in the Moruy II Block. As part of this project, thecompany conducted a cleanup of the nearby Chuadi
Creek from November 2009 through January 2010. For
this cleanup, PT Moruy II hired 50 local residents tocollect trash from the creek, install garbage cans, anderect signs askingthat waste not be
dumped in thecreek. The
company also
held seminars on
the proper
handling anddisposal of waste.
Some participants in dredging projectContributing Economically and Socially to Regional
Development along BTC Pipeline RouteAs part of the Baku-Tbilisi-Ceyhan (BTC) Pipeline
Project, we are engaged in community investment
programs (CIP) to improve living standards in thecommunities through which the pipeline passes. In fiscal
2009, we spent a total of US$4.38 million in Azerbaijan,
Georgia, and Turkey. We engage in discussions with stateand local
governments andNGOs to determine
detailed measuresfor devising andimplementing CIP
Plans.

Scene of irrigation project in Georgia

Society
Donations
andSponsorship

We actively communicate with local communities in
the hope of contributing to the development of thecountries and regions in which we operate

INPEX Browse Ltd. donated 15,000 Australian dollars to the
Djarindjin Lombadina Catholic School, located outside Broome,
Western Australia, withapproximately 70 aboriginal
students (aged 6–17). The
donation enabled the school tooffer exchange programs withschools in Melbourne and Perth,
run a vocational training
program, and give students
Students in Djarindjin
workplace experience.
Lombadina Catholic School

A city marathon along Mindil Beach is held in Darwin, NT,
Australia every year to coincide with Australia Day celebrations.
A popular annual event, the marathon held in January 2010
attracted about 5,000 participants—the highest number
ever—who walked 3km and 5km courses, or ran a fullmarathon. The events aim forparticipation by ordinary
citizens and wins strong support
every year. INPEX Browse
supports this local city
marathon as an event sponsor,
thus assisting in community
activities of the area’s residents.

Damage Relief Funds for Areas Struck byWest Sumatra Padang Earthquake
On September 30, 2009, a massive earthquake struck off thecost of Padang in West Sumatra, Indonesia, killing and injuring
an estimated 4,000 persons. Having operated in Indonesia forover 40 years, we donated US$500,000 through the Indonesian
Red Cross with the hope that the area would recover as quickly
as possible. An additional ¥1 million in donations was collected
via the Japan-Indonesia
Association and the Indonesian
government (Ministry of Minesand Energy). Our employees
also made donations. All
donations were contributed to
the relief effort through theIndonesian Red Cross.
INPEX donation toIndonesian Red Cross

Sponsorship of Northern Territory
Football ClubINPEX Browse is working to strengthen friendly ties with thecommunities in Northern Territory, Australia, by sponsoring the
local Australian football club, NT Thunder. One objective of the
NT Thunder is to inspire young Indigenous people toparticipate in sports, and it has trained and developed many
aboriginal players.

Volunteers at the marathon site

“Energy Security and the Environment”
Endowed Course at University of Tokyo
Graduate School of Public Policy
In April 2010, INPEX CORPORATION and the University of Tokyo
Graduate School of Public Policy launched a three-year
endowed course entitled “Energy Security and theEnvironment” with the aim of cultivating human resources
with in-depth knowledge concerning the increasingly
important fields of energy security and environmental issues.
This course will consist of lectures on energy andenvironmental policy and seminars to explore important global
energy and environmental issues. An international symposium
is also being considered.

Sponsorship of National Sports Festival
and National Sports Festival for Disabled
We were an official supplier for the National Sports Festival andNational Sports Festival for the
Disabled held in Niigata.
Approximately 200 employees
volunteered to assist in festival
management and individual
events.
INPEX employees donned
mascot costumes

Donations and Sponsorship

Sponsorship of Australian City Marathon

Society

Donation to Catholic School in Australia

CSR & Environment Online 2010: Table of Contents
Society

Top Management Commitment
Mission, Corporate Social Responsibility Policy and Code of Conduct

Ensuring Operational
SafetyRelationships with Major Stakeholders
Overview of Our Corporate GovernanceInternal Control System

Compliance

Compliance Policy and System
Compliance Training
Help-Line System
Measures to Improve Information Security Management

AwardsEmployee HealthManagement

Health and Welfare
Health Maintenance Systems at Operating Sites
Measures to Improve Employee Health Maintenance
Mental Health Measures

Human Resources
Management

Basic Policy on Human Resources Management System
Employee Evaluation System
Employee Training and Development
Leveraging Global Human Resources
Employment Opportunities for Physically Challenged
Labor-Management Council
Providing Childcare Support
Employees Statistics

Improving Natural
Gas Supply Systems

Increasing Production and Supply of Natural Gas
Reliable and Flexible Supply of Gas Using Underground Storage System

Improving Product
Safety and Services

Thorough Management of Product Safety
Keeping Pipelines in Good Condition
Listening to Customers
Publishing GHS-compliant MSDSs

Fair Trade

Strict Adherence to Procurement Ethics Guidelines
Ensuring Fair Trade Practices

Information
Disclosure

Policies and Frameworks for Information Disclosure
Major IR Activities in Fiscal 2009
On-Site Public Hearing on the Abadi Project in Indonesia

Community Support

Emirati Children Accepted into Abu Dhabi Japanese School
Support for Vocational School in Outskirts of Darwin
Cleanup for Venezuelan Harbor Dredging ProjectContributing Economically and Socially to Regional Development along BTC Pipeline RouteFor
details

CSR Issues in Our
Business Operations
and Consideration for
Our Stakeholders

Acquisition of License Blocks
Exploration and Evaluation
Development and Production
Refining, Shipment and Sales

Seeking Coexistence
and Mutual Prosperity
with Oil and Gas
Producing Countries

Activity 1: Cultural Exchanges to Deepen Mutual
Understanding between Japan and Host Countries
Activity 2: Social and Economic Improvement Projects for Communities
Activity 3: Community Relations Programs
Activity 4: Keeping Stakeholders Informed of Our Businessysite onleb

Environment
Environmental Impact Resulting from Our Business Activities

eb

Pollution Prevention

Measures to Prevent Soil Contamination
Environmental Accident Prevention and Countermeasures
INPEX Joins Alliance to Prevent Oil Contamination in Caspian and Black Seas
Controlling Chemical Substances and Checking for Emissions to Atmosphere
Reducing Volatile Organic Compound Emissions (VOCs)
Proper Management of Asbestos Containing Materials and PCB Waste
INPEX Wins 2009 APPEA Environment Award“Energy Security and the Environment”
Endowed Course at University of Tokyo Graduate School of Public Policy
Sponsorship of National Sports Festival and National Sports Festival for Disabled
Sponsorship of SEAAOC 2009 Gala Dinner
Donations for Exchange Students from Simón Bolívar University
Donating Iodine to Cambodia

Third Party Comments / Response to Third Party Comments

Consideration for Ecosystems during Natural Gas Pipeline Construction
Environmental Impact Assessment in Abu Dhabi
Environmental Preservation Program for Mahakam Delta

Editorial Policy

INPEX Fiscal 2009 Data by Site
Domestic Data by Site

W

Industrial Waste Measures
Managing Wastewater Discharged into Public Water Bodies
Effective Utilization of Resources in Our Offices

GRI Guidelines Chart

CSR Report Downloadsite onlebyData by Site

Donation to Catholic School in Australia
Damage Relief Funds for Areas Struck by West Sumatra Padang Earthquake
Sponsorship of Northern Territory Football Club
Sponsorship of Australian City Marathon

Questionnairesite onlebsite onlebyConserving
Biodiversity

Donations andSponsorshipyAdvancing Research into CO2 Capture and Storage to Prevent Global Warming
Developing Next-Generation Fuels
Joint Research on CO2 EOR at Offshore Abu Dhabi
Producing Methane in Depleted Oil Fields Using Microbes
Basic Research of Technologies to Generate Methane with Photocatalytic Reactionssite onlebyDevelopment ofTechnologies to
ReduceEnvironmental Impact

Resource Saving

Aid for Aborigines Involved in Djarindjin-Lombadina
Airport Project in Australia
Training in Japan for Copa Macoya Production OperatorslyContracting of Drilling Work for Development ofGeothermal Power that Utilizes Geothermal Resources

W

Reducing Greenhouse Gas Emissions
Nippon Keidanren Voluntary Action Plan on Environment
Achieved Our Target in a Prototype Project for Voluntary Domestic Emissions Trading Scheme
Cargo Transportation Reporting
Forestation Project in Australiasite onW

Future of CSR Activities
Interview with Experts

W

What Kind of CSR Should
the INPEX Group Undertake?

W

Formulation of Business Continuity Plan
Emergency Response System to Deal with Employee Safety Concerns and Fires
Disaster Prevention Drills at INPEX Headquarters
H1N1 Influenza ResponseW

Message from Director in charge of HSE
Overview of HSE Management System
Initiatives for Promoting and Implementing HSE Management System
Formulating HSE Procedures and Policies
HSE AuditingFor
details
HSE Training and Awareness-Raising
Corporate HSE Objectives

Emergency Response
SystemSpecial Features

Preventive Measuresagainst Global
Warmingy

HSE Management
SystemW

Corporate Governance

Ensuring Safe Operations
Workplace Safety Education and Training
Preventing Work-related Incidents for Greater Safetysite onleb
Upgrading HSE Management of Contractors

Third Party Comments on CSR Report 2010
Toshihiko Goto
Chief Executive
Sustainability Forum Japan

It is highly commendable that the President’s commitment
outlined in the preface covers the entire range of issues thatface the INPEX Group as an integrated energy company. I
think it would be even better if this commitment included anultra long-term vision out to 2050. In any case, the greatest
challenge for the Group is how to act on these issues.
The report discusses the Group’s “Relationships with
Stakeholders,” but given that the Group is a resource
development company, I think this list should include thenatural or global environment as its biggest stakeholder.
The Group expects its employees to have high motive
and moral values, and, as such, it provides a considerable
amount of training. However, training for local employees,
contract staff, and part-time staff in operating regions,however, does not stand out clearly. In particular, the reportstates the strengthening of contractors’ HSE Management by
Operating Organizations, but questions remain about
whether or not the efforts are sufficient. More informationfrom the Check and Act phases of the PDCA Cycle would beappreciated. This kind of training and HSE Management forOperational Organizations are extremely important from thestandpoint of risk management for resource development.
The energy industry is one where even the oil giant BP is
subject to acquisition due to a single accident. INPEX should
not become complacent. For that sake, I regard acquiring ISO
14001 and other management systems certifications to bealso important. If the company has not considered thisoption, I strongly recommend it. I am confident that a checkby experts would bolster the INPEX Group’s HSEmanagement capacity.

I felt there were a few discrepancies between the
Corporate HSE Objectives and the President’s commitment.
For instance, as the world is gripped by the oil spill in the Gulf
of Mexico, the Group’s current safety initiatives do not comeacross in the document as being extremely advanced. In
addition, I cannot clearly see how the Group is strengthening
safety measures for new project development. Goingforward, I consider that a demand for unprecedented safetymeasures in development will be inevitable.
The idea that to fulfill a company’s businesses is its
corporate social responsibility is correct in a way. But theleaders of the world have already pledged to halve CO2
emissions by 2050. What will INPEX’s mission be at that time?
Therefore, as I mentioned above, the report should containan ultra long-term vision and objectives. In this respect, I
hope the Group will elaborate detailed and visible polices
and initiatives for renewable energy.
The Group monitors CO2 emissions with its
environmental activities, but sooner or later the need willarise to confirm emissions stemming from international
distribution. In addition, the Climate Disclosure Standard
Board (CDSB) will publish templates in the near future. Bothof these initiatives are expected to become mandatory, and I
recommend that the Group research and implement them.
The Group should not merely “explore possibilities” on its
own for the effective use of separated CO2, including the useof underground microbes and photocatalytic reactions. There
are high expectations for the company to collaborate withindustry and other entities to jointly research and successfully
develop effective uses of CO2.
I believe the key to global peace and security, the basis
for the continuity of business, is to preserve and enhance
cultural diversity. The Group is engaged in a wide array ofactivities, but is there a fundamental policy on which theseare based? I would like the Group to make this policy visible
together with a policy for benefits sharing with the regions
where resources are extracted.

Response to Third Party Comments
I am grateful to Mr. Goto for his invaluable feedback concerning our CSR Report. We are in the business ofproviding energy, and our business is rooted in global resources. We are aware of our mission to provide a
steady and efficient supply of energy while keeping the global environment in mind. We make every effort to

Katsujiro Kida
Director,
Executive Vice President
in charge of CSR

ensure environmentally friendly and safe operations. In 2003 the Nagaoka Field Office obtained ISO 14001
certification, and we developed our HSE Management System as an extension of this. We have also striven toeliminate human error in an effort to prevent accidents and have conducted emergency response drills to
prepare for the event of an accident.
We treat the formulation of an ultra long-term vision, the clarification of our CSR policy, and other points
mentioned by Mr. Goto as important issues for the future of our business operations, and we will continue
striving to be an integrated energy company that sustains society and the lifestyles of people.

Research & CSR Group
Corporate Strategy & Planning Unit
Akasaka Biz Tower 32nd Floor
5-3-1 Akasaka, Minato-ku, Tokyo, JAPAN 107-6332
Phone: +81-3-5572-0231
http://www.inpex.co.jp/english/index.html
Publication Date: October 2010
(The last report was published in November 2009.
The next report is scheduled for publication in October 2011.)

Paper used in this report is produced from fiber sourced from well-managed
forests and other forests where unacceptable sources have been excluded, as
defined by the Forest Stewardship Council.
Printed using vegetable oil-based ink that does not release volatile organic
compounds (VOCs), and waterless processes that do not involve harmfulwastewater emissions.