Financial results for the six months ended June 30, 2020

Appendix
INPEX CORPORATION
August 7, 2020

Subsidiaries and Affiliates

65 Consolidated Subsidiaries
Major Subsidiaries

Country / Region

Ownership

Phase

Accounting Term

Japan Oil Development Co., Ltd.

UAE

100%

Production

December

JODCO Onshore Limited

UAE

51 %

Production

December

JODCO Lower Zakum Limited

UAE

100%

Production

December

INPEX Sahul, Ltd.

Timor‐Leste

100%

Production

December

INPEX Ichthys Pty Ltd

Australia

100%

Production

December

INPEX Southwest Caspian Sea, Ltd.

Azerbaijan

51%

Production

December

INPEX North Caspian Sea, Ltd.

Kazakhstan

51%

Production

December

INPEX Oil & Gas Australia Pty Ltd

Australia

100%

Production

December

INPEX Eagle Ford, LLC

United States

100%

Production

December

Ownership

Phase

Accounting Term

20 Equity Method Affiliates
Major Affiliates

Country / Region

MI Berau B.V.

Indonesia

44%

Production

DecemberAngola Block 14 B.V.

Angola49.99%

Production

DecemberIchthys LNG Pty Ltd

Australia

66.245%

Production

December

Copyright © 2020 INPEX CORPORATION. All rights reserved.

1

Segment Information
 For the six months ended June 30, 2020 (January 1, 2020 to June 30, 2020)(Millions of yen)
Reportable segments
Asia &
Oceania

Eurasia(Europe &NIS)

Middle East
& Africa

Americas63,147

119,527

29,541

175,029

7,943

12,56531,937(1,580)89,621(2,431)Japan
Net sales
Segment income(loss)

Adjustments *1

Consolidated *2

395,190(3,507)

391,683

130,111(6,312)

123,799

Total*1 Adjustments of segment income of ¥(6,312) million are corporate expenses. Corporate expenses are mainly amortization of goodwill that are notallocated to a reportable segment and general administrative expenses.
*2 Segment income is reconciled with operating income on the consolidated statement of income.

Copyright © 2020 INPEX CORPORATION. All rights reserved.

2

LPG Sales(Reference)
Same Period Last Year(Jan ‐ June ’19)

2Q FY2020(Jan ‐ June ’20)

Net sales (Billions of yen)

1.3

1.4

0.0

6.2%

Sales volume (thousand bbl)

Change% Change

152

160

9

5.6%

Average unit price of overseas production($/bbl)

44.86

35.13

(9.73)(21.7%)

Average unit price of domestic production(¥/kg)

69.79

61.35

(8.44)(12.1%)

Average exchange rate (¥/$)

110.14108.03

2.11yenappreciation

1.9%
appreciation

Change% Change

Sales volume by region(Reference)
Same Period Last Year(thousand bbl)

(Jan ‐ June ’19)

2Q FY2020(Jan ‐ June ’20)

Japan

2
(0.2 thousand ton)1
(0.1 thousand ton)(0)(‐0.0 thousand ton)

(25.5%)

Asia & Oceania

150

159

9

6.0%

Eurasia (Europe & NIS)

‐

‐

‐

‐

Middle East & Africa

‐

‐

‐

‐

Americas

‐

‐

‐

‐

152

160

9

5.6%

Total

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3

Other Income and Expenses(Billions of Yen)

(Reference)
Same Period Last Year(Jan ‐ June ’19)

2Q FY2020(Jan ‐ June ’20)

Change% Change

Other income

23.2

45.3

22.1

95.2%

Interest income

1.7

0.5

(1.2)

(67.1%)

Dividend income

6.4

5.9

(0.4)

(7.6%)

Equity in earnings of affiliates

9.5

30.7

21.1

222.8%

‐

3.7

3.7

‐

Other

5.5

4.4

(1.0)

(19.4%)

Other expenses

21.6

19.9

(1.7)

(8.1%)

Interest expense

13.4

11.5

(1.9)

(14.4%)

‐

2.2

2.2

‐

Provision for exploration projects

0.2

‐

(0.2)

(100.0%)Foreign exchange loss

5.6

‐

(5.6)

(100.0%)

Other

2.3

6.1

3.7

158.4%

Foreign exchange gain

Provision for allowance for recoverable accounts
under production sharing

Copyright © 2020 INPEX CORPORATION. All rights reserved.

4

EBIDAX(Millions of yen)
Net income attributable to owners of parent

2Q FY2020(Reference)(Jan ‐ June ’20) Apr ‐ Sep ’19

Note(120,799)

69,487

P/L

(655)

1,911

P/L

107,120

105,770

Depreciation and amortization

88,84883,047C/F Depreciation under concession agreements and G&A

Amortization of goodwill

3,380

3,380

C/F

Recovery of recoverable accounts under
production sharing (capital expenditures)

14,892

19,343C/F Depreciation under PS contracts

6,925

13,551

Exploration expenses

4,692

11,642

P/L Exploration expense under concession agreements

Provision for allowance for recoverable
accounts under production sharing

2,233

1,909

P/L Exploration expense under PS contracts

175,982

496

Income taxes‐deferred(13,147)(1,156)

P/L

Foreign exchange loss (gain)(3,320)

1,652

C/F

Impairment loss

192,449‐

C/F

Net interest expense after tax

7,877

9,070

176,450

200,285

Net income (loss) attributable to non‐controllinginterests
Depreciation equivalent amount

Exploration cost equivalent amountMaterial non‐cash items

EBIDAX

Copyright © 2020 INPEX CORPORATION. All rights reserved.

P/L After‐tax interest expense minus interest income5Analysis of Recoverable Accounts under Production Sharing

2Q FY2020(Reference)(Jan ‐ June ’20)

Apr ‐ Sep ’19

568,377

568,059

Exploration costs

2,248

1,950

Mainly Iraq Block10

Development costs

14,744

15,893Mainly ACG, Kashagan and Con Son

Operating expenses

7,650

9,138

Mainly ACG and Kashagan

Other

3,997

5,396

Cost recovery (CAPEX)

14,892

19,343Mainly ACG and Kashagan

Cost recovery (non‐CAPEX)

8,669

7,853

Mainly ACG and Kashagan

‐

2,177

Balance at end of the period

573,456

571,063

Less allowance for recoverable accounts under
production sharing at end of the period

69,10869,765(Millions of yen)
Balance at beginning of the period
Add:

Less:

Other

Note

Mainly Kashagan

Copyright © 2020 INPEX CORPORATION. All rights reserved.

6

Oil Price and Foreign Exchange Sensitivities
 Sensitivities of crude oil price and foreign exchange fluctuation on consolidated net
income attributable to owners of parent for the year ending December 31, 2020*1(Billions of yen)

At the Beginning of the 1Q : +6.5 (‐6.5)
Brent Crude Oil Price;$1/bbl increase (decrease)*2
Exchange Rate; ¥1 depreciation(appreciation) against the U.S. dollar*3

The impact on net income will change in FY2020 as below;
At the beginning of the 2Q : +4.5 (‐4.5)
At the beginning of the 3Q : +2.5 (‐2.5)
At the beginning of the 4Q : +1.0 (‐1.0)+2.2 (‐2.2)*1 The sensitivities represent the impact on net income for the year ending December 31, 2020 against a $1 /bbl increase (decrease) in the Brent crude oil price on
average and a ¥ 1 depreciation (appreciation) against the U.S. dollar. These are based on the financial situation mainly of existing production projects at the
beginning of the fiscal year. These are for reference purposes only and the actual impact may change due to fluctuations in production volumes, capital
expenditures and cost recoveries, and may not be constant, depending on crude oil prices and exchange rates.
*2 This is a sensitivity on net income determined by fluctuations in the oil price and is subject to the average price of crude oil (Brent). As part of the sales pricehas been finalized at the beginning of each quarter, the sensitivity breakdown for each quarter is estimated taking into account the percentage of the finalized
sales price as follows;
At the beginning of the 1Q : +6.5 billions of yen (1Q : +1.0 billions of yen, 2Q : +1.5 billions of yen, 3Q : +2.0 billions of yen , 4Q : +2.0 billions of yen)
At the beginning of the 2Q : +4.5 billions of yen (1Q : －－－－－－－－ , 2Q : +1.0 billions of yen, 3Q : +1.5 billions of yen , 4Q : +2.0 billions of yen)
At the beginning of the 3Q : +2.5 billions of yen (1Q : －－－－－－－－ , 2Q : －－－－－－－－ , 3Q : +1.0 billions of yen , 4Q : +1.5 billions of yen)
At the beginning of the 4Q : +1.0 billions of yen (1Q : －－－－－－－－ , 2Q : －－－－－－－－ , 3Q : －－－－－－－－ , 4Q : +1.0 billions of yen)
*3 This is a sensitivity on net income determined by fluctuation of the yen against the U.S. dollar and is subject to the average exchange rate. On the other hand, asensitivity related to valuation for assets and liabilities denominated in the U.S. dollar on net income incurred by foreign exchange differences between theexchange rate at the end of the fiscal year and the end of the previous fiscal year is almost neutralized.
Copyright © 2020 INPEX CORPORATION. All rights reserved.

7

Sales and Investment Forecasts
for the Year ending December 31, 2020
Forecasts for the year ending
Dec 31, 2020

Reference
As of Feb 12, 2020

As of Aug 6, 2020

Change

2nd half (Actual Result)

128,712

115,196(13,516)

60,894Natural gas (million cf) *2

493,815

467,000(26,815)

222,856

Overseas410,601

390,288(20,313)183,030

Japan

83,214(2,229 million m3)

76,712(2,055 million m3)(6,502)((174 million m3))

39,826(1,067 million m3)

570

296

(274)

160

Development expenditure*4

268.0

177.0

(91.0)

81.3

Exploration expenditure

30.0

13.0

(17.0)

5.2

Other capital expenditure

3.0

2.0

(1.0)

0.3

Sales Volume

Crude oil (thousand bbl) *1

LPG (thousand bbl)*3（Billions of yen）

Exploration
expenses 25.5

Exploration expenses andProvision for explorations*5

Provision for
explorations 4.5(Non‐controlling interest
portion)*6

30.1

Exploration
expenses 11.2
Provision for
explorations 3.8

7.9

15.1

(15.0)

7.2(0.7)

Exploration
expenses 4.6
Provision for
explorations 2.2

6.9

0.3

*1 CF for domestic crude oil sales and petroleum products : 1kl=6.29bbl*2 CF for domestic natural gas sales : 1m3=37.32cf*3 CF for domestic LPG sales : 1t=10.5bbl*4 Development expenditure includes investment in Ichthys downstream and acquisition costs*5 “Provision for allowance for recoverable accounts under production sharing” + ”Provision for exploration projects”, related to exploration activities*6 Capital increase from Non‐controlling interests, etc.

Copyright © 2020 INPEX CORPORATION. All rights reserved.

8

Net Production (January to June 2020)
Oil, Condensate and LPG

Oil and Gas Total
582 thousand BOE/day

353 thousand BOE/day
2% 1%

9

12%

3 41
3%

56

16%

4%

Japan

19 25

Asia/Oceania

244

Eurasia
Middle East/Africa

69%

Americas

40%

244

234
Japan

Natural Gas
2% 4%

10%

27 53 116

Asia/Oceania

1,195 million cf/day(229 thousand BOE/day)

42%

60
11%

Eurasia
Middle East/Africa
Americas

Japan

999
84%

Asia/Oceania
Eurasia
Americas* The production volume under the production sharing contracts corresponds to the net economic take of the INPEX Group.
Copyright © 2020 INPEX CORPORATION. All rights reserved.

9

Project Summary

Major Assets in Production & Development

Sakhalin 1
North Caspian Sea Block(Kashagan Oil Field, etc.)
ACG Oil Fields
Abu Dhabi Offshore Oil
FieldsAbu Dhabi Onshore
Concession
Offshore D.R.
Congo BlockTight Oil Project in US(Eagle Ford shale play)
Minami‐Nagaoka
Gas Field

Lucius Fieldin the U.S. Gulf of Mexico

05‐1b/05‐1c
Sebuku Block (Ruby Gas Field)
Berau Block (Tangguh Unit)

Offshore Angola Block 14

Abadi LNG Project

WA‐35‐L(Van Gogh Oil Field)

TL‐SO‐T 19‐12(Bayu‐Undan Oil & Gas Field)

WA‐35‐L/WA‐55‐L(Coniston Oil Field)

Prelude FLNG Project

WA‐43‐L(Ravensworth Oil Field)

In Production
Copyright © 2020 INPEX CORPORATION. All rights reserved.

Copa Macoya &Guarico Oriental Blocks

Ichthys LNG Project

Under Development

Preparation for Development
11Natural Gas Business in Japan
 Production Volume*1Natural gas: approx. 3.1 million m3/d(117 million scf/d)Crude oil and condensate: approx. 3,000 bbl/d

 Natural Gas Sales*2
Niigata

Naoetsu LNG Terminal
Minami Nagaoka
Gas Field

Shin Oumi Line

Gunma

Toyama

FY 2019/12 (9 months): approx. 1.51 billion m3



FY 2020/12 first half: approx. 1.07 billion m3

Distribution outlook: 2.50 billion m3 per year in
the first half of the 2020s, 3.00 billion m3 peryear in the long‐term

Tochigi

Shin Tokyo Line

Toyama Line

Ryomo Line

Tokyo Line Global Gas Value Chain

Matsumoto Line

Saitama

Iruma Line

NaganoYamanashi

Kofu Line(Shizuoka Gas)

Started commercial operations at Naoetsu LNG
Terminal in December 2013

Toyama Line completed in June 2016

First Ichthys LNG cargo arrived at Naoetsu
LNG Terminal in October 2018

Tokyo

Shizuoka Line
Second Suruga Trunk Pipeline



Chiba

Minamifuzi Line
(INPEX, Shizuoka Gas, Tokyo Gas)

Sodeshi LNG Terminal
Shizuoka

50km

0*1 Average daily production volume for January to June 2020

Pipeline*2 1m3 =41.8605MJ

Copyright © 2020 INPEX CORPORATION. All rights reserved.

12

Sebuku Block (Ruby Gas Field)
INPEX South Makassar, Ltd.

 Participating Interest: 15%(Operator : PEARLOIL (Mubadala)) PSC: Until September 21, 2027

Makassar Strait Production Volume*1

West Papua
Jawa
Kalimantan

Gas Field

Sebuku Block

Sulawesi

Ruby Gas Field

Natural Gas*2: Approximately 91 million cf/

 Milestones


Farmed‐in in September 2010

Made FID in June 2011

Production commenced in October 2013

Block
0

100km

*1 Average daily production volume for June 2020 on the basis of all fields.
*2 Gas volume sold to buyers.

Copyright © 2020 INPEX CORPORATION. All rights reserved.

13

Berau Block (Tangguh LNG Project)
MI Berau B.V. / MI Berau Japan Ltd.

 Participating Interest: 7.79% (INPEX Net)
(Tangguh Unit) (Operator: BP) PSC: Until December 31, 2035
 Production Volume*1

Kalimantan

West Papua Province(Indonesia)

Sulawesi
Jawa

Condensate: Approximately 6,000 bbl/d

Natural Gas*2: Approximately 1,146 million cf/d

 LNG Production Volume: 7.6 Mtpa
 Milestones
Berau Block

LNG sales started in July 2009

Made FID for an expansion project to add a third

Gas Field

LNG train with a 3.8 million t/y production

Blockcapacity in July 2016, currently underconstruction

Kaimana50km

0*1 Average daily production volume for June 2020 on the basis of all fields.
*2 Gas volume sold to buyers.

Copyright © 2020 INPEX CORPORATION. All rights reserved.

14

Blocks 05‐1b and 05‐1c (Sao Vang and Dai Nguyet Gas Field)
Teikoku Oil (Con Son) Co., Ltd.

 Participating Interest：36.92%(Operator: Idemitsu Gas Production (Vietnam))Cambodia
Vietnam PSC: Until November 17, 2034
 Milestones

Thailand

Malaysia

Sao Vang and Dai
Nguyet Gas Field



February 2011: Successful exploration wellJune 2013: Discovery of gas and condensateAugust 2014: Discovery of gas and condensateFebruary 2018: Final Investment Decision

Development work in progress to commence

Gas Field
Block

Blocks 05‐1b & 05‐1c
010km

Copyright © 2020 INPEX CORPORATION. All rights reserved.

production in late 2020

15

TL‐SO‐T 19‐12 Block (Bayu‐Undan Gas and Condensate Field)
INPEX Sahul, Ltd.

 Participating Interest: 11.378120%(Operator: Santos)
 PSC: Until February 6, 2022
 Production volume*1
Oil Field
Indonesia

Gas Field

Australia

Block
PipelineCondensate: Approximately 9,000 bbl/d

LPG: Approximately 4,000 bbl/d

Natural Gas *2 : Approximately 339 million cf/d

 Milestones

Australia

Kitan Oil Field
TL‐SO‐T 19‐12 Block

In February 2004, commenced sales ofcondensate and LPG

TL‐SO‐T 19‐13 BlockIn August 2005, entered into an LNG Sales
Contract with JERA (former TEPCO) and Tokyo
Gas

Bayu‐Undan Gas andCondensate Field
Darwin050km

In February 2006, commenced LNG shipments



In August 2019, in light of the delimitation of themaritime boundaries between Australia andTimor‐Leste, INPEX entered into a new PSC

The map includes provisional maritime boundaries

with the government of Timor‐Leste. The projectwill continue to be operated under terms*1 Average daily production volume for June 2020 on the basis of all fields.

equivalent to the previous arrangements.

*2 Gas volume sold to buyers.
Copyright © 2020 INPEX CORPORATION. All rights reserved.

16

Van Gogh, Coniston and Ravensworth Oil Fields
INPEX Alpha, Ltd.
Van Gogh Oil Field (WA‐35‐L) andConiston Oil Field (WA‐35‐L / WA‐55‐L)
WA‐55‐L
Block

Australia

Coniston Oil Field

WA‐35‐L
Block
WA‐43‐L
Block

Van Gogh Oil Field
Ravensworth Oil Field

Participating Interest: 47.499% (Operator: Santos)
Concession Agreement: Valid until end of production
Milestones
 In February 2010, oil production commenced at
the Van Gogh Oil Field In May 2015, oil production commenced at theConiston Oil Fields
 In July 2016, oil production commenced at theNovara Structure (Coniston Oil Field)
 In January 2019, production commenced fromthe infill wells at the Van Gogh Oil Field In March 2020, production temporarily
halted for FPSO drydock repairs.

Onslow

Ravensworth Oil Field (WA‐43‐L)
Oil Field
Gas Field
Block

Australia
Exmouth
0

50km






Participating Interest: 28.5% (Operator: BHP)
Concession Agreement: Valid until end of production
Production volume*: Approximately 3,000bbl/d ofcrude oil
Milestones
 Production commenced in August 2010

* Average daily production volume for June 2020 on the basis of all fields.

Copyright © 2020 INPEX CORPORATION. All rights reserved.

17

Prelude FLNG Project
INPEX Oil & Gas Australia Pty Ltd

Easttimor

Prelude Oil Field
Concerto Oil Field
Australia

WA‐44‐L Block

Gas Field
IchthysBlockParticipating Interest: 17.5%(Operator: Shell)Concession Agreement: Valid until end of production

Production Capacity
 LNG*: 3.6 million t/y LPG: 0.4 million t/y at peak
 Condensate: Approx. 1.3 million t/y at peakMilestones
 Made FID in May 2011
 Wells opened and initial phase of productioncommenced in December 2018
 1st Condensate cargo shipped from FLNG in
March 2019 1st LNG cargo shipped in June 2019 1st LPG cargo shipped in July 2019

40km

0

* LNG sales and purchase agreements in place with JERA (approx. 0.56
MTPA) and Shizuoka Gas (approx. 0.07 MTPA) respectively covering
INPEX’s equity portion of the project’s LNG output (approx. 0.63MTPA)

Copyright © 2020 INPEX CORPORATION. All rights reserved.

18

Ichthys LNG Project Overview
JERA (former Tokyo
Electric Power
portion) 1.05 mtpa

 Participating Interest : 66.245% (Operator)
Tokyo Gas
1.05 mtpa

 Production volume*1
 Upstream natural gas*2: Approximately 1,316 million cf/d
 Upstream condensate: Approximately 53 thousand b/d Shipped cargoes from production start‐up to June 2020

INPEX 0.90 mtpa






Kansai Electric0.80 mtpa

LNG: 171 (56 from Jan to June 2020)
Onshore condensate (LNG plant): 29 (9 from Jan to June 2020)
Offshore condensate (FPSO): 49 (16 from Jan to June 2020)
LPG: 45 (16 from Jan to June 2020)

CPC Corporation,
Taiwan 1.75 mtpa

TOTAL 0.90
mtpa

Osaka Gas 0.80 mtpa

 Production overviewProject Life: Approximately 40 years
Approximately 8.9 million t/y of LNG(Production Capacity)
Approximately 1.65 million t/y of LPG(Production Capacity)
Approximately 100,000 bbl/d of condensate (at peak) Proved reserves
 Approximately 1,011 million BOE (based on INPEX’s
participating interest of 66.245%)

 Participating interests in multiple exploration blocks
nearby providing future development potential
 Marketing Secured LNG SPAs covering 8.4 million t/y of LNG
 Approx. 70% of the LNG delivered to Japanese buyers
 Secured LPG SPA covering INPEX share*1 Average daily production for June 2020
*2 Gas volume sold to the downstream entity (Gas provided from upstream to
the LNG plant as a raw material to make products such as LNG, LPG andplant condensate)
Copyright © 2020 INPEX CORPORATION. All rights reserved.

JERA (former Chubu
Electric Power
portion) 0.49 mtpa

Toho Gas 0.28 mtpa
Kyushu Electric Power 0.30 mtpa

 Project Financing
 US$ 20 billion project financing agreements with ECAs andmajor commercial banks completed in December 2012

 Major EPC contracts
 Upstream••••

CPF: Samsung Heavy Industries
FPSO: Daewoo Shipbuilding & Marine Engineering
Subsea Production System (SPS): GE Oil & Gas
Umbilical, Riser and Flowline (URF): McDermott Downstream••••

Onshore LNG Plant: JGC, Chiyoda and KBR
Gas Export Pipeline: Saipem, Mitsui Corporation, Sumitomo Corp
oration and Metal One Corporation
Dredging in Darwin Harbour: Van Oord
Instrumentation & Control System: Yokogawa Electric19Ichthys LNG Project Production Facilities

LNG, LPG, Condensate

Condensate

Offtake Tanker

Central Processing Facility

Onshore LNG Plant (Darwin)

FPSO

Flexible Riser
Upstream

Downstream

Gas Export Pipeline

Flowlines

Subsea Production System

Copyright © 2020 INPEX CORPORATION. All rights reserved.

20

Ichthys LNG Project
Timeline from FID until Commencement of Production

 Timeline since Final Investment Decision (FID)Key Milestone
FID(Offshore facilities / Production wells)•Steel cutting ceremony for CPF and FPSO•Start‐up of CPF and FPSO assembly work
•FPSO hull launch•Completion of gas export pipelay•Commencement of drilling of production wells•Completion of installation of subsea flowlines•Completion of CPF and FPSO sail away, mooring and hook‐up•Start‐up of CPF and FPSO commissioning•Completion of commissioning of all key offshore facilities(Onshore facilities)•Groundbreaking ceremony of LNG plant in Darwin•Commencement of construction on modules, jetties and tanks•Completion of dredging in Darwin Harbour•Completion of production loading jetty•Completion of construction and delivery of LNG plant modules•Completion of hydrostatic testing on all product tanks•Start‐up of power generation facilities•Completion of commissioning of all key onshore facilities(Overall project)•Acquisition of production license / project financing agreements•Arrangement of insurance for facilities during construction period•Contracts signed for construction, ownership and time charter of LNG tankers•50% project completion•LNG production capacity increased from 8.4 to 8.9 million t/y•Agreement in principle with Astomos Energy Corporation on sales of LPG•Naming ceremonies for LNG tanker to supply Naoetsu LNG Terminal and CPC Corporation
Commencement of gas production from the wellhead
Commencement of shipment of condensate, LNG and LPG
Copyright © 2020 INPEX CORPORATION. All rights reserved.

2012 2013 2014 2015 2016 2017 2018
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21

Ichthys LNG ProjectCentral Processing Facility (CPF)

Copyright © 2020 INPEX CORPORATION. All rights reserved.

22

Ichthys LNG Project
Floating Production Storage and Offloading (FPSO)

Copyright © 2020 INPEX CORPORATION. All rights reserved.

23

Ichthys LNG Project
Onshore Gas Liquefaction Plant

Copyright © 2020 INPEX CORPORATION. All rights reserved.

24

Abadi LNG Project Participating Interest: 65% (Operator)
 PSC: Until 15 November, 2055
（Signed extension in October 2019)
 Production Capacity
Tanimbar Islands

Saumlaki••Indonesia

Masela Block

Easttimor

Total output of natural gas 10.5 million tons per
year (LNG equivalent) including；Approximately 9.5 million tons of LNG per year
Up to 150 million standard cubic feet of natural gas
per day supply via pipeline

Up to approximately 35,000 barrels ofcondensate per day Milestones


Abadi Gas Field
Australia

Gas Field
Block

Darwin0

Map includes provisional maritime boundaries

200km




Copyright © 2020 INPEX CORPORATION. All rights reserved.

Between March and October 2018, conducted
Pre‐FEED works based on an onshore LNG
development concept with an annual LNG
production capacity of 9.5 million tons.
In July 2019, revised development plan based on
an onshore LNG development scheme wasapproved by the Indonesian authorities.
Currently conducting preparation forcommencement of FEED work that is expected totake 1 to 2 years.
Aiming for production start‐up in the latter halfof 2020s.
10% participating interest will be transferred toan Indonesian participant to be designated by
the Indonesian government in accordance with
PSC conditions.
25

ACG Oil Fields
INPEX Southwest Caspian Sea, Ltd.

 Participating Interest: 9.3072%*1(Operator: BP) PSC: Until 2049*2
 Production volume *3 : Approximately
497,000 bbl/d
 Milestones

Caspian Sea

Azerbaijan
Baku

ACG Oil Fields



Deepwater Gunashli Field



Chirag Field
Azeri Field

Kazakhstan
Russia
Uzbekistan

Oil Field

Azerbaijan



Block

Turkmenistan

Pipeline
Iran



50km

0

Started oil production in the Chirag Field in 1997
Started oil production in the central section of
the Azeri Field in February 2005
Started oil production in the western section of
the Azeri Field in December 2005
Started oil production in the eastern section of
the Azeri Field in October 2006
Started oil production in the Deepwater
Gunashli Field in April 2008
Started oil production in the western section of
the Chirag Field in January 2014
Azeri Central East project FID was signed in
April 2019.

*1 INPEX’s participating interest has changed to 9.3072% as a result of theextension and amendment of the PSA effective January 1, 2018.
*2 The extension of the PSA until 2049 was agreed in 2017.
*3 Average daily production volume for January to June 2020 on the basis of
all fields
Copyright © 2020 INPEX CORPORATION. All rights reserved.

26

Kashagan Oil Field and others
INPEX North Caspian Sea, Ltd.

Kazakhstan

Kairan Structure Participating Interest: 7.56% (Operator:
NCOC (North Caspian Operating
Company)) PSC: Kashagan ‐ Until 2021*1
 Production volume*2
North Caspian Sea

 Milestones

Caspian Sea



Oil shipments at Kashagan Oil Field commencedin October 2016
Reached target production volume of 370,000

Aktote Structure

bbl/d. Production operations ongoing targeting
450,000 barrels per day

Kashagan Oil Field
RussiaKazakhstan

TurkeyOil Field

Crude Oil: Approximately 300,000 bbl/d


China

Iran

Gas Field
Block

India

Agreed with the Kazakhstan government on
extending the evaluation period of the
Aktote/Kairan structures by five years andcontinuing development scenario studies.

*1 Current PSC provide options to extend the contract period by 10 years
twice (until 2041)*2 Average daily production volume for June 2020 on the basis of all fields

Copyright © 2020 INPEX CORPORATION. All rights reserved.

27

BTC (Baku‐Tbilisi‐Ceyhan) Pipeline Project
INPEX BTC Pipeline, Ltd.

 Participating Interest: 2.5%
(Operator : BP) Oil export volume*: Approximately
644,000 bbl/d

RussiaRussiaBlack
SeaTurkeyCaspian Sea

Georgia Milestones


TbilisiBaku
Armenia
Azerbaijan

BTC Pipeline

TurkeyMediterranean
Sea
Cyprus
Iran

Ceyhan

Syria




Iraq

200km

0



Pipeline

Acquired a 2.5% participating interest in theoperating company (BTC Co.) through INPEXBTC Pipeline, Ltd. in October 2002
Commenced crude oil export in June 2006 from
Ceyhan terminal
Completed 1.2 million bbl/d capacity expansion
work in March 2009
Cumulative export volume reached 1,000 million
bbls on September 13, 2010
Cumulative export volume reached 2,000 million
bbls on August 11, 2014
Cumulative export volume reached 3,000 million
bbls on July 17, 2018

* Average transportation volume for 2019

Copyright © 2020 INPEX CORPORATION. All rights reserved.

28

Sakhalin‐1
Sakhalin Oil and Gas Development Co., Ltd.

 Sakhalin Oil and Gas Development Co.,
Ltd. (SODECO)’s participating interest in
Sakhalin‐1: 30%

Russia INPEX’s share in SODECO:
Approximately 6.08%

Peopleʹs Republicof China
Russia Operator: Exxon Neftegas Limited (ENL)
Sakhalin Island Milestones


Peopleʹs Republicof China
Hokkaido

0



200km



Copyright © 2020 INPEX CORPORATION. All rights reserved.

Commenced production from Chayvo in October
2005; commenced crude oil export in October
2006
Commenced production from Odoptu in
September 2010
Commenced production from Arkutun‐Dagi inJanuary 2015
Currently supplying natural gas to Russian
market29

INK Project, East Siberia
Japan South Sakha Oil Co. Limited

 Japan South Sakha Oil Co. Limited（JASSOC）’s shares in Joint Stock
Company INK‐ZAPAD: 49%

RussiaRussiaYakutsk INPEX’s share in JASSOC: 24.998%

Zapadno‐Yaraktinskiy Block

Peopleʹs Republicof China

 Operator : INK‐ZAPAD
 License agreement: 25 years (Until 2031)

Boloshetirskiy Block
Taishet Production volume*: Approximately
23,000 bbl/d of crude oil Milestones

Skovorodino
Lake Baikal
IrkutskDaqing

Mongolia
Vladivostok
Block

Commenced production from the Ichyodinskoye
Oil Field in November 2014

Peopleʹs Republicof China
500km

0* Average daily production volume for June 2020 on the basis of all fields

Copyright © 2020 INPEX CORPORATION. All rights reserved.

30

Block 10, Iraq (Eridu Oil Field)
INPEX South Iraq, Ltd.

 Participating Interest: 40%(Operator: LUKOIL)
 Block acquired: December 2012
(Republic of Iraq 4th Licensing Round)
Turkey EDPSC*1

Iraq



Iran

Iran


Saudi Arabia

 Milestones

BaghdadWest Qurna Oil Field*
Gharraf Oil Field*
Saudi Arabia

Nasiriyah Oil Field*
Basra

Oil Field
Block

Eridu Oil Field (Block 10)
Rumaila Oil Field*

0

100km

Exploration Period: 9 years (Until December 2,2021)*2
Development and Production Period: 20years*3



Oil deposits were discovered through the first
exploratory drilling conducted in February 2017.
Thereafter, the extent of the deposits was
confirmed by appraisal wells drilled in 2017.
As the deposits most likely extend beyond theContract Area, an extension application for theContract Area was submitted and approved in
November 2017.
Exploration and evaluation work is underway to
study the possibility of commercial development.

* INPEX does not participate in these fields*1 Exploration, Development and Production Service Contract*2 Exploration Period has been extended by 4 years for further exploration
and appraisal works to be conducted, in accordance with the EDPSC*3 The current service contract provides the option to extend theDevelopment and Production Periods by 5 years
Copyright © 2020 INPEX CORPORATION. All rights reserved.

31

Norwegian Continental Shelf Projects
INPEX Norge AS

 PL1016, Northern Norwegian Sea

0

70km



Participating Interest: 40%(Operator: OMV Norge AS)Block Acquisition: March 1, 2019Concession Agreement•
Exploration and Appraisal Period: 7 years(to 2026)•
Development and Production Period: 25
years



License awarded in January 2019

Norwegian sea

Awards in Predefined Areas (APA)
Block
Norwegian sea

SwedenAwards inPredefined
Areas (APA)

Finland

Norway PL1027, Western Barents Sea

Awards inPredefined
Areas (APA)

PL1016

PL1027

NorwayParticipating Interest:20%(Operator: Lundin Norway AS)

Block Acquisition: March 1, 2019Concession Agreement•
Exploration and Appraisal Period: 8 years(to 2027)•
Development and Production Period: 25
years



License awarded in January 2019



Exploratory well 7221/4‐1 is planned to be drilledin 2020.

NorwaySweden070km

Copyright © 2020 INPEX CORPORATION. All rights reserved.

32

Abu Dhabi Offshore Oil Fields
Japan Oil Development Co., Ltd. (JODCO) / JODCO Lower Zakum Limited

 Upper Zakum Oil Field (JODCO)Participating Interest: 12%(Operator: ADNOC Offshore)
Das Island

Upper / Lower Zakum Oil Fields
Satah Oil Field Lower Zakum Oil Field(JODCO Lower Zakum Limited)

Zirku Island

Concession agreement: Until 2051

Participating Interest: 10%(Operator: ADNOC Offshore)

Abu Dhabi

Umm Al‐Dalkh Oil Field

Iran



Concession agreement: Until 2058

 Satah/Umm Al Dalkh oil fields
Saudi Arabia

Oil Field
Pipeline

United Arab Emirates(JODCO)Participating Interest: 40%(Operator: ADNOC Offshore)Copyright © 2020 INPEX CORPORATION. All rights reserved.

Concession agreement: Until 2043

33

Abu Dhabi Onshore Concession
JODCO Onshore Limited

Abu Dhabi
Al Dabb‘iya Field

Jumaylah Field
Uwaisa Field

Shanayel Field

Arjan Field

Bab Field

Bida Al‐Qemzan Participating interest: 5%(Operator: ADNOC Onshore*)

Rumaitha Field

Sahil Field

Field
Bu Hasa Field

United Arab Emirates

 Concession agreement: Until 2054

Asab Field

Huwailla Field* Operating company owned by companies with participating interests.
JODCO Onshore Limited has a 5% share in the operating company.

Iran

Qusahwira Field
Shah Field
Oil Field

Saudi Arabia

Pipeline

Mender Field

Copyright © 2020 INPEX CORPORATION. All rights reserved.

34

Abu Dhabi Onshore Block 4
JODCO Exploration Limited

Iraq

Iran

Saudi Arabia
Oman Participating interest: 100%
(Operator: JODCO Exploration Limited)Onshore Block 4
Abu Dhabi City Block surface area: Approximately 6,116
square kilometers

Saudi Arabia

United Arab Emirates

Block
0

Oman

100km

Copyright © 2020 INPEX CORPORATION. All rights reserved.

35

Offshore D.R. Congo Block
Teikoku Oil (D.R. Congo) Co., Ltd.

D.R. Congo

Motoba Participating Interest: 32.28%(Operator: Perenco)

Lukami Concession Agreement: 1969‐2043

MibaleMwanbe Production started in 1975

Misato
Moko

Libwa

Lubi

MuandaTshialaGCO

Banana Production volume*: Approximately
14,000 bbl/d of crude oil

Offshore D.R. Congo Block* Average daily production volume for June 2020 on the basis of all fields

Oil Field
Block

Soyo

Atlantic Ocean

Copyright © 2020 INPEX CORPORATION. All rights reserved.

36

Offshore Angola Block 14
INPEX Angola Block 14 Ltd.

 Participating Interest: 9.998%(Operator: Chevron)Rep. ofCongo

 PSC:
D.R. Congo

Offshore Angola Block 14

Oil Field

Republic ofAngola

Kuito DA: Until 2023



BBLT DA: Until 2027



TL DA: Until 2028

Lianzi: Until 2031

 Production volume*: Approximately
55,000 bbl/d of crude oil

Atlantic Ocean

Block
0

100km

* Average daily production volume for June 2020 on the basis of all fields

Copyright © 2020 INPEX CORPORATION. All rights reserved.

37

Copa Macoya and Guarico Oriental Blocks, Venezuela
Teikoku Oil & Gas Venezuela, C.A., other INPEX’s share in joint ventures

Gas JV (Copa Macoya): 70% (Operator)



Oil JV (Guarico Oriental): 30%

 Joint Venture Agreement: 2006‐2026
 Production volume*1:
Atlantic Ocean

Brazil

CaracasNatural Gas*2: Approximately 47 million cf/d

*1 Average daily production volume for June 2020 on the basis of all fields.
*2 Gas volume sold to buyers.

Copa Macoya andGuarico Oriental Blocks

Venezuela
Block0

Columbia
200km

BrazilCopyright © 2020 INPEX CORPORATION. All rights reserved.

38

Gulf of Mexico Projects
INPEX Americas, Inc. / INPEX E&P Mexico, S.A. de C.V., otherLucius Oil Field & Hadrian North Field(INPEX Americas, Inc. ) Lease Agreement
 Participating Interest: 7.75309%(Operator : Occidental)
 Production volume*1
•
•

Texas



Louisiana•

R1.4 Block 3 (Perdido)

•
•

Cuba
MexicoProduction of crude oil and natural gas started in
January 2015
Revised Unit Participating Agreement (UPA) on
unitization reached in September 2017 between
project partners of Lucius Oil Field and Hadrian
North Oil Field located south of Lucius
Production from Hadrian North started in April
2019
Buckskin tie‐in to Lucius SPAR started in June 2019



Block 3, Perdido Fold Belt, Mexican Gulf of Mexico（INPEX E&P Mexico PB‐03, S.A. de C.V.）
 License Agreement
 Participating interest: 33.3333%(Operator: Chevron)

Block 22, Salina Basin, Mexican Gulf of Mexico（INPEX E&P Mexico, S.A. de C.V.）
 License Agreement
 Participating interest: 35% (Operator: Chevron)R2.4 Block 22 (Salina)

0

Milestones•

Keathley Canyon Blocks
874/875/918/919(Lucius Field and Hadrian
North Field)

Crude Oil: Approximately 30,000bbl/dNatural Gas*2: Approximately 31 million cf/d

1,000km*1 Average daily production volume for June 2020 on the basis of all fields.
*2 Gas volume sold to buyers.
Copyright © 2020 INPEX CORPORATION. All rights reserved.

39

Tight Oil Project in Texas, US
INPEX Eagle Ford, LLC

 Participating Interest: 100% (Operator*1)
 Lease Agreement
 Acreage: Approximately 9,800 net acres(Approximately 40 square kilometers) Production volume*2:
DallasSan Antonio

GonzalesHouston

Crude Oil: Approximately 12,000bbl/d

Natural Gas: Approximately 13 million cf/d

 Milestones
WilsonAtascosa

Reached an agreement with GulfTex Energy toacquire multiple development and production
assets in the Eagle Ford play in the State of Texas,

Karnesthe United States in March 2019.

La Salle
Block
0

40km

Eagle Ford Shale play

*1 INPEX is the Operator except for a portion of project assets*2 INPEX Net production volume (Average daily production volume forJune 2020)

Drilling Site

Copyright © 2020 INPEX CORPORATION. All rights reserved.

40

Key Companies and Petroleum Contracts (1/2)
 Key Companies and Petroleum Contracts*1
Company

Field / Project NameCountry

Contract Type

Ownership

Phase

Japan

Concession‐

ProducingJapan
INPEX CORPORATION

Minami‐Nagaoka Gas Field, etc.*2

Asia and Oceania
INPEX South Makassar, Ltd.

Sebuku Block(Ruby Gas Field)

Indonesia

PS

100%

Producing

MI Berau B.V.

Berau Block (Tangguh LNG Project)

IndonesiaPS

44%

Producing / Development

INPEX Masela, Ltd.

Masela Block (Abadi LNG)*2

Indonesia

PS

51.9%

Preparation for Development

Teikoku Oil (Con Son) Co., Ltd.

05‐1b / 05‐1c Blocks(Sao Vang and Dai Nguyet Gas Fields)

Vietnam

PS

100%

Development

INPEX Sahul, Ltd.

Bayu‐Undan Gas Condensate Field

Timor‐Leste

PS

100%

Producing

INPEX Browse E&P Pty Ltd

WA‐285‐P*2and others

Australia

Concession

100%

Exploration

INPEX Ichthys Pty Ltd

WA‐50‐L and WA‐51‐L (Ichthys)*2

Australia

Concession

100%

Producing

Ichthys LNG Pty Ltd

Ichthys Downstream Business*2

Australia‐

66.245%

Producing

INPEX Oil & Gas Australia Pty Ltd

Prelude FLNG Project

Australia

Concession

100%

Producing

INPEX Alpha, Ltd.

Van Gogh Oil Field/Coniston Oil Field

Australia

Concession

100%

Producing

INPEX Alpha, Ltd.

Ravensworth Oil Field

Australia

Concession

100%

Producing*1 As of the end of June 2020
*2 INPEX operated projects
Copyright © 2020 INPEX CORPORATION. All rights reserved.

41

Key Companies and Petroleum Contracts (2/2)
 Key Companies and Petroleum Contracts*1
Company

Field / Project NameCountry

Contract Type

Ownership

Phase

Eurasia (Europe ‐ NIS)INPEX Southwest Caspian Sea, Ltd.

ACG Oil Fields

Azerbaijan

PS

51%

Producing

INPEX North Caspian Sea, Ltd.

Kashagan Oil Field

Kazakhstan

PS

51%

Producing

Middle East and Africa
JODCO

Upper Zakum Oil Field, etc.

UAE

Concession

100%

Producing

JODCO Lower Zakum Limited

Lower Zakum Oil Field

UAE

Concession

100%

Producing

JODCO Onshore Limited

Onshore Concession

UAE

Concession

51%

Producing

Teikoku Oil (D.R. Congo) Co., Ltd.

Offshore D.R.Congo

D.R.Congo

Concession

100%

Producing

INPEX Angola Block14

Offshore Angola Block 14

AngolaPS

100%

Producing

Americas
Teikoku Oil & Gas Venezuela

Copa Macoya*2 and Guarico Oriental

Venezuela

Concession

100%

Producing

INPEX Americas, Inc

Lucius Field and Hadrian North Field

USA

Concession

100%

Producing

INPEX Eagle Ford, LLC

Eagle Ford Tight Oil Project*3

USA

Concession

100%*3

Producing*1 As of the end of June 2020
*2 INPEX operated projects*3 INPEX operated projects except for a portion of project assets
Copyright © 2020 INPEX CORPORATION. All rights reserved.

Other data and information

42

Valuation Indices

EV/Proved Reserves*1

PBR*2

20

1
0.8

15

0.6
10
0.4
5

0.2

0

0
INPEX

Median of
Independents

Median of Oil Majors

INPEXMedian of
Independents

Median of Oil Majors*1 EV (Enterprise Value) / Proved Reserves = (Total market value + Total debt ‐ Cash and cash equivalent + Non‐controlling interests) / Proved Reserves. Total
market value as of June 30, 2020. Financial data as of March 31, 2020 (partly as of December 31, 2019). Proved Reserves as of December 31, 2019. Sources
based on public data.
*2 PBR = Share price / Net asset per share. Total market value as of June 30, 2020. Financial data as of March 31, 2020 (partly as of December 31, 2019). Sources
based on public data.
Copyright © 2020 INPEX CORPORATION. All rights reserved.

Vision 2040

44

エネルギーの未来に応える

Three Business Objectives

Sustainable Growth of Oil andNatural Gas E&P Activities

Development of Global Gas
Value Chain Business

Reinforcement ofRenewable Energy Initiatives

A top 10

A key player

10%international oil company

in natural gas development andsupply in Asia & Oceaniaof project portfolio Growth in both volume and value Volume: Aspire to achieve a production volume of 1
million BOED, continuously expand reserves
 Value: Significantly increase net income and cash flowfrom operations, improve capital efficiency

 Develop gas demand in Asia and other growing
markets
 Increase domestic gas supply volume over 3 billion m3
 Maximize value of the upstream gas interests
 Maintain / strengthen supply and demand
management and trading functions

 Proactively address climate change Expand participation in wind power generation andother areas in addition to geothermal power, whichdraws on synergies with E&P activities Conduct R&D in renewables to reduce greenhousegas emissions

Develop a foundation by conducting CSR management,
particularly accelerating response to climate change and utilizing INPEX’s strengths
Reduce carbon footprint, strengthen ESG initiatives and contribute to the realization of SDGs
Allocate cash generated from projects to shareholder returns and investments for growth

Continuously and sustainably increase corporate value
Note: Announced on May 11, 2018
Copyright © 2020 INPEX CORPORATION. All rights reserved.

45

Medium‐term Business Plan 2018‐2022
Cash Allocation during the 5‐Year Period*1
Cash In

Cash OutCash flowfromoperations

Investment
for growth

beforeexploration
expenditure¥1.7 trillion*2*

Main Business Initiatives(1) Oil & Natural Gas
Upstream(70% for existing
projects, 30% for
new projects)

Core business areas(3) Renewable Energy

ACG Oil Fields

Priority exploration
areas



Eridu Oil Field (Block 10 in Iraq)

Prelude FLNG
Ichthys LNG

Financial Targets

Enhancing Shareholder Returns
In FY2018, plan to issue a commemorative dividend following the Ichthys
LNG Project’s start‐up and shipment of cargo
Shareholder return policy during FY2018‐2022
 Maintain base dividends not falling below ¥18 per share plus thecommemorative dividend as above
 Enhance annual dividends in stages by increasing the dividend per sharein accordance with the growth of the Company’s financial results
 Payout ratio : 30% or higher

FY2022
Net sales

Around ¥1,300 bn¥933.7 bn

Around ¥150 bn
Around ¥450 bn
5% or higher¥278.5 bn

Return on equity (ROE)

Annual
¥18
per
share
FY2021

US$60 / ¥110

Cash flow from operations

FY2017 Results

Crude oil price/exchange rate assumptions
Net income attributable to owners of parent

Commemorative
dividend

FY2020

Upstream Business Targets for FY2022
Net production
700 KBOED
RRR
Maintain 100％ or higher
Production cost
Reduce to US$5/BOE
Note: BOE stands for barrels of oil equivalent.
RRR is the 3‐year average. RRR stands for Reserve Replacement Ratio(Proved reserves increase including acquisition / Production).
Production cost is the production cost per barrel, excluding royalty.

*1 Assumes a crude oil price (Brent) of US$60/bbl and an exchange rate of ¥110/US$.
Includes Ichthys downstream JV.
*2 All expenditures for “Main Business Initiatives” as addressed from (1) to (3)FY2019Promote geothermal power generation business and enter wind
power generation business
Enhance R&D of renewable energy technologies

Abadi LNG ProjectDebt
reduction

FY2018



Minami‐Nagaoka Gas Field

Abu Dhabi Offshore andOnshore Oil Fields

Others

FY2017

Achieve annual gas supply volume of 2.5 billion m3 in Japan
Conduct LNG/gas marketing for Abadi, create gas demand in
Asia, etc.

Kashagan Oil Field

Shareholder
returns

Major assets & projects¥2.5 trillion(2) Global Gas Value Chain

US$57.85 / ¥110.86¥40.3 bn

1.4%

Maintain financial strength (expecting an equity ratio of 50% or higher)
Maintain financial and corporate resilience even if the crude oil prices drop to US$50/bbl

Note:
Crude oil price assumption is per one barrel of Brent crude oil; the exchange rate assumption is per U.S. dollar.
Targets are on a financial accounting basis.
Sensitivity of FY2022 net income attributable to owners of parent to the crude oil price and exchange rate is approximately +¥8.0 billion (‐¥8.0
billion) from a US$1/bbl increase (decrease) in the Brent crude oil price and approximately +¥2.0 billion (‐¥2.0 billion) from a ¥1/US$
depreciation (appreciation).
See page 5 of “Medium‐term Business Plan 2018‐2022” (URL: https://www.inpex.co.jp/english/company/pdf/business_plan.pdf) for other notes.

FY2022

Period of the Medium‐term Business Plan

Note: Announced on May 11, 2018

Copyright © 2020 INPEX CORPORATION. All rights reserved.

46

Annual Dividends and Payout Ratio
36 yen33 yen157%

30 yen

6 yen

160%
140%

6 yen

24 yen24 yen21 yen15 yen180%

24 yen27 yen18 yen30 yen24 yen100%
18 yen18 yen18 yen18 yen18 yen18 yen

65%

36%

80%
60%

12 yen
9 yen
6 yen

120%

57%

34%

35%
Payout Ratio
is N/A due to
net loss

14%

3 yen

40%
20%
0%

0 yen
2014/3

Dividends

2015/3

2016/32017/3

Dividends (commemorative dividend)

Copyright © 2020 INPEX CORPORATION. All rights reserved.

2018/3

2019/3

Dividends (increased dividend)

2019/122020/12(Forecast)

Payout Ratio (right axis)
47

CSR Topics
 INPEX engages in a variety of ESG activities focused on the following 6 material issues
Governance

Strengthen governance structure
Upgrade risk management systemRespect human rightComply with laws, prevent bribery and corruptions
Conduct Environmental and Social Impact Assessment(ESIA) in supply chainAssess and take measures to reduce impact on local andindigenous communities
Contribute to local economies

Compliance

HSE





Prevent of major incidents
Secure occupational health and safety
Conserve biodiversity, manage water resource
appropriately

Local
Communities



Promote renewable energy business
Develop natural gas as a cleaner source of energy
Strengthen climate‐related risk management

Employees

Climate Change Response Environment Social

Develop personnel and enhance the motivation of the workforce
Promote diversity

 Governance INPEX is included in major ESG indexes

FTSE

INPEX has been included in the FTSE4Good Global Index, FTSE4Good Japan Index, and in the FTSE Blossom Japan
Index. The FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong
Environmental, Social and Governance (ESG) practices. The FTSE Blossom Japan Index was adopted as comprehensive
indices incorporating ESG factors by the Government Pension Investment Fund for Japan (GPIF), one of the world’s
largest pension funds.

MSCI

INPEX is constituent of the MSCI ESG Leaders Indexes, MSCI Japan ESG Select Leaders Index and MSCI Japan
Empowering Women Index (WIN) , a leading set of indexes in the selection of outstanding companies in ESG
developed by Morgan Stanley Capital International (MSCI). MSCI Japan ESG Select Leaders Index and MSCI Japan
Empowering Women Index (WIN) have been adopted by the Government Pension Investment Fund for Japan (GPIF)
as indices incorporating ESG factors.

S&P/JPX Carbon
Efficient Index

INPEX has been included in the S&P/JPX Carbon Efficient Index, which has been adopted by the Government Pension
Investment Fund for Japan (GPIF) as environmental indices incorporating carbon efficiency and disclosure.

Copyright © 2020 INPEX CORPORATION. All rights reserved.

48

Production Sharing Contracts

1. Cost Recovery Portion

Cost Recovery
Portion

Host Country Profit Oil

Contractor
Profit Oil

Host Country
Share

Contractor
Share

Non‐capital expenditures recovered during
the current period
capital expenditures recovered during thecurrent period
Recoverable costs that have not been
recovered in the previous periods

2. Equity Portion (Profit Oil)

: Host Country Take
: Subject to Tax: Not Subject to Tax
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Contractor Take49

Accounting on Production Sharing Contracts

Cash Out

Assets on Balance Sheet

Income Statement

Project under
exploration phase

Exploration
Expenditures

Recoverable accounts
under production sharing
Project under development
and production phase

Provision for allowance forrecoverable accounts under
production sharing

Cost of sales Recovery of recoverable accounts
under production sharing (Capital
expenditures)

Development
Expenditures
Recoverable accounts
under production sharing

Cost of sales Recovery of recoverable accounts
under production sharing (Non‐Capital expenditures)

Production Costs(Operating expenses)
Project underdevelopment and production phase

Exploration anddevelopment rights

Acquisition Costs

SG&A Depreciation and amortization

Other Expenses
 Amortization of exploration anddevelopment rights

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50

Accounting on Concession Agreements

Cash Out

Assets on Balance Sheet

Exploration
Expenditures

Development
Expenditures

Production Costs(Operating expenses)

Acquisition Costs

Copyright © 2020 INPEX CORPORATION. All rights reserved.

Income Statement

All exploration costs are
expensed as incurred

Exploration expenses

Tangible Fixed Assets

All production costs are
expensed as incurred

Mining Rights

Cost of sales(Depreciation andamortization)

Cost of sales(Operating expenses)
Cost of sales(Depreciation andamortization)

51

Ichthys LNG Project Accounting Process Overview
Ichthys Upstream Permit
Holding entity (UJV)

Assets on Consolidated
Balance Sheet

Sales Revenue

Consolidated Income
Statement
Net Sales

All production costs are
expensed as incurred

Production Costs(Operating Expenses)
Development Expenditures(Depreciation and Amortization)

Tangible Fixed Assets

Raw Material Costs(Purchase of Feed Gas from UJV)

Cost of sales(Depreciation and amortization)* Depreciation is calculated on an units ofproduction basis over the life of the
project

Ichthys Downstream entity(IJV)
Sales Revenue

Cost of sales(Operating expenses)* INPEX share of IJV’s net income/loss arereflected as “equity in earnings/losses ofaffiliates“. Depreciation is calculated ona straight line basis over the life of the
project.

Production Costs(Operating Expenses)

Other Income/Expenses(Equity in earnings/losses
of affiliates)

Development Expenditures(Depreciation and Amortization)
Interest Expense* Ichthys Downstream entity (IJV) is an equity‐method affiliate and its cash flow does not appear on the consolidated cash flow statement* Only major cost and expenditure items are shown.
Copyright © 2020 INPEX CORPORATION. All rights reserved.

52

Summary of Australian Taxation
Sales
Operating expense⇒(Oil & Gas sales price)×(Sales volume)⇒OPEX incurred in relevant year (+Exploration cost)+CAPEX tax depreciation…………..(1)…………..(2)

PRRT (Petroleum Resource Rent Tax)
= (Upstream Revenue ‐ Upstream CAPEX & OPEX ‐ Exploration Cost ‐ Abandonment Cost ‐Undeducted PRRT expenditure carried forward) x 40%…………..(3)• PRRT deductions are made in the following order: Upstream CAPEX, OPEX, Exploration Cost,
Abandonment Cost.
Note: Exploration cost is subject to mandatory transfer between Projects/members of the same group of entities.

Corporate Tax(In Australia)• Undeducted PRRT Expenditure: non‐utilized deductible PRRT expenditure can be carried forward
to the following year(s), subject to augmentation at the rates set out below;
o Development cost: LTBR+5% or LTBR or GDP deflator
o Exploration cost: LTBR+15% or LTBR+5% or GDP deflator
Note: The interest rate to be applied varies depending on the timing of application for a production license, thetiming of exploration/development expenses and the number of years elapsed from the payment of expenses. LTBR =Long Term Bond Rate, GDP deflator = GDP deflator of Australia.
Corporate Tax = {(1) – (2) – (3) ‐ Interest paid) x 30%*
* The legal tax rate of Australian corporate tax may differ from the accounting burden of corporate tax etc. on INPEX’s

subsidiaries in Australia. In addition, the amount of corporate tax etc. in accounting may differ from the amount ofcorporate tax paid in Australia.

Note: Content may change due to tax revisions
Copyright © 2020 INPEX CORPORATION. All rights reserved.

53

Historical Crude Oil Prices(US$/bbl)

Brent

90

WTI

Dubai

80
70
60
50
40
30
20
10
0

Jan

Feb

Mar Apr May Jun

Jul

Aug Sep

Oct

Nov DecJan

Feb Mar Apr May Jun

2017

Jan to June 2019
Brent
WTI
Dubai

Average
66.11
57.36
65.45

Jul

Aug Sep

Oct

Nov DecJan

Feb

Mar Apr May Jun

2018

FY2019/12(Apr to Dec 2019)
Average
64.27
57.74
63.53

Jul

Aug Sep

Oct Nov Dec

Jan

2019

Copyright © 2020 INPEX CORPORATION. All rights reserved.

Feb
55.48
50.54
54.22

Mar
33.73
30.45
33.70

Mar Apr May Jun

2020

2020
Jan
63.67
57.53
64.29

Feb

Jan to June 2020
Apr
26.63
16.70
20.39

May
32.41
28.53
30.47

Jun
40.77
38.31
40.79

Average
42.12
37.01
40.64

54