JAPEX Management Plan 2022-2030

Improving Profitability and Building Medium-to Long -Term Business Foundation

with Focus on Contributing to Realization of Carbon-neutral Society

March 28, 2022
Japan Petroleum Exploration Co., Ltd.
(Security Code: 1662)

Copyright © 2022 Japan Petroleum Exploration Co., Ltd. All rights reserved.

Introduction: Review of Current Vision and Business Plan
Progress in the past 4 years, but significant changes in business environment
Formulated in May 2018

Long-term Vision 2030：Growth strategy towards FY2030

Growth to the Comprehensive Energy Company Utilizing our Oil and Gas E&P*1 and its Supply Basis

Medium-term Business Plan 2018-2022：Business direction and priority initiatives for 5 Years

Improve profitability to ROE≥5%, Optimize business portfolio and improve financial soundness, materialize new projects

Main
Progress

Response
to Changes

Proceeded with additional development in E&P projects, acquired new E&P projects overseasExpanded non-E&P business field, including commercial operation of Fukushima Natural Gas Power
Plant*2 and launched activities of renewable energy development

Started feasibility studies for CCS/CCUS*3 projects in and outside Japan

Improved financial soundness by optimizing business portfolio, mainly projects in CanadaExpanded shareholder returns by share buybacks



Irreversible changes in energy supply-demand structure due to movement toward decarbonization
 Lowered crude oil price assumption for medium-to-long term to 50USD/bbl in March 2021

Accelerated movement towards decarbonization in light of “Realizing Carbon-Neutral Society in 2050”
initiative by the government in 2020
 Formulated “JAPEX 2050” which sets forth JAPEX’s direction towards 2050 in May 2021

*1: Exploration, development, and Production of oil and gas*2: FGP=Fukushima Gas Power Co., Ltd. (33% of JAPEX shareholds), a company that operates Fukushima Natural Gas Power Plant*3: CCS=Carbon dioxide Capture and Storage, CCUS＝Carbon dioxide Capture, Utilization, and Storage
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1

Assumption of Formulation and Basic Policy
Formulated as Medium- to Long-term Management Plan for FY2022-2030
 Assumption: New management plan to respond to business environment quickly and flexiblyChanges in our balance sheet (decrease in business assets and interest-bearing debt)
Long-term vision for transition of business structure based on “JAPEX 2050”

 Basic Policy: Improve profitability and build business foundation for 2030 and beyond

Business Fields
E&P

I/U*1

CN*2

Contribute to early expansion of
profit scale and respond to
low-carbonization

Transform business structure towithstand market changes and oil
price volatility

Contribute to smooth transition
to 2050 CN society

Continue to invest in
acquisition of new interestsand promote
low-carbon operations

Expand the profit scale ofrenewable energy
and other businesses

Launch CCS/CCUS
hub and cluster*3 model business
utilizing existing oil and gas fields
and others]

Achieve profit levels appropriate to capital costs and enhance shareholder returns*1: Infrastructure & Utility *2: CN＝Carbon Neutral*3: CCS/CCUS network that connects multiple CO2 emitter and CO2 storage sites
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2

Management Goals
Long-term Target for FY2030 and Mid-term Target for FY2026
 Quantitative target: Business Profit, ROE, Profit Composition
 Elements of Business Profit

FY2030
FY2026
Business Profit

30 Billion Yen
ROE 5%

E&P：non-E&Ps

６：４*Total of business profit of each businessfields (P.7-9), excluding head officeadministrative expenses

Business Profit
50 Billion Yen
ROE 8％

Operating profit
Profit of entities accounted forusing equity method and others*1

 Contents of non-E&Ps
E&P：non-E&Ps

５：５

I/U (Domestic gas sales,
electricity sales, renewableenergy, consignment revenueetc.)
CN (Overseas CN projects)* Assumption Oil price (JCC)=50USD/bbl

 Carbon-Neutral Related Targets
 Launch CCS/CCUS prototype projects by hub and cluster model in our domestic oil and gas fields
Prospect for realization by FY2026, launch as model business by FY2030

 Reduce GHG emission intensity of JAPEX by 40% compared to FY2019
Start pilot trial at domestic oil and gas field by FY2026, and achieve target in FY2030*1:Including profits to be distributed under limited liability investment partnership and silent partnership agreements
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3

Fund Allocation
Allocate 500 billion yen to growth investments and shareholder returns
 Outlook of fund allocation (Cumulative of 9 years)
Cash In

Fund Allocation

Breakdown ofGrowth Investment

Additional development in Japan

30 billion yen

Overseas projects acquisition

200 billion yen

E&P
230 billion yen
Operating CF
380 billion yen

GrowthInvestments
450 billion yen

Domestic gas supply

I/U
170 billion yen

Cash on Hand＋
Bank Loans
120 billion yen

CN50 billion yen
Shareholder
Returns
50 billion yen

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4（Including existing infrastructures）

Overseas LNG supply infrastructures
Renewable energy development

40 billion yen
40 billion yen
90 billion yen

CN business development

50 billion yen

Shareholder Returns
Adopt a consolidated dividends payout ratio to enhance shareholder returns
 Change in Basic policy
 Pay dividends in line with financial results each fiscal year with a target payout ratio of 30% from FY2022
 Strive to maintain annual dividends of ¥50 per share even in a temporary downturn in business performance
Bar graphshows
dividends
amount(Yen)

Before: Long-term stable dividendwith basis of 50 Yen per year

After: Target payout ratio of 30%

40%

¥200

15.5%
40Yen

¥50

◆

-%
50Yen

-%
50Yen

◆

Copyright © 2022 Japan Petroleum Exploration Co., Ltd. All rights reserved.

20%

Business Profit
30 Billion Yen
ROE 5%FY2020

FY2021(Forecast)

5

30%

30%

FY2026(Image)Business Profit
50 Billion Yen
ROE 8%～～FY201930%～～

FY2018

10.4%
50Yen

◆

◆

¥150

¥100

Line graphshows
Dividend
payoutratio (%)

FY2030(Image)10%

Priority Items by Business Field
Invest to Grow and Promote Existing Projects in Each Business Field
Japan* New initiatives are underlined••

Promote existing projects
Acquire new interests•

Stable production in existing oil and gas
fieldsAdditional development in and around
existing oil and gas fields
Reduce GHG emission from operations•

Maintain and expand gas supply volumes•

Participate in projects of LNG supply
infrastructure development•

Continue stable operation of FGP power
plant

•

Steady progress in projects underdevelopment
Add more projects•

Consider participation in projects

Launch CCS/CCUS prototype projects by
hub and cluster model utilizing existing oil
and gas fields, etc.
Examine CO2 storage capacity in existing oil
and gas fields etc.

•

Participate in CCS projects in systematicallyadvanced areas
Participate in feasibility studies on
CCS/CCUS in emerging countries

•
•

E&P

Gas Supply

I/U

Gas Power
Generation
Renewable
Energy

•
•

CN

CO2
Storage

OthersOverseas••

Consider next generation energy supply
infrastructure etc.

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6•

Priority Item-1: E&P
Contribute to early profit scale expansion and respond to low-carbonization
OverseasJapan Acquire new interests

 Continue to seek potentials
Additional development in existing fields andsurroundings including offshore exploration Reduce GHG emissions from operations
 Diversify business risks

Consider underground storage of associated CO2
generated in domestic E&P field operation Collaborate with consideration in otherbusiness fields
Consider mainly in North America and North Sea
with experiences from existing projects
Prioritize projects with early profit contribution
Continuously acquire assets with a certain scale,own various type assets, use price hedging

 Pursue carbon-neutral measureConsiderations of CCUS in existing oil and gas
fields etc.

Prefer to acquire natural gas assets, collaborate
with CCS/CCUS etc.

 Contribution to steady operation of
Existing projects including projects indevelopment phase Steady operation of existing oil and gas
fields

E&P Profit Target: FY2026 23 Billion Yen → FY2030 27Billion Yen
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7

Priority Item-2: I/U (Infrastructure/Utility)
Transform business structure to withstand market and oil price volatility
Japan

Overseas LNG supply infrastructure development

 Response to gas supply diversification
Provide energy services collaborating with city gas
suppliers and others Renewable energy

Launch ongoing projects and add new projects
Mainly target Southeast Asia with strong gas
demands

 Renewable energy

Add new projects: mainly biomass othercandidates such as offshore wind, photovoltaic,
and geothermal energies
Steadily progress projects under developmentConsider to participate in overseas projects

Our gas supply infrastructure applicable in overseas

 Stable gas supply and increase its volume
by maintaining domestic supply network
 Contribute to profit in electricity sales by
FGP power plant Competitive LNG Procurement and sales

LNG facilities
construction andoperation including
LNG terminals

High pressure gas
pipelines construction
and operation

Various LNG satellite
supply method
such as LNG tanktrucks and railways

I/U Profit Target: FY2026 1 Billion Yen → FY2030 2 Billion Yen
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8

Priority Item-3: CN (Carbon Neutral)
Contribute to a smooth transition for a Carbon-neutral Society in 2050
Japan

Overseas Participate in CCS/CCUS projects for early
profit earning and knowledge acquisition

 Launch CCS/CCUS prototype projects by
hub & cluster model

Mainly collaborate with existing oil and gas fields
and business entities emitting/utilizing CO2
Consider next-gen energy supply infrastructuresuch as CO2, hydrogen, and ammonia



Mainly in systematically advanced areas including
North America and Europe Participate in CCS/CCUS feasibility studies
in emerging countries

 Examine CO2 storage capacity in existing
oil and gas fields etc.

Consider mainly Southeast Asia, where demand is
expected to growOngoing Feasibility Studies

Ongoing Feasibility Studies•

Yufutsu Oil and Gas Field: Carbon recycling project withthe sector-coupling in Tomakomai•

CCUS joint feasibility study at Sukowati Oil Field inIndonesia with Pertamina and LEMIGAS•

Higashi-Niigata Gas Field: Collaborate with methanol
production using emitted CO2 at an adjacent plant(Injection of their surplus CO2 into the gas field)•

CCS joint feasibility study in Malaysia with Petronas

CN Profit Target: FY2026 1 Billion Yen → FY2030 2 Billion Yen
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Positioning of the Plan toward 2050
Contribute to CN-Society by oil & gas supply, renewable energy, and CCS/CCUS Future image from the Plan toward 2050 based on “JAPEX2050”

 Recognize that oil & gas will play a major role now and future: aim for both its stable supply and CN Society realization, not de-escalation
 FY2030: Expand I/U field businesses including renewable energy, prospect for realization of various energy supply by establishment of
CCS/CCUS business CN Society in 2050: As a comprehensive energy company, play a center role by CO2 storage in collaboration with other business operators for
capture, transportation, and utilization

 Priority items of the Plan and contributing fields in JAPEX2050 promotion
Management Plan
2022-2030
 Pursue potentials to development
in domestic oil and gas fields

E&P

I/U

 Acquire new overseas interests
 Inject associated CO2 generated
in domestic E&P field operation

Interest Acquisition and Development
StableSupply of
Oil andNatural Gas

 Renewable energy: add more
projects in Japan and overseas
 Participate in overseas LNG
supply infrastructure projects

 Hub & cluster model CCS/CCUS
prototype projects

CN

JAPEX2050: our direction and responsibility toward 2050

 Examine CO2 storage capacity inexisting oil and gas fields etc.
 Participate in overseas CCS/CCUS
projects
 Next-gen energy transportationand supply infrastructure, etc.

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 Recognize that oil and natural gas will remain as one of the major energy
sources Focus on the acquisition of oil and gas interests, as well as its
development and production continuously

Natural Gas Use Promotion

 Respond to the demand for fuel switching from other fossil fuel such ascoal and heavy oil Enforce our responses for meeting various future demands to LNG

Promote decarbonizationof oil & gas fields’
operation
Promote natural gas use
as lower environmental
impact energy source

CCS/CCUS
CCS/CCUS
and other
net-zerosolutions Realize and commercialize CCS/CCUS technologies
 Enter the business areas related to CCS/CCUS, such as blue hydrogen, methanation, and natural gas-fired
power plants with CCS

Renewable Energy

 BECCS (Biomass power generation with CCS/CCUS that enables negative emissions) Offshore wind power generation to leverage our E&P experience and expertise

Scope1+2

GHG
emission
reduction
target Reduce by 40% in FY2030 compared to FY2019 of CO2 emission intensity of the JAPEX group’s
operations
 Achieve the net-zero CO2 emission of our group’s operation in 2050

Scope3

 Contribute to establish new technologies and energy supply with low environmental impact, forachieving the net-zero CO2 emission in our supply chain

10

Timeline on each business field by FY2030
Aiming to strengthen E&P and I/U as well as to launch CCS/CCUS in CN
FY2026

FY2030

Reference：JAPEX2050
Images of realization and collaboration

Major actions of business fields on the Management Plan 2022-2030

E&P■Acquire new overseas interests

Examine for overseas interests acquisition/Contribute revenue and profit from acquired interests■Inject associated CO2 generated in domestic E&P field operation
Start a pilot operation

I/U

Contribute a certain scale of revenue and profit

Become a main profit factor in non E&P◆Participate in overseas LNG supply infrastructure projects
Launch operations in advanced projects

Launch more projects●Hub & cluster model CCS/CCUS prototype projects
Prospect for the 1st case realization

Start CO2 injection in the 1st case●Examine CO2 storage capacity in existing oil and gas fields etc.

Prospect a certain level toward 2050

●Participate overseas CCS/CCUS projects
Start earning profit from advanced projects

Pilot test/commercialization on several projects●Next-gen energy transportation and supply infrastructure, etc.
Prospect for managing CO2

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Prospect for managing hydrogen and ammonia

11

Promotion of Gas & LNG use••

Response to fuel switching
demands from other fossil fuels
Operate overseas LNG supply
infrastructure

CCS/CCUS as business••Hub & cluster type CCS/CCUS in
Japan
CCS/CCUS in emerging countries

Zero-emission electricity••

Expand renewable energy source
Thermal power generation with CCS

Negative-emission electricity•

BECCS (Biomass power with CCS)

Next-gen Energy Supply etc.
••

Construct supply infrastructure for
CO2, hydrogen, and ammonia
Collaborate with production ofhydrogen and ammonia

Net-zero in 2050•

Achieve net-zero in our operation

Mix or alternative supplyCN

Pursue domestic potentials
Proceed with overseas projects
Decarbonization

Collaboration◆Renewable energy: add more projects in Japan and overseas

■
■
■
◆
◆
●
●
●
●

•
•
•

Source supply

Additional development in Katagai Gas Field/Consider other domestic additional development

Stable supply of oil & gas

Increase production/low-carbonization■Pursue potentials to development in domestic oil and gas fields

Measures for Human Resource and Organization
HR management and organization for new business structure and fields
Enhance human capital management

Organization changes as of April 1, 2022

 Secure and assign human resources
following business changes

 Reorganize business units to promote new
management plan Secure human resources with skills required in new
business fields, and reassign to growth areas

 Reorganize Overseas Project Divisions

 Develop human resources for new fields

 Reorganize in Technical division Encourage each autonomous career development
Introduce career consulting, expand internal
personnel recruitment system, etc.

Enable to develop and deploy human resources forvarious business fields

Establish Carbon Neutral Technology Office
Reorganize Research CenterConsolidate functions of operations and managementof surface facilities in our business Strengthen company-wide support forbusiness deal execution and management

 Utilize human resources considering theirimprovement in engagement Based on the Diversity, Equity & Inclusion (DE&I)
policy Reorganize Gas Supply and Facilities Division

Reskilling program

Two division structures to develop new projects andpromote existing projects, etc.

Establish Deal Execution/PMI Support Dept.


Promotion of women, youngers, and seniors

Secure and develop human resources for DX

Centralize corporate departments’ expertise
Support new investment cases both engagement
procedures and investment value realization

Promote DX based on business issues

DX (Digital transformation) Measures
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12Addressing Climate Change
Link business and other contributions to management responsibility
Our commitment under “JAPEX2050”
Contribute to the CN society realization
through our business

Reduce GHG emissions
from business ourselves

Under the consideration that transition
to a CN society is our business opportunity,
aim to contribute to its realizationby promoting our business

Reduce 40% of CO2 emission intensity in FY2030(compared to FY2019 of Scope1+2)[Priority action items][Priority action items]







Expansion of renewable energy sources
Early realization of CCS/CCUS

Consider CO2 injection emitting from our oil and gas fields
Consider using zero-emission electricity at head office

Reflect annual results of our climate change response to executive compensation
Add the achievement level of company-wide climate change response objectives
to an annual evaluation items of executive officers from FY2022

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13

Appendix
P15 ① Current plan: Progress status of targets and indicators
P16 ② Current plan: Progress status of business profit
P17 ③ Management targets as of FY2026/2030 and sensitivity
P18 ➃ Fund allocation breakdown as of FY2026/2030
P19 ⑤ Business overview: Our oil and gas E&P sites
P20 ⑥ Business overview: I/U - Gas supply
P21 ⑦ Business overview: I/U - Electricity
P22 ⑧ Business overview: CN - CCS/CCUS
P23 ⑨ Corporate structure for CN business promotion
P24 ⑩ Our capabilities and possibilities in CCS/CCUS
P25 ⑪ Diversity, Equity & Inclusion (DE&I) Policy

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14

Appendix ①

Current plan: Progress status of targets and indicators
 Targets and Indicators toward FY2022 and progress in FY2018-2021
FY2018FY2019FY2020

FY2021
Forecast*1

Estimates at
FY2021 end

5％ or more

3.5

6.5

(0.7)

N/A

Unachieved

Domestic gas transaction volume

1.60 million tons

1.13

1.20

1.48

1.40

Unachieved

Electricity sales volume

2.8 billion kWh

0

0

3.0

3.0

Achieved

Interest-bearing debt

100～120 billion yen

151.7

140.8

118.7

5.7

Achieved

Debt-to-EBITDA ratioLess than 2.0 times

3.6

2.4

3.2

0.1

Achieved

Reserve Replacement Ratio*2(Long-term target)
Exceeded by 1

4.9

(0.1)

(0.7)

N/A

-

Target items
ROE

FY2022
Targets

Reduce by Progress on funding allocation for FY2019-2022 (4 years)
Items

Allocated amount(billion yen)

FY2019FY2020

FY2021
Forecast*1

Estimated
Cumulative total
for 3 years

Improve profitability of existing projects

Approx.60 billion yen

7.0

13.4

12.0

32.5

Reduce interest-bearing debt

Approx.55 billion yen

11.0

9.3

60.5

81.0

Growth investments

Approx.65 billion yen

1.0

8.8

15.6

25.4

Shareholder returns

Approx.9 billion yen or more

3.1

2.8

6.8

12.8

*1: Figures are based on business forecasts as of February 9, 2022 with recent performance-based adjustments.
*2: The ratio of growth in volume of proved reserves against production volume in a single fiscal year or other specific period of time.
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15

Appendix ②

Current plan: Progress status of business profit
 Business Profit by business field（FY2019 onwards*1）
Business field(billion yen)

FY2019FY2020

FY2021 Forecast *2

37.1

3.8

35.1

Infrastructure/Utility

（5.1）

11.9

1.6

Others

（5.7）

（5.7）

（6.9）

Total

26.2

10.0

29.8

E&P

 Business Profit by segment
Segment(billion yen)
FY2018FY2019FY2020

FY2021 Forecast *2

Japan

19.5

18.9

21.6

22.2

North America

(9.7)

3.4

(9.3)

1.7

Europe

(0.1)

(0.1)

(0.1)

(0.1)

Middle East

0.9

0.6

0.1

1.7

Others

12.3

11.8

6.1

13.6

Adjustments and Eliminations

(8.0)

(8.4)

(8.4)

(9.3)

Total

14.8

26.2

10.0

29.8

 Reference: Crude Oil Price Trend
Item

Crude Oil Price (JCC)(USD/bbl)

FY2018FY201971.95

FY202068.11*1: Disclosures began in FY 2019. *2: Figures are based on the earnings forecast as of February 9, 2022.
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16

FY2021 Forecast *2

42.91

70.21

Appendix ③

Management targets for FY2026/2030 and sensitivity
Business profit: billion yen

FY2030targets

29.8

30.0

50.0

E&P

35.1

23.0

27.0

I/U

1.6

12.0

27.0

CN

-

1.0

2.0

(6.9)

(6.0)

(6.0)

(Operating profit + equity in earnings of affiliates and other*2)(Breakdown)

FY2026targets

FY2021
Forecast*1

 Management targets

Others*3

ROE-

Approx.

5%

8%

Approx.

Profit composition ratio (E&P : Non-E&Ps)

9：1

6：4

5：5

Assumption of crude oil price (JCC: USD/bbl)

70.21

50.00

50.00

109.97110.00110.00Exchange rate assumption (JPY/USD)

Business profit
as of FY2026

 Oil price sensitivity in business profit target
Impact of a 1USD/bbl change in oil price：billion yen-*1: Figures are based on earnings forecast as of February 9, 2022.
*2: Including profits to be distributed under limited partnership and silent partnership agreements*3: Other revenue (contract service and oil products sales, etc.) less head office administrative expenses
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17

0.7

Business profit
as of FY2030

0.9

Appendix ➃Fund allocation breakdown as of FY2026/2030
 Cash-in assumption (billion yen)

Cumulative total
for FY2022-2026 (5 years)

Cumulative total
for FY2022-2030 (9 years)

Operating cash flow

200.0

380.0

Cash on hand + Bank loans

100.0

120.0

300.0

500.0

Cash-in total

 Cash-out assumption (billion yen)
Growthinvestment

E&P

I/U

CN

Cumulative total
for FY2022-2026 (5 years)

Cumulative total
for FY2022-2030 (9 years)

Japan -Additional development etc.

25.0

30.0

Overseas- new project acquisitions

120.0

200.0

Domestic gas supply(including existing facilities)

20.0

40.0

Overseas LNG supply infrastructuredevelopment

30.0

40.0

Renewable energy development

60.0

90.0

CN business development

20.0

50.0

275.0

450.0

25.0

50.0

300.0

500.0

total
Shareholder returns
Cash-out total
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18

Appendix ⑤

Business overview: Our oil and gas E&P sites
development andproduction site

[4] Russia・Sakhalin 1 Project*

O&G [3] UK North Sea: Seagull Project* Included in oursales profit

OIL[1] Iraq: Garraf Project*
OIL[5] United States:
Tight Oil Development*

O&G

OIL

[A] Japan: Domestic oil and gas fields*(10 sites in Hokkaido, Akita, Yamagata, and Niigata)[2] Indonesia・Kangean Project

Our affiliated oil and gas development
and production base

GAS

Japan
Overseas Our oil and gas E&P fields/projects (as of March 2022)

10 fields
5 projects

No.

Oil and gas field/Project title (operator)

Interest（JAPEX net）

production type

StatusGross Production
volume*1

A

Japan: Domestic oil and gas fields(Total of 10 locations in Hokkaido, Akita, Yamagata, and Niigata)

Differ by interest

Crude oil / natural gas

Production/
Additional Development

Undisclosed

1

Iraq: Garraff Project (PETRONAS Carigali Iraq Holding B.V.)

30% (16.5%)

Crude oil

Production/
Additional Development

80,000bbl/d2

Indonesia: Kangean Project (Kangean Energy Indonesia Ltd.)

100％ (25%)

Natural gas

Production

4,560,000m3(28,000boed)

3

UK North Sea: Seagull Project (Neptune E&P UK Limited)

15% (15％)

Crude oil / natural gas

Development-

4

Russia: Sakhalin 1 Project (Exxon Neftegas Ltd.*2)

30% (4.59%)

Crude oil

Production/
Development

Undisclosed

5

North America: Tight Oil Development(Marathon Oil Corporation and several other interests)

Differ by interest

Crude oil

Production/
Development

Undisclosed*1:Average daily production for FY2021 (Jan-Dec 2021 for overseas projects). *2: On March 1, 2022 (local time) Exxon Mobil, parent company of operator Exxon Neftegas Limited, announced its exit policy.
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19

Appendix ⑥

Business overview: I/U - Gas supply
Features of JAPEX's domestic gas supply network

High-pressure gas pipeline network over 800 km total

2 LNG terminals for ocean-going carriers

Capable to supply from Sea of Japan and Pacific Ocean Domestic gas supplyDomestic produced gas and regasified LNG supply via pipelines
Receive, storage, regasify, and deliver LNG
LNG satellite system: tank trucks, tank containers on rail, domestic vessels)
Third-party or consignment use of our gas pipelines and LNG terminals etc.

 Respond to diversification of domestic gas
supplySupport fuel switching to natural gas from other fossil fuels
Propose and provide energy services in cooperation with city
gas suppliers LNG procurement
Procure competitive LNG with a combination of term and spot
contracts Overseas LNG supply infrastructure

Launch new projects or other process mainly in Southeast Asiawith stronger demands for gasOngoing feasibility study: Northern Vietnam LNG terminal project

Copyright © 2022 Japan Petroleum Exploration Co., Ltd. All rights reserved.

20

Appendix ⑦

Business overview: I/U - Electricity
Total

6 sites(Renewable energy 5 sites[1] Abashiri Biomass
BIO
Power Plant No.2&3

Total output 1,339,550kW[2] Mega solar power generation
at JAPEX Hokkaido District Office*Renewable energy 159,550kW)PV[3] Yufutsu Solar Power Plant

PV Power plants in development and operation (as of March 2022)
No.

Power plant

Location

Type

Capacity
(kW)

Share

StatusA

Fukushima Natural Gas Power Plant

Shinchi Town,
Fukushima

Natural gas(LNG)

1,180,00
033%

In operation

1

Abashiri Biomass Power Plant No.2&3

Abashiri City,
Hokkaido

Biomass(wood chip)

19,80094.3%

In development2

Mega solar power generation
at Japex Hokkaido District Office

Tomakomai City,
Hokkaido

PV

1,800

100%

In operation

3

Yufutsu Solar Power Plant

Tomakomai City,
HokkaidoPV13,00020%

In operation

4

Ozu Biomass Power Plant

Ozu City, Ehime

Biomass(wood pellet)

50,00035%

Development
Decided5

Chofu Biomass Power Plant

Shimonoseki
City, Yamaguchi

Biomass(wood pellet)

74,95039.9%

Development
Decided[A] Fukushima Natural Gas Power Plant

LNG

 Other renewable energy project

PHOTON Sustainable Solar Investment Limited Partnership(funding up to 10 billion yen in PV generation projects including
non-FIT projects; 50% of our investment ratio)[4] Ozu Biomass Power Plant

BIO

BIO

Renewable power plant[5] Chofu Biomass Power Plant
Copyright © 2022 Japan Petroleum Exploration Co., Ltd. All rights reserved.

Gas power plant

21* Included in oursales profit

Appendix ⑧

Business overview: CN - CCS/CCUS Required factors to realize a hub & cluster CCS/CCUS
Verification and Establishment ofTechnology

 Survey of suitable sites for CO2 storage andamounts that can be stored CO2 capture and transportation technology
 CO2 indention and storage technology• Including stored CO2 monitoring

Inter-company and Cross-industry

Examination and Development of Collection of CO2 from emitting sites

 Legal system for CO2 underground storage

Collaboration

Legal Systems, etc.

＋  CO transportation network construction ＋  Appropriate system of CO transportation
2

Transportation to utilization
destinations and collection surpluses Underground storage of surplus CO2•

2

infrastructures with publicness
 CO2 trading system• Including collaboration with overseas
CO2 trading Ongoing CCS/CCUS initiatives to promote/participate in (as of March 2022)
Japan

Overseas

Realize hub & cluster model by FY2030

 Consideration in JAPEX Examination of CO2 storage capacity in our oil and gas fields, etc.
 Study of re-injection of associated CO2 from our oil and gas field
operations
 Feasibility study with companies/cross-industry
 Feasibility study on carbon recycling business utilizing interindustry collaboration in the Tomakomai area with Deloitte
Tohmatsu Consulting as a NEDO-commissioned project Feasibility study of a business in the Niigata area that makes
effective use of CO2 with Mitsubishi Gas ChemicalCommon

Early profit earning in advanced countries& consideration in emerging countries

 Consideration in JAPEX
 Consideration for participation in CCS/CCUS projects in North
America, Europe and other systematically advanced areas
 Feasibility study on companies/cross-industry
 Joint feasibility study of a CCUS project in Indonesia's
Sukowati oil field utilizing bilateral credits with Pertamina
Group and Remigas
 Joint CCS study in Malaysia including a survey of suitable sites
and technical studies with a view to implementing CO2
underground storage with PETRONAS Technical and other related study Study on technical issues of energy transportation infrastructure for the realization of a CN society with JFE Engineering

Copyright © 2022 Japan Petroleum Exploration Co., Ltd. All rights reserved.

22

Appendix ⑨

Corporate structure for CN business promotion
 Establish CN Business Promotion Committee on April 1, by the executives of related divisions
Promote company-wide initiatives for CN-related businesses with a focus on CO2 underground storage-related businesses,
including renewable energy

Executive Committee
ReportCooperate

CN Business Promotion Committee

Sustainability
Committee

Established as necessaryTechnical Committee

Committee Chair：Executive in charge of CN-related business
Secretariat：Corporate Strategy Dept.

Consider management plan
Formulate the basic policy
such as code of ethics andconduct, ESG
Deliberate on importantmatters related to the above

Professionalorganizations
such as CCUS council
of practitioners
for commercialization

Cooperate(Consider CCS/CCUS commercialization in Japan)(Consider commercialization of CN projects in Japan)

Domestic E&P Project Division/ Carbon Reduction Project office

CN Business Dept.,
Overseas Business Division II(Low-carbonization of oil and gas field operations)（Consider participation in overseas CN businesses）

Facility Engineering Dept.,
Gas Supply & Facility Engineering Division

Carbon Neutral Technology Dept.,
Technical Division(CN-related technology support)（Surface equipment planning and operation for business）

Marketing & Sales Division

Power Business Division(Gas sales expansion)（Renewable energy development）

HSE Dept.

Overseas Business Division I(Security and Safety)(Manage overseas businesses and projects)

Copyright © 2022 Japan Petroleum Exploration Co., Ltd. All rights reserved.



New Business Promotion Dept.

Environmental Business Promotion Dept.

Report

23

Formulate technicalstrategies to support
smooth business operation,
solve problems, andenhance competitiveness
Formulate and evaluate
implementing actions of
the technical strategies

Cooperate

Cooperate

CN Technology Laboratory,
Research Center,
Technical Division(CN technology support and development)

Appendix ⑩

Our capabilities and possibilities in CCS/CCUS
Subsurface investigation (Geophysical Exploration)

Well drilling from land to subsea floor

Well management/monitoring

Select candidate locations for CCS/CCUS, and execute CO2 injection, storage, and monitoring Technical capabilities to complete all elements in the JAPEX group for realization including exploration, drilling, and monitoring Utilize the data concerning deep saline aquifers*, acquired by our investigations and explorations in Japan

Capture CO2

Inject and Store CO2

Utilize CO2

Transport CO2

Transport separated and captured CO2

Collaborate and Enter Carbon-Neutral Business Apply CCS/CCUS to power generation by gas and biomass
 Consider to enter blue hydrogen and methanation business Establish CO2 transportation infrastructures leveraging
our expertize in natural gas and LNG supply

Focus on gas-fired
and biomass plant,
includingfacility owned byother companies

Such ashigh-pressure gas pipeline
and coastal vessels[Blue Hydrogen]
Discompose
natural gas,and capture CO2
after production

H2Note) * Sandstone layer in deep underground that includes ancient sea water (salt water) which are not suitable for drinking. Its geographical distributions are broader compared to oil and natural gas reservoirs, and CO2 storage capacity is anticipated.

Copyright © 2022 Japan Petroleum Exploration Co., Ltd. All rights reserved.

24[Methanation] Produce
Methane (CH4)from H2
and CO2
CH4

Appendix ⑪

Diversity, Equity & Inclusion (DE&I) Policy Basic Policy (Established in December 2021)

 JAPEX diversity policy established in 2016 revised to incorporate the concepts of equity and inclusion

JAPEX Diversity, Equity & Inclusion (DE&I) Policy（Established in December 2021）
In order to respond to changes in the business environment and achieve further growth as a comprehensive energy company, we regard the promotion ofdiversity, equity and inclusion (DE&I) as an important management issue, and aim to strengthen our corporate competitiveness and achieve sustainable
development. To this end, we enable our diverse employees to create new value by encouraging each and every one to play their active role and grow theircareers through fully demonstrating their inherent capabilities.
By respecting diversity in terms of gender, nationality, age, disability, career, personality, and values, and by correcting social imbalances caused by thesecharacteristics and differences, we will realize an organizational culture in which all employees can be productive and active.

 Foster an organizational culture that makes the most of diversity

We seek to improve productivity and create innovation by fostering an organizational culture to make the most of their individual characteristics and qualitiesof all employees, with positively accepting diversity and respecting differences.

 Promote the activities of diverse human resources

By securing outstanding talents regardless of gender, nationality, age, etc., and by providing timely and appropriate placement and training as well as
providing support for career and skill development tailored to each employee, we put in place a system that allows all human resources to demonstrate theircapabilities and play their active role as self-directed professionals, thereby increasing individual engagement.

 Create an environment that respects diversity

We promote the development of a work environment that allows employees to exert themselves to the fullest in all situations, taking into consideration thecircumstances and characteristics of each individual, including childcare, nursing care, disabilities, and LGBTQ+.

 Targets under the DE&I Policy
Promotion of women Number of female managers:
25 or more by the end of FY2025
 Ratio of female new graduates：
30% or more each year

Copyright © 2022 Japan Petroleum Exploration Co., Ltd. All rights reserved.

Career recruitment
 Ratio of mid-career hires inmanagement positions：maintain
20% or more until FY2025
 Ratio of mid-career hires to total
hires：50% or more each year
25

Ratio of childcare leave Ratio of male employees taking
childcare leave：80% or more by
FY2025Essential Energies for Essential Needs

Japan Petroleum Exploration Co., Ltd.

Copyright © 2022 Japan Petroleum Exploration Co., Ltd. All rights reserved.

26