DX and HRX for future refineries

2024.01.25
Cosmo Oil Co.,Ltd.

CONFIDENTIAL

(1) Cosmo Oil's position within the Cosmo Energy GroupCONFIDENTIAL

Company Profile of Cosmo Oil Co.,Ltd

Business Portfolio of Cosmo Energy Group

Core Petroleum BusinessPetrochemical Business(K TPY)
Para-Xylene: 1,360
Benzene:735
Mixed xylene: 618
Ethylene:
1,293

＜E&P＞
Crude Oil Production
45 K BPD

Power Generation Business＜Refining＞
CDU Capacity：
363 K BPD
(3 refineries)＜Marketing＞
Sales Volume
25,023 Thousand KL
Number of Gas Stations
2,695＜Wind Power＞ ＜Solar Power＞ ＜STM Power＞
Generation
Generation
Generation
Capacity:
Capacity:
Capacity:
24 mW
230 mW
300 mW(2) Refinery's goal for VISION 2030

CONFIDENTIAL

VisionVision 2030
To create energy that shapes the future,energy that sustains society, and new forms of value

Bolster green
electricity supply chain

Expand nextgeneration energy

Build a high value-added
supply chain that encompasses
power generation, supply-demand
adjustment and sales

Supply SAF and develop hydrogen andother energy businesses

Strengthen competitivenessof Oil Business and pursue
low carbonization
Enhance competitiveness by digitizing
refineries, etc. and shift to low-carbon
operations through CCS/CCUS

Vision 2030_Bolster green electricity supply chain

Renewable
Expandenergy generation

2,000 MW(Wind power ≥1,500 MW)

Development
capabilities/pipeline
Onshore wind power:
current capacity

300MW
Onshore wind power:planned capacity

600MW

Supply-demand
adjustment/storage

Build

Stored power 500 MW

Power storage businessvalidation start (FY2023-)

Green electricity sales

Expand

4.0 bil. kWh

Existing customer
network

MarketConsumers
Installation of storage batteriesat power plants/grid-scalestorage systems

Cosmo Denki
GreenIntroduced atover
1,000 sites

Cosmo Zero Carbon
Solution

RExEV
solution(of which 400 MW is underconstruction/development)

Offshore wind power:planned capacity

5 mil. app
downloads

600MW

Cosmo My Car Lease

Lease contracts
60,000
Eco Card signed for cum. total of
100,000 vehicles
holders

Integrated development/O&M framework©︎ 2023 COSMO ENERGY HOLDINGS

6

Vision2030_Expand next-generation energy
Mass production of Japan’s
first locally-made SAF
SAF
production
Established LLC

Equipment
manufacturing◎Considering partnering with Iwatani Corp.
Operation of hydrogen station for trucks
Scheduled to openin FY2024

300,000 KL

Use of existing assets for entry into hydrogen supply chain

First inJapan◎ Exploring new hydrogen production technologies(turquoise hydrogen)

30,000 KL
2025

Entry into hydrogen supply chain

ATJtechnology

SAF production
Waste cooking oil
take-back

Development of hydrogen andother energy businesses

Joint development with Toda Kogyo Corp.

2030
Expand production scale

Produce SAF using Alcohol to JET (ATJ) technology
Produce SAF from waste cooking oil raw materials*In addition, we will undertake R&D and proof-of-concept testing for
waste plastic recycling as well as ammonia, synthetic and other fuels.

Strategicinvestment

Ordinary profit(2030)

CO2 reduction(vs. 2013)(-2030 eight-year cumulative)¥100.0 bil.

©︎ 2023 COSMO ENERGY HOLDINGS¥10.0 bil. -400,000 tons7Current Status and Opportunity in Refinery Operations
and Directions for Improvement

Refinery operations face challenges in terms of “people” ”processes”, and“assets”, making continuous improvement crucial. We believe that the five
directions of improvement centered on DX will be the key.
Challenges faced in refinery operations

PEOPLE✓ It is difficult to recruit new graduates dueto the declining birthrate, and it will bedifficult to secure a sufficient labor force
in the future due to the outflow due tojob changes.

✓ Data is not centrally managed in thesystem, resulting in inefficient manual
PROCESS
offline work

Direction of Improvement
12

34ASSET✓ Many of the assets were installed morethan 50 years ago, and the reliability ofthe equipment is deteriorating as theyage.

BERESPONSIVE
BEPREDICTIBLE➢ Adapts to market conditions andexternal environment. Realize agile
operations that pursue revenuemaximization➢ Use analytics to transform reactive
operations from passive topredictive

BEINTEGRATED➢ Clarification of operational value
levers across refineries anddependencies between refineries

WORKDIGITALLY➢ Maximize digital use to eliminate
manual work as much as possible
and improve skills and capabilities

5OPERATE

SAFELY➢ Reduce incidents and operating
errors, and realize safer
maintenance work realized by“human + machine"What should refineries look like in 2030?

External environment

Concept required for refineries Success factors for realization

Domestic Fuel oil demand
170 million kL in 2030(2017 vs ▲23%)

In Asset Light Toward astructure thatmaximizes profits(Ethylene in 18年→+33% in 27)

Utilizing oil refining
facilities Increasing
production of
petrochemical products

Flexible and optimal
production planningaccording to market
conditions and supply and
DemandWorking-age population toreach 67 million by 2030
(2020 vs ▲8%)

From human-dependent
operation to selfsustaining refinery

Data-driven AI
decision-making

Establishing work fromhome/ About 80% of jobhunting students I want towork from home

Transform into an
attractive work
environment.

Breaking away fromthe old way→Refinery operations
from home

Achieving the Carbon
Neutrality Target by2050

Further acceleration ofCN & energy-saving

Selection of measuresthrough highly accurate
simulations

NEE
D Global demand for petrochemical
S Continued strong performance

RECRUI
TC
N

What to do

Joint O&M
investment decisions
It is necessary to build an
integrated platformthat is not an individual
solution

It takes time to build,so it is essential to startmoving now with aneye on the futureDigitalization concept for refineries

By promoting the digitalization of refineries and utilizing advanced technologies, we willachieve the following two points and achieve a high level of safe operation.
• Improvement of safety and operational availability by improving equipment reliability andearly detection of abnormalities• Realization of an efficient work environment with maximum productivity
Target in 10 years"Humans, AI and robots collaborate" refinery②AI-based decision support (data analysis)①Utilization of sensing technology (data collection)

Data analysis is performed by AI, and humans
make decisions and execute based on the results.

Data collection by high-performance sensors,
cameras, robots, etc.

CloudAI data analysis③Centralized data management with an integrated data platform
Centralized management of data scatteredacross each department Get the data youneed ⇒, when you need it, quickly

Operation

部署名 Rounds

Historian

P&ID

Procedure

Data Platform

Combine and analyze various data

Maitenance
APM

３D/VR

Inspection

HES
Duucument

incident

Law

Vision2030_ Strengthen competitiveness of Oil Business

To transform the way of working in refineries by 2030, we will work on theadvancement of data utilization and equipment inspections using robots.
Digital twin of refineryRealizing the world view of Google
Maps in refineries

Equipment Inspection by Robot
Efficient equipment inspections utilizing
robots, not just people■ Shift employees' core work to judging the results of AI and robot analysis and further
tuning of AI, etc.
■ Create a digital twin to realize an efficient work environment that is not restricted bylocation.

(3) HRX positioned within the three transformations

CONFIDENTIAL

Management Foundation Transformation
PolicyFY2023

FY2024FY2025KPI

Introduce compensation system to boost motivation (increase wages)

Pursue a people
strategy thatHRX motivates employees
and harnesses theirskills

Bolster autonomous career development (expand/improve job challenge system)

Engagementindex≥60 point

Increase investment in strengthening HR and employees’ skill(double investment in HR development)

Step up recruitment of women/mid-career hires(double proportion of female managers, achieve ratio of 50% mid-career hires)

HR dev.
investment¥180,000/person

Strengthen competitiveness of existing businesses/operations through DX
Cultivate core digital personnel and hold DX Forum

DXTransformbusiness modelthrough digital
capabilities andchangemanagement

Upgrade data utilization infrastructure and strengthen data governance
Leverage data analysis in development of New businesses

Core digital
personnel

900 people

Complete shift topaperless operations
Increase operational efficiency leveraging IT/DX

GX

Realize roadmap toachieve net zerocarbon emissions

Realize roadmap for net zero carbon emissions

2030
GHG emissions
reduction≥-30%(vs. 2013)©︎ 2023 COSMO ENERGY HOLDINGS

13

Human Resource Requirements to Achieve Vison 2030

Challenge

・Discover issues on your own and take on challenges without
turning away from them.

・Do not be afraid of "friction" and express your own opinions
to pursue better results.

Develop・Each employee decides their own career vision andcontinuously develops their abilities.

・Accept the diversity of our members and support thedevelopment of their abilities to realize their careers.

Master・Each employee will define and improve their own axis ofexpertise and apply them to their work.

・Pursue own business results and carry them through to theend.

Cosmo's Actions for Human Resource Requirements

・Job Challenge Program
Challenge

Develop・Assignment to new projects such as SAF and wind power
generation

・Planned development and placement with a succession planin mind

・Clarification of one's own career vision, Introduction of a newtalent management system to clarify one's career vision

Master・Specialist positions will be institutionalized and operationalfrom FY2023.
・Utilization of safety engineers in refineries

Strengthen DX human resources

Key performance indicators for establishing DX promotion infrastructureand developing digital personnel

(4) Image of the human resources of 2030

CONFIDENTIAL

Image of the human Resources of 2030

⚫ Operation Availability⚫ Safety⚫ Stable⚫ Efficiency⚫ Economic⚫ Energy

Oil Business（Refinery）

DX/ITDevelopment of Core Digital
Personnel⚫ Data strategists⚫ Data engineers⚫ Data scientists

Resource Shift《Project Control》⚫ Period⚫ Cost⚫ Safety⚫ Quality

New
Business

OMS（OperationalManagement System）
New Graduates Hires
Mid-Career Hires
Senior Employment Extension
Outsourcing
Women’s Empowerment
OthersThankYou

CONFIDENTIAL