Japan Petroleum Exploration Co., Ltd.

Integrated Report 2022
For the Year Ended March 31, 2022

Corporate Vision & Code of Ethics and Conduct

Essential Energies for Essential Needs

Corporate Vision

The JAPEX Group Code of Ethics and Conduct

Contribute to society through stable supply of

To realize our Corporate Vision and remain a company trusted byenergy and address social issues towards

society, we hereby establish the JAPEX Group Code of Ethics andthe Sustainable Development Goals.

Conduct, which provides corporate ethics standards and principles
of action to be adhered to by all officers and employees.

● Explore, develop, produce, and distribute crude oil and natural gas athome and abroad.

1. Comply with applicable laws and regulations, and respect international codes of conduct.
2. Place top priority on HSE (health, safety, and environment).

● Further strengthen the natural gas supply chain, built on our domestic
infrastructure, by combining the electric power supply business.

3. Strive to maintain trust with stakeholders and to contribute to society.

● Contribute to resolving energy and climate change related challenges
towards a sustainable society through developing and commercializing
new technologies, drawing on our expertise.

5. Make efforts to create a good working environment.

● Achieve sustainable growth and maximize corporate value, while placing
top priority on maintaining trust with all stakeholders.

4. Respect the human rights of all people.
6. Engage in fair and free competition and maintain appropriate trading practices.
7. Maintain sound and transparent relationships with politicians, political parties, and government
officials/agencies.
8. Resolutely terminate any and all relationships with anti-social forces.
9. Pay careful attention to managing and protecting confidential information and personal/clients’ data.

JAPEX Integrated Report 2022 01

JAPEX’s History(Millions of yen)

350,000

JAPEX was established in 1955 as a company engaged in the exploration,
development, and production (E&P

) of oil and natural gas.

300,000

With stable energy supply as our mission, we aim to grow to a comprehensive energy

250,000

company, while contributing to the development of the E&P of oil and natural gas inJapan.

Net sales¥249,140 million

200,000
150,000
100,000
50,000*Non-consolidated net
sales up to 2002, andconsolidated net sales in2003 and later

0

1950

1960

1970

1980

1990

2000

2010

2020

Started as a national policy
concern to promote domestic
oil and gas exploration

Put its business on track by
successively discovering oil
fields in Japan

Expanded business regions
and promoted businessdiversification

Aim to grow as acomprehensive energy
company

E&P field
1955 Founded as a government-owned company
by the Law of Japan Petroleum Exploration
Co., Ltd.
1956 Discovered the Biratori Oil Field in
Hokkaido, the first oil field discovered by
JAPEX (In production from 1956 to 1961)

E&P field
1972 Discovered the Aga-oki Oil and Gas Field
in Niigata, the first ever offshore oil fielddiscovered since the establishment ofJapex Offshore Ltd. in 1971 (In production
from 1976 to 1998)
1989 Discovered Yufutsu Oil and Gas Field in
Hokkaido (In production from 1996)

E&P field
2003 Commenced commercial production ofbitumen in Hangingstone leases in Canada(End of our operation in 2021)
2007 Participated in the Kangean Project inIndonesia
Infrastructure & Utility field
1996 Commenced operation of the NiigataSendai Gas Pipeline

E&P field
2013 Participated in the Shale Gas Project inCanada (End of our participation in 2021)
2013 Commenced production of crude oil at the
Garraf Project in Iraq
2014 Participated in the Seagull Project in the
United Kingdom’s North Sea
Infrastructure & Utility field
2014 Commenced operation of the mega solar
project at the Hokkaido District Office2018 Commenced operation of the Soma LNG Terminal
2020 Commenced commercial operation of the
Fukushima Natural Gas Power Plant

JAPEX foundation ceremony (First Chairman AIKAWA Yoshisukeon the left front, First President MIMURA Kiichi on right front)

Aga-oki Platform
Niigata-Sendai Gas Pipeline

2000 Commenced rail transportation of LNG
tank containers
Carbon Neutral field
2008 Participated in funding Japan CCS Co.,
Ltd., which was established with the aimof creating practical applications for CCS
technologies in Japan

Fukushima Natural Gas Power Plant of Fukushima Gas Power Co., Ltd.

Carbon Neutral field
2019 Achieved our target of injecting 300,000
tons of CO2 in the Tomakomai CCS pilot test
conducted through Japan CCS Co., Ltd.
JAPEX Integrated Report 2022 02

JAPEX’s Strengths
JAPEX’s three strengths comprise the JAPEX Group’s comprehensive technical capabilities related to oil and gas exploration,
development, production (E&P), transportation and sales; domestic infrastructure that undergirds the stable supply of naturalgas; and trusted relationships with stakeholders that serve as the foundation of our business.

Technical capabilities in the E&P field● The JAPEX Group possesses comprehensive technical capabilities
that fully augment the entire E&P field.
Reference P.26 ➡︎Operator capabilities in the entire oil andgas supply chain● We possess operator capabilities that span the Group’s entire
supply chain, including the E&P field, transportation, regasificationof imported LNG, and natural gas power generation.

● In the Shiunji Gas Field in Niigata Prefecture, we are storing
domestic natural gas underground to help meet variable demandand ensure a stable supply of gas for emergencies.

The JAPEXGroup’scomprehensive
technical
capabilities

JAPEX’sStrengths

Resilientdomestic
infrastructure

Operator capabilities in the entire oil and gas
supply chain● Well drilling

Production● Borehole
surveys● Reservoir
evaluation● Facility
planning● Productionengineering

JGI, Inc.
Japan Petroleum Exploration Co., Ltd.

Exploration● Geologicalsurveys● Geophysicalexploration● Conversion
into electricity

GeophysicalSurveyingCo., Ltd.

SK ENGINEERING
CO., LTD.

North Japan
Japex
Security
Offshore Ltd. Service Co.,JAPEX SKS
Ltd.
Corporation

Japex
Pipeline Ltd.
FGP*

Delivery● Transportationand supply

GEOSYS,Inc.

Akita Natural
Shirone Gas
Gas PipelineCo., Ltd.
Co., Ltd.

*Fukushima Gas Power Co., Ltd.

Group

● We provide a stable supply of environmentally low-impact LNG
and natural gas through diverse means of transportation, suchas JAPEX’s own natural gas pipeline network and tank trucks,
coastal vessel.

Resilient system for stable operation of
infrastructure

Application of technical capabilities in theCN* field centered on CCS● We are working to create environmentally friendly businesses
that contribute to society’s decarbonization by leveraging thetechnologies and expertise cultivated in the E&P field.
*CN: Carbon Neutral Reference P.31 ➡︎Diverse gas supply network

Relationshipsof trust withstakeholders

Thorough safety and quality management
Contribution to local communities
Environmental conservation initiatives
Attractive workplace of choice● Since our founding, we have built relationships of trust bycontributing to local communities and holding dialogue withvarious stakeholders. These relationships have become thefoundation of our business. Reference P.52 ➡︎● We are building a system for stable operation of infrastructure
without major accidents and injuries. We have been able to ensure
safety during crises, such as the Great East Japan Earthquake,achieving quick recovery and restart of supply. Reference P.29 ➡︎Contributing to a stable supply of energy, which is
our mission, and the realization of a sustainable
society by leveraging our three strengths● The operation and additional developmentof domestic oil and gas fields drawing on thecomprehensive technical capabilities we havenurtured for many years will remain the foundationfor our stable cash flows. In addition, we aim forfurther growth in the E&P field by deploying ourtechnical capabilities and experience in exploration,
development, and production.
● We also remain committed to a stable supply of naturalgas, which is growing in importance as transition energy,
based on our resilient domestic infrastructure, including
pipelines and the Soma LNG Terminal, as well as the optimal
combination of domestic natural gas and overseas LNG.
Moreover, faced with increasing severity of power shortage,
we seek for further growth of our power business by
expanding the renewable energy business, while ensuring
the stable operation of the Fukushima Natural Gas Power
Plant which commenced commercial operation in 2020.
● We have internally developed all the CCS/CCUS
technologies, which have drawn attention as a last resort
for achieving carbon neutrality and are necessary for
operating the storage business, We also have worked tomeasure the storage potential of primarily domestic oil
and gas fields, and aim to launch the domestic CCS/CCUS
business by 2030 based on the trusted relationships withlocal communities we have nurtured for many years.
JAPEX Integrated Report 2022 03

INDEX

Foreword

Strategy

Initiatives to Support Value Creation

Corporate Vision & Code of Ethics and Conduct...........................01

Looking Back on Medium-term Business Plan 2018–2022
and Long-term Vision 2030.........................................................15

Integrity and Governance. . ..........................................................34

JAPEX’s History.........................................................................02
JAPEX’s Strengths.. ....................................................................03

JAPEX Management Plan 2022–2030...........................................16
Message from the Officer in charge of Finance & Accounting Dept.....19

Sustainability Management. . .......................................................43

JAPEX’s Vision

Human Resources Strategy......................................................22
Message from the Officer in charge of Human Resources Dept.. . .22

Stable and Sustainable Energy Supply....................................47●●

Outside Directors’ Roundtable Discussion..............................34●

Messages from Newly Appointed Outside Directors and Outside Audit & Supervisory Board Member.. ..35

HSE as Our Culture.. .................................................................50
Being a Good Neighbor. . ..........................................................52

President’s Message...................................................................05

Value Creation Through Business

The Employer of Choice...........................................................53

The JAPEX Group’s Value Creation Process.................................11

E&P Field...................................................................................24

JAPEX2050................................................................................12

Infrastructure/Utility Field.. ..........................................................27

Financial and Other Information

At a Glance...............................................................................09
What We Do..............................................................................10

Carbon Neutral Field................................................................30

Financial Highlights....................................................................57
Non-Financial Highlights. . ...........................................................58
External Evaluation. . ...................................................................59
Glossary....................................................................................60
Corporate Data...........................................................................61

Editorial Policy

Organizations Covered by This Report

This report, positioned as an important communication toolwith all our stakeholders including investors, is intended
to convey in an easy to understand way our initiatives tosustainably enhance our corporate value.
In doing so, this report highlights their connection to ourfinancial and non-financial data.
Integrated Report 2022 features the JAPEX Management
Plan 2022–2030 published in March 2022 and includes
an additional information about the Company’s strengths,
which are sources of its corporate value. The report isalso enhanced to cover additional corporate governanceinformation, such as the skills matrix of Directors andother officers and the round-table talks by outside officers
concerning the evaluation of the effectiveness of the Boardof Directors.

This report covers Japan Petroleum Exploration Co., Ltd.
(JAPEX), its 18 consolidated subsidiaries, and other Group
companies.

Reference Guidelines
METI, Guidance for Collaborative Value Creation
The Value Reporting Foundation (VRF),
International Integrated Reporting Framework

Reporting Period
Fiscal 2021 started on April 1, 2021 and ended March
31, 2022.
Some statements include data before March 31, 2021
or after April 1, 2022.

Disclosure Systems
WebsiteIR

Business- andFinance-related
Data

Integrated Reporthttps://www.japex.co.jp/en/ir/
Annual Securities Reporthttps://www.japex.co.jp/en/ir/library/report/

Issuing Date
October 2022 (Next issue: October 2023)

Disclaimer
This Integrated Report includes past and current facts about
JAPEX and its subsidiaries and associates, their plans andprospects as of the issuing date, as well as forecasts basedon their management plans and corporate management
policies. These forecasts represent management’s
assumptions or decisions based on information currently
available. Readers should be aware that actual results may
differ from these forecasts due to changes in the businessenvironment.

WebsiteNonfinancial
Data

https://www.japex.co.jp/en/
ir/library/integratedreport/

Sustainability

https://www.japex.co.jp/
en/sustainability/

JAPEX Integrated Report 2022 04

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

President’s Message

JAPEX's growth strategy for a
carbon-neutral society

FUJITA Masahiro
Representative Director and President
Chief Executive Officer

Introduction
With stable energy supply as its mission, JAPEX has long been engaged in oil and natural gas
E&P (Exploration & Production) in Japan and abroad. In Japan, we ensure stable supplies of gas
by our infrastructure including pipelines and LNG terminals, and provide electricity generated
from a natural gas-fired power plant and renewable energy sources. And we are struggling torealize early commercialization of CCS (Carbon dioxide Capture and Storage)/CCUS (Carbon
dioxide Capture, Utilization and Storage) as our main contribution to a carbon-neutral society.
Our business environment has been changed significantly. The Japanese government declared
the “Achievement of Carbon Neutrality by 2050” in October 2020 and it has been accelerating
to transfer from low-carbon to decarbonization gradually in the global trend. While this rapid andvigorous change of the trend might be a risk factor for our business structure over the medium
to long term, we will believe that this wave of momentum is an opportunity to make further
progress of our business.
Even as accelerating the moves toward decarbonization, the importance of oil and natural gas
will not change as the essential energy sources for the lives of people as well as demand for oiland natural gas will not have vanished in a carbon-neutral society by 2050. So we will carry out
our mission, the stable supplies of oil and natural gas now and future.
JAPEX Integrated Report 2022 05

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

President’s Message

On the other hand, there is the issue of how we will tackle climate change to realize aplan, we had proceed with the review of our overseas E&P business portfolio without exceptions.

carbon-neutral society. To resolve an issue to balance between the demand of oil/natural gas andBased on the conclusion that it would be difficult to early improve its earnings, we decided tothe decarbonization trends, we will realize the practical application of CCS/CCUS by leveraging

transfer our interests in the Canada Shale Gas project in May 2021 and end our business in

our technologies to the decarbonization of fossil fuels, for the contribution to solve climate

the Canada Oil Sands project in July 2021. Since both projects were the core business of ourchange as a social issue.

overseas E&P, we had made maximum efforts to improve their economic efficiency mainly by

Furthermore, we have been working to expand the utilization of natural gas as the lowest
environmental impact of all fossil fuels, which is the response to meet the demand for lower

optimizing operations. But we had to make these decisions, unfortunately.
As a result, we reported loss attributable to owners of parent of ¥30.9 billion in the consolidated

environmental impact energies for a low-carbon society, including a shift from coal and petroleum

financial results in fiscal 2021, mainly due to extraordinary losses associated by the decision

fuels. We are also realizing to participate in several renewable energy projects of biomass power

concerning the two projects. I, as President of JAPEX, am taking these facts that recorded suchgeneration and others, as a new business foundation for a carbon-neutral society. These initiatives

a large loss very seriously. We reflect on these experiences as facts and will use their learnings

will be accelerated as well going forward.

in our future corporate strategies and risk management.

Amid such increasing uncertainty in the external environment, our employees are the mostAs mentioned earlier, I have been conducting the business operations to realize every day

important factor and essential property for the company, for responding to new businessthat our business environment as well as we are in a period of great change. In the movement

structures and fields and supporting the backbone of our business foundation. With this in mind,of further progress to the decarbonization era, our challenges and investments in new business

we have clarified the policies for the strengthen our human capital management: secure and assign

fields are required for continuous growth. Moreover, a new management plan was necessary

human resources based on our business development, foster talents for new business fields, andto reflect our financial situation following the review of our overseas portfolio. In light of thoseutilize our personnel with considering the improvement of engagement. Of course, human resource

views, we formulated the JAPEX Management Plan 2022–2030 in March 2022, a medium- todevelopment includes training/hiring people who can drive DX (digital transformation). We will

long-term plan for the next nine years. From fiscal 2022, we are strengthening the efforts toproceed with our DX initiative from both perspectives of human resources and operational issues.

make further growth in line with this management plan.

Currently, according to the emergence of geopolitical risks since Russia invaded Ukraine in

Formulation of New Management Plan

February 2022, energy prices, including crude oil, have been remaining higher. The importanceof energy security is becoming keenly and increasingly felt in Japan, which depends on imports

We believe that oil and natural gas will continue to be essential energy sources for people’s dailyof resources from overseas. While building a resilient business foundation to withstand volatile

lives and business activities even in a carbon-neutral society that aims to be realized by 2050.

energy prices, we will steadily carry out the social mission we are taking part in to ensure stable

Based on this outlook, we formulated a new management plan to ensure stable energy supply

energy supply.

of our corporate vision and contribute to the realization of net zero by 2050, with the effort ofcontinuing to supply oil and natural gas as well as addressing the decarbonization of fossil fuels

Initiatives Taken in Fiscal 2021
In fiscal 2021, we made drastic decisions to adapt our business to the huge changes in the businessenvironment.
As a means to improve our financial position executing from the previous medium-term businessand development of various energy sources, including renewable energy.
In my recognition, our main business of E&P projects has an issue that is susceptible tovolatility in oil and gas prices. Therefore, I have thought we need to transform our corporate andbusiness structure to ensure stable earnings even in a low oil and gas price environment.

JAPEX Integrated Report 2022 06

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

President’s Message

At first, we lowered the crude oil CIF(cost, insurance, and freight) price assumption forour business strategy planning from USD60 per barrel to USD50 per barrel at the end of March
2021, recognizing the progress of global decarbonization and other factors. This change is basedon our medium- to long-term vision of becoming a company that can grow even the oil price of
USD50 per barrel.
The new management plan sets numerical targets to be achieved in fiscal 2030 and at the
midpoint in fiscal 2026 to strengthen profitability over the medium term and build a businessongoing projects in systematically advanced countries such as America and Europe as well as infeasibility studies in emerging countries.
In fiscal 2021, we were involved in CCS/CCUS feasibility studies in the Tomakomai area of
Hokkaido and the Niigata area in Japan, as well as in Indonesia and Malaysia overseas.
Our strength in promoting CCS/CCUS is the drilling obtained through E&P businessexperiences, such as subsurface investigation, excavation, and monitoring for undergroundstorage of CO2. And we can execute all of them within the JAPEX Group. In addition, we expect

foundation for the long term beyond fiscal 2030. Assuming an oil price of USD50 per barrel, weto leverage data on deep saline aquifers (layers where CO2 is expected to be stored) acquired

aim to achieve a business profit target of ¥50.0 billion for fiscal 2030 (¥30.0 billion for fiscal 2026),

in investigations and explorations in Japan to date, experience in the construction and operation

an ROE of 8% for fiscal 2030 (5% for fiscal 2026), and an E&P vs. non-E&P profit composition ofof gas supply facilities such as high-pressure pipelines for CO2 transportation. Furthermore, we

5:5 for fiscal 2030 (6:4 for fiscal 2026).

will be able to apply the expertise gained from a large-scale government CCS demonstration

For the achievement of the targets, we will focus on three key business fields: E&P, Infrastructureand Utilities (I/U), and Carbon Neutral (CN).
In the E&P field, we will emphasize acquiring new interests overseas and pursuing additional
development and offshore potential in Japan, and will also work to reduce carbon emissions

test in Tomakomai, Hokkaido conducted by Japan CCS Co., Ltd., in which JAPEX is the largest
shareholder. We will continue to working for the realization of CO2 underground storage, withour conscious of a leading company in this field.
We will steadily execute the new management plan, for the contribution to carbon-neutrality,from our operations. About the overseas assets, we have already succeeded in acquiring new

a net-zero society through the social implementation of CCS/CCUS. And, through these works,

overseas E&P assets by executing to explore and examine projects focused on candidates with

we aim to be a comprehensive energy company with our uniqueness, supplying a variety ofthe potential of early returns. In January and May 2022, we acquired the well interests based onenergy sources such as oil, natural gas, electricity, renewable energy, and others, as required by

the tight oil development plan in Texas, the United States. Although a large investment of $500

the times and society.

million for three years until 2024, this investment enable us to gain an early return and profit,

Aiming to respond to climate change, the achievement level of the corporate targets related

due to begin and increase tight oil production in stages from fiscal 2022. We will continue to be

to climate change has been included in the annual evaluations of executive officers and reflected

proactive in seeking new opportunities, mainly focusing on North America and the North Sea,in their officer compensation since FY2022. We have been clarifying the management attitude

where having our experiences and expertise.

toward our commitment to contribute to net zero emissions by 2050 and achieve our target of

In the I/U field, we will continue to promote the use of natural gas, the lowest environmental

GHG(greenhouse gas) emission reduction.

impact among fossil fuels, including support of fuel switching demand and engagement of energy
service provider contracts. We also aim to increase our participation in renewable energy projects. In
fiscal 2021, we participated in four biomass power generating projects and invested a PV investment

ESG Initiatives

fund. We are currently proceeding with the development of these projects to the commercial phase,

Regarding ESG (Environment, Social, and Governance), companies are required to address

aiming to transfer our business structure to the less susceptible to oil price fluctuations.

higher-level actions, tackling the issues on environmental ones such as climate change, social,

In the CN field, our main target is early implementation and commercialization of CCS/CCUS,

and governance.

expected to be the game changer for cutting net CO2 emissions reductions. We are working

For continuing to be a trust-worthy company, we formulated the five core CSR themes

to launch model projects of hub-and-cluster CCUS in Japan by fiscal 2030, and to participate in“SHINE” in 2014 and have been specifying the 12 individual challenges. Our ESG activities in
(See

p. 43

for details)

JAPEX Integrated Report 2022 07

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

President’s Message

the business have been set and executed annual target and action plan based on the above

the new management plan, we will make steady progress as we move on to the next step ofinitiatives and challenges. Fiscal 2021 also saw progress.

devising and executing DX strategies that address actual operational issues.

Concerning environment, we are taking action mainly to wrestle with climate change. As
worked to develop the new management plan, we did a scenario analysis based on the TCFD
recommendations and held discussions about a sustainable business portfolio based on the results

Conclusionof the analysis. We are also expanding the climate-related disclosures, such as the disclosure of

As President since October 2019, I have been believed dialogue with employees about our current

environmental data submitted to the CDP starting from FY2021.

circumstances and direction to the future. So we have been held the town hall meetings twice

As for social, we established the JAPEX Diversity, Equity & Inclusion (DE&I) Policy in December

a year, to report from me and enhance Q&A session. In addition, I have been sent my message

2021, which is updated the JAPEX Diversity Policy established in 2016, to incorporate the concepts

since February 2021, named the “President’s Channel,” to all staffs of the JAPEX Group aboutof equity and inclusion. Based on this policy, we have set targets and action plans for enabling

once a month.

diverse talent to thrive and for supporting career development, and are already taking concrete
steps in these areas.
With respect to governance, we established the Risk Management Committee and theI also wanted to increase direct dialogue with individual employees and resumed to visit ourbusiness sites in Japan in October 2021, while considering the COVID-19 situation. We havealso been held opinion-exchange meetings for employees and officers, including myself, who

Sustainability Committee in April 2021 to strengthen our risk management structure. For moreare matched with participants’ wish. Participants of younger employees are increasing with each

efficient use of our assets, we sold a portion of our cross-shareholdings in November 2021,

meeting.

based on the periodic checks on the rationale of cross-shareholdings. Furthermore, to returnFiscal 2022 is very important year as the first year of a fresh start toward fiscal 2030 in line

value to shareholders and improve our capital efficiency, we decided to repurchase our own

with the new management plan and the realization of a carbon-neutral society by 2050 as theshares and cancel all of them for the first time since becoming a listed company. A portion ofgoal of “JAPEX2050.” By proactively communicating with and listening carefully to the voices

the proceeds from the sale of cross-shareholdings is used to fund the acquisition.

of employees, I will foster a corporate culture in which all employees can work autonomously

In the new management plan, enhancement of human capital management and further persuationof DX (digital transformation) are our initiatives for delivering sustainable management.
With regard to human capital management, we will focus on securing personnel with theskills required for new business fields and redeploying talent to growth fields in anticipation of

toward the same goals and aim to our further growth.
I would like to ask all
our stakeholders for theircontinued understanding andthe future development of our business. To address the need for personnel who are expectedsupport for the Company forto develop new business domains, we will execute both recruit mid-career hires and develop

many years to come.

existing human resources. To this end, we will support employees in developing their careers
independently by offering career consulting and expanding the open recruitment system as wellas early launching of the reskilling program.
As for DX, we recognize it as a critical management task for our future transformation. In
the past few years, we have been focusing on the digitalization of corporate shared systems
and operations to lay the groundwork for DX, and have also endeavored to develop DX-capable
personnel by assigning people to work on these digitalization projects. From now on, under

JAPEX Integrated Report 2022 08

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

At a Glance
Taking internal and external environment into account,
JAPEX will strive to grow, centered around the E&P, Infrastructure/Utility, and Carbon Neutral Businesses.

E&P Field
Overview

Since its founding, JAPEX has been involved in
the upstream oil and natural gas of exploration,
development, and production. Today, we operate
10 oil and natural gas fields in Japan, whilepursuing additional development at existing oil
and gas fields and their surrounding areas as well
as exploration to discover new fields. Overseas,
we are engaged in development and production
at five locations as well as participating indevelopment projects such as offshore or
unconventional resources development, throughwhich accumulate knowledge. We have racked
up numerous accomplishments in Japan andoverseas. The wide range of technologies andexpertise we have accumulated over time havecontributed to the stable supply of energy.

Carbon Neutral Field*2
Overview

Financial Results of the E&P Business■Net sales ■Operating profit ■Business profit*1 (Billions of yen)
175.4

97.4

73.4

25.2

37.1

22.8

37.1

(2.2) 3.8

0
2019

2021

2020

(FY)

Infrastructure/Utility Field
Overview

To meet energy demand in Japan, we utilize
a combination of our supply infrastructure,such as high-pressure gas pipelines and
LNG terminals, and transportation systems
using tank trucks and coastal vessels,
thereby securing stable supply of domestic
natural gas, regasified LNG, and LNG in
the broad areas including Hokkaido andTohoku regions. In addition, we will seek
to transform our business structure towithstand market changes such as oil
price volatility through the natural gas-fired
power generation at the Fukushima Natural
Gas Power Plant located at Soma Port inFukushima as well as the renewable energy
business.

In order to contribute to smooth transition
to a carbon-neural society in 2050, we
have been working to establish andcommercialize CO2 underground storage
technology, which we have developed
utilizing our accumulated knowledgeof oil and natural gas development andproduction. Aiming for an early launch of
the domestic CCS/CCUS model businesswhere several companies and businesslocations have participated, we areconducting feasibility studies in Hokkaido,
Niigata, and other locations. We havealso newly participated in such feasibility
studies overseas in Indonesia andMalaysia.

CO2 separationand capture

CO2 injection
and storage

Other

Financial Results of the Infrastructure/Utility Business■Net sales ■Operating profit ■Business profit*1 (Billions of yen)

119.8
101.3

Overview

Other businesses cover businesses not
attributable to the E&P or Infrastructure/
Utility fields, including contract services
and sale of oil products. (Operating profit
includes headquarters administrative
expenses.)Financial Results of the Other Businesses■Net sales ■Operating profit ■Business profit*1 (Billions of yen)

55.8

54.6
41.2

88.6

12.2 11.9
0(5.2) (5.1)
2019

2020

3.5 3.1
2021

0
(FY)

(5.7) (5.7)(5.7) (5.7)(6.5) (6.4)

2019

2020

2021

*1 The sum of operating profit and share of profit of entities accounted for using equity method (including profits to be distributed under limited partnership and silent partnership agreements)*2 Although we consider the Carbon Neutral field as one of the “three main areas”, our financial results are explained for the E&P, Infrastructure/Utility, and Other businesses because the Carbon Neutral field has not contributed to sales or profits.

(FY)

JAPEX Integrated Report 2022 09

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

What We Do
As indicated in JAPEX2050: Toward a carbon-neutral society, we have positioned the E&P field, the Infrastructure/Utility (I/U) field, and the Carbon Neutral (CN) field
as areas of key importance as a comprehensive energy company that contributes to net-zero greenhouse gas emissions in 2050.

I/U Field
Wind-power generation

Woodchip carrier

LNG vessel

Biomass power generation
Natural gas-fired power plant

LNG terminal

Solar power generation

LNG tanker truck
CCS/CCUSElectricity

CN Field

Onshore rig

Oil and natural gas

Natural gas pipeline

Production well

CO2

Smart city

Onshore geophysical exploration

E&P Field

Offshore rig

Crude oil tanks

Crude oil tanker

Offshore geophysical exploration
Deep-sea mineral resources survey
Methane hydrate

JAPEX Integrated Report 2022 10

JAPEX’s Vision

Strategy

Value Creation through Business

The JAPEX Group’s Value Creation Process

Input

Increasing importance of ESG management• Rising calls from stakeholders for enhanced
disclosure and stronger responses

Business Model

Output(FY2021 results)

Financial capital

P.57 

 Shareholders’ equity: ¥323.6 billion
 Interest-bearing debt: ¥6.1 billion
 Equity ratio: 78.7%

Production capital(FY2021 results)

Intellectual and human capital

P.24-32  Development and operational capabilities of the-¥1.0 billion

Securing stablesupply of oil andnatural gas

Utilizing E&P
technologies
for CCS

E&P field
P.24 

Resilient domestic
infrastructure

The JAPEX Group’s comprehensive
technical capabilities

Relationships of trustwith stakeholders
Infrastructure/
Utility field
P.27 

Strengths
P.3 

P.52 

 Relationships of trust with operating regions

and clients

 Support of the Japanese government
 Continuous partnership with oil-producing

countries for over 40 years

Natural capital

P.24 

P.31 

 Proved reserves: 159 million boe Domestic oil and gas fields that can be used for

CCS/CCUS and adjusting supply and demand

P.24-27  Production volume:

57 thousand boe/day Natural gas transaction volume:

External evaluation

CN fieldcentered on
CCS

P.59 

 Selected for the FTSE Blossom Japan

Economic value Improve ROE to 8% or more by FY2030
 Set a basic policy to target

a consolidated dividend payout ratioof 30%

Social and environmental value

 Maintain a stable energy supply
 Contribute to the realization of a carbon-

neutral society through technology like
CCS/CCUS Reduce GHG emissions from JAPEX

operations

Three SDGs
we focus our efforts on

Index

 Selected for the FTSE Blossom Japan

Sector Relative Index

P.30 

 Selected for the S&P/JPX Carbon

E&P Business: operation track record of 66 years

Social and relationship capital

Production andsupply of energy

1.43 million tons (LNG equivalent) Electricity sales volume:
3.0 billion kWh

Efficient Index

 Comprehensive technical capabilities of theGroup that fully augment the entire E&P
field and highly knowledgeable geologicaland reservoir technicians
 Operating results of the Infrastructure/Utility
Business:high-pressure gas pipeline operation of 61
years; LNG terminal operation of 19 years;
tanker truck transport of 39 years; railway
container transport of 22 years; coastal
vessel transport of 11 years
 Expanding mid-career hires to expand new
business development(percentage of mid-career hires: 20%)

P.57 

 Consolidated profit: -¥30.9 billion
 EBITDA: ¥57.3 billion
 Cash flows from operating activities:

P.27 

Three LNG terminals (Hokkaido, Fukushima, Niigata)Gas pipeline spanning a total of over 800 km
Power plant output:
		 Total output from seven locations:
1,390 thousand kW
		 Of which, total renewable energy output
from six locations: 210 thousand kW
* Gross output
Transport by coastal vessels, LNG railway
tank containers, and tanker trucks in addition
to gas pipelines

Outcomes

Financial achievement

JAPEX Management Plan 2022–2030
P.16 

 Very stable energy supply chain:

P.12 

Toward a Carbon-Neutral Society

achieving sustained and enhanced corporate value through business activities that take advantage of its strengths.
Rapid transition to a decarbonized society•S trengthening climate change countermeasures ineach country• Rising demand for low-environmental-impact energy

Financial and Other Information

Realizing JAPEX2050:

Given changes in the economic and social environment, the JAPEX Group aims to contribute to all its stakeholders,

Awareness of the External Environment

Initiatives to Support Value Creation

 Selected for the MSCI Japan

Empowering Women Index

 Obtained B rating in the CDP Climate

Change Questionnaire

Utilizing technologies inbusiness that contributes
to decarbonization

Initiatives to Support Value Creation

ESG performance

P.33 

To create value that last over the medium- to long-term, we areworking to mitigate risks and expand opportunities by promoting
sustainability activities based on our five core CSR themes “SHINE.”

Corporate Vision

P.58 

 LTIF*1: 0.00 (target: 0.18)
 Percentage of female managers: 6.0%
 Percentage of employees taking

P.01 

Contribute to society through a stable supply of energy andaddress social issues towards the Sustainable Development
Goals

childcare leave
Male: 75.6%
Female: 100%
 GHG emission
P.49 
P.58 
reduction
Scope 1+2: 0.62 million ton-CO2*2
Scope 3, Category 11:9.45 million ton-CO2*2
Emission intensity*3: 3.20 ton-CO2/TJ(reduced by 19% compared with FY2019)*1 Lost Time Injury Frequency: Calculated as thenumber of lost time injuries per 1,000,000
work hours.
*2 T he reduction attributable to JACOS is basedon data until the end of the project in August
2021.
*3 E
 mission intensity: Represents intensity
within the scope of GHG emission goals.

JAPEX Integrated Report 2022 11

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Towarda Carbon-Neutral Society

Background of JAPEX 2050 Formulation
Under the Long-term Vision 2030 formulated in 2018, JAPEX has targeted “Growth to
a comprehensive energy company utilizing oil and gas E&P and its supply basis.” We have beenworking to transform into a business structure that enables sustainable growth even when oil
prices are low and that can respond to the changing needs of society.

Recognition of Medium- to Long-term Risks and Policies for Addressing Such Risks
Business fields Medium- to long-term risks recognizedCompanywide
business
portfolio

Fluctuations in crude oiland natural gas prices
Rapid transition toa decarbonized society

Meanwhile, since the formulation of the long-term vision, the global trend toward
decarbonization has been gaining steam in response to the Paris Agreement. In line with thisE&P field

trend, in October 2020, the Japanese government announced its aim to realize carbon neutrality
by 2050. It made us aware of the need to evolve our current initiatives, and thus we updated
our medium- to long-term risk recognition.
As a result, we concluded that, in order to appropriately address identifies risks and achieve

Infrastructure/
Utility field

growth by taking advantage of opportunities, we need to clarify our responsibilities in the
carbon-neutral society in 2050 as well as the business fields to focus on. Accordingly, we

neutral society.

CarbonNeutralfield Shift to a business portfolio that is resilient against
low crude oil prices(by making the renewable energy business profitable;
creating new businesses, such as CCS/CCUS; andexpanding such businesses) Pursue a low-carbon and decarbonized business portfolio(to reduce GHG emissions in line with JAPEX’s targetof achieving net-zero emissions in 2050)

Declining volume of oil
and gas reserves

 Develop remaining production potential in Japan Acquire new interests overseas

Rapid transition toa decarbonized society

 Shift the focus of the E&P field to natural gas
 Introduce CCS/CCUS in participating projects

Decline in domestic
natural gas production

 Procure LNG with competitivenessRapid transition toa decarbonized society Expand the renewable energy business Decarbonize power generation and gas businesses(by introducing carbon-free LNG and carbon-neutral LNG ) Horizontally deploy various supply methods fornatural gas and LNG targeting overseas markets

Resolution of issues related
to CCS/CCUS operations
to achieve the earlycommercialization ofthese businesses in Japan ush ahead with both technological and marketingP
endeavors, including securing CO2 storage capacities,
promoting cost reductions, and taking initiative in rulemakinghave formulated JAPEX2050: Toward a Carbon-Neutral Society and announced it in May 2021.
JAPEX2050 comprises GHG emission reduction targets and focused efforts to realize a carbon-

Risk mitigation policies

JAPEX Integrated Report 2022 12

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

JAPEX2050
 GHG Emission Reduction Targets

Scope 1: Direct greenhouse gas emissions by the reporting company itself, such as fuelcombustion and industrial process
Scope 2: Indirect emissions from the use of electricity, heat, or steam supplied by others
Scope 3: Other indirect emissions besides Scope 2(emissions by others related to the company’s activities that are further subdivided into 15 categories)

Scope 1+2

Scope 3

2030

2050

Contribute to establishing new

Reduce CO2 emission intensity

Achieve net-zeroemissions

technologies and energy supply withof JAPEX operations by 40%

low environmental impact, for achieving
net zero CO2 emissions by 2050

compared to FY2019

Scope 1+2*

1

Scope 3

We will reduce GHG emission intensity*2 of JAPEX operations by 40% in fiscal 2030 compared

JAPEX’s total Scope 1, 2, and 3 GHG emissions amounted to around 10.42 million tons of CO2

to fiscal 2019*3 and achieve net zero GHG emissions from JAPEX’s operating locations by 2050.

in fiscal 2021, and Scope 3 emissions accounted for the vast majority at about 98%. Because

To achieve these targets, we have set the following measures as priority action items.

Scope 3 category 11 (use of sold products) emissions were especially high at 93% of the total,
the reduction of these emissions is an important issue for JAPEX. We aim to reduce Scope 3

Scope 1 emissions reduction measure: Consider injection of CO2 emitted from domestic oil and gas fields
Scope 2 emissions reduction measure: Gradually shift to zero-emission electricity

emissions by promoting the efforts, focused on realizing a carbon-neutral society, which are
explained on the following pages.

To steadily achieve our GHG reduction targets, we set targets for every fiscal year in the CSR
action plans p.43  and manage their progress.
*1 Based on the GHG Protocol’s operational control approach*2 CO2 emissions (ton-CO2) per 1 terajoule (TJ) of energy supplied by JAPEX*3 FY2019 intensity: 3.97 ton-CO2/TJ
JAPEX Integrated Report 2022 13

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

JAPEX2050
Focused Efforts to Realize a Carbon-Neutral Society
1. Turn Carbon Neutral into a profitable business based on CO2 injection
and storage technology• Aim to achieve the early implementation and commercialization of CCS/CCUS asa pioneer in Japan• Strive to collaborate and enter into carbon-neutral business areas, where synergies
with CCS and CCUS can be expected(focusing on BECCS

and natural gas-fired power plants with CCS, entering intobusiness area of carbon-recycling, etc.)

2. Expand participation in renewable energy projects

JAPEX2050 Roadmap
GHG emission
reduction targets• Aim to increase renewable energy projects in which JAPEX participates while utilizing
knowledge and experience in conventional businesses

worldwide, continue to meet the demand for them

• As a comprehensive energy company, aim to achieve a carbon-neutral society

CCS/CCUS

Other areas
contributing
towardnet-zerothrough a complete shift away from oil and natural gas
Stable supplyof oil andnatural gas

Also, for our specific initiatives to be taken by 2030, please refer to the JAPEXManagement Plan 2022–2030, which is explained on the following pages.

Commercialize CCS/CCUS in Japan

Conduct location surveys and implement examinationof CCS/CCUS in deep saline aquifers* in Japan
Consider and verify carbon-recycling projects

through the use of CCS/CCUS and other decarbonization technologies, rather thanFor more details on JAPEX2050, please visit our corporate website.

Achieve net-zero emissions by 2050

Consider to implement CCS/CCUS at JAPEX’s
domestic oil and gas fields

3. Stable supply of oil and natural gas• Recognizing that oil and natural gas will remain as one of the major energy sources

Reduce Scope 1+2 emission intensity by 40%
compared to FY2019

Commercialize carbon-recycling business(on our own and/or with cooperation on supplying raw material)

Increase renewable energy sources and supply

Focus on power plants with CCS(natural gas-fired and BECCS)

Stable electricity supply from the natural gas
power plant

Enhance natural gas and LNG utilization, including carbon-neutral LNG supply
Acquire new overseas interests with focus on natural gas and including CCUS andcontinue development and production aiming to meet demand
2021

2030

2040

2050

* Deep saline acquirers represent a sandstone layer deep underground that includes ancient seawater (saltwater) which is not suitable fordrinking. Its geographical distribution is broader compared to oil and natural gas reservoirs, and CO2 storage capacity is anticipated.

JAPEX Integrated Report 2022 14

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Looking Back on Medium-term Business Plan 2018–2022 and Long-term Vision 2030
In the past four years, we made some meaningful progress, such as business portfolio optimization and improvement of financial soundness.
Meanwhile, faced with dramatic changes in external and our business environments, in March 2022, we formulated the JAPEX Management Plan 2022–2030 as a plan to replace the Medium-term
Business Plan 2018–2022 (“Previous Medium-Term Plan”) and Long-term Vision 2030 before the Previous Medium-Term Plan period ends.

Formulated in May 2018

Medium-term Business Plan 2018–2022

Long-term Vision 2030

Basic Policy

Improve ROE to 5% or more by 2022 (assuming oil price of US$60 per barrel)

Grow to a comprehensive energy company utilizing oil and gas E&P and its supply basis

I/U Business

Acquire new overseas interests, while maintaining or increasing reserves in Japan

Maintain an RRR

E&P Business

Achieve annual natural gas transaction volume in Japan of 1.60 million tons
(LNG equivalent) and electricity sales volume of 2.8 billion kWh

Promote supply of energy with a low environmental impact

New businesses

Build a new business model, and identify new business seeds

Generate environmentally friendly new business

Target items

Targets (by the end of FY2022)

ROE

FY20185% or more

FY2019of >1

FY2020

FY2021

Status of achievement (at the end of FY2021)

3.5%

6.5%

—

—

Unachieved
Unachieved

Domestic natural gas transaction volume

1.60 million tons

1.13 million tons

1.20 million tons

1.48 million tons

1.43 million tons

Quantitative targets

Electricity sales volume

2.8 billion kWh

0 billion kWh

0 billion kWh

3.0 billion kWh

3.0 billion kWh

Achieved

and the status

Interest-bearing debt

Reduced to approx. ¥100.0 to 120.0 billion¥151.7 billion¥140.8 billion¥118.7 billion¥6.1 billion

Achieved

Debt-to-EBITDA ratioLess than 2.0 times

3.6

2.4

3.2

0.1

Achieved(Long-term target) More than 1

4.9

(0.1)

(0.7)

(0.059)Unachievedof progress
and achievementof the Medium-term
Business Plan
by FY2021

RRR (Reserve Replacement Ratio)

Major progress by FY2021
with additional development in and outside Japan, and• Proceeded
acquired new interests in oil and natural gas E&P projects overseas
non-E&P business fields, including the commercial operation• Expanded
of Soma LNG Terminal and Fukushima Natural Gas Power Plant, andlaunched full-fledged development of the renewable energy business• Started feasibility studies for multiple CCS/CCUS projects in and outside Japan• Improved profitability by optimizing business portfolio, mainly two projects in Canada• Enhanced shareholder returns by share buyback
Changes in our balance sheet (decreases in business assets and interest-bearing debt)

Response to changes in external environment
the crude oil price assumption for medium-to-long-term to• Lowered
US$50 per barrel at the end of March 2021 in the face of irreversible•

changes in energy supply and demand structure driven by the progressin global decarbonization
Formulated JAPEX 2050, which sets forth JAPEX’s direction toward
2050, in May 2021

Long-term vision for transition of business structure based on JAPEX 2050

Formulated JAPEX Management Plan 2022–2030

JAPEX Integrated Report 2022 15

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

JAPEX Management Plan 2022–2030
Based on its basic policy of “improving profitability and building a business foundation for 2030 and beyond,” JAPEX Management

Management Goals

Plan 2022–2030 (“New Management Plan”) aims to achieve a reasonable profit level considering capital costs and enhance• Quantitative targets: business profit, ROE, profit composition
FY2021
results

shareholder returns by strengthening efforts in three business fields of E&P, Infrastructure/Utility, and Carbon Neutral.

Achieve a Reasonable Profit Level Considering Capital Costs and Enhance Shareholder Returns

Business profit¥30.0 billion¥50.0 billion¥37.1 billion ¥23.0 billion¥27.0 billion¥3.2 billion ¥12.0 billion¥27.0 billion(Operating profit + Share of profit of entities ¥33.8 billion
accounted for using equity method*1)

Breakdown  E&P field

JAPEX Management Plan 2022–2030

 I/U field CN fieldBasic policy:Improve profitability and build a business foundation for 2030 and beyond
Business Foundation

Other

—

¥1.0 billion¥2.0 billion-¥6.5 billion-¥6.0 billion-¥6.0 billion—%

Approx. 5%

Approx.

9-to-1

6-to-45-to-5

73.28

50.00

50.00

111.20110.00110.00

ROE
Profit composition ratio(E&P-to-non-E&Ps*2)

Assumption of crude oil price*3(JCC

E&P field

Infrastructure/
Utility field

Carbon Neutral field

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

Transform business structure to withstandmarket changes such as oil price volatility

Contribute to smooth transition toa carbon-neutral society in 2050

Continue to invest in acquisition

Expand the profit scale ofof new interests and promoterenewable energy andlow-carbon operations

other businesses

Launch CCS/CCUS hub and cluster*model business utilizing existing oil
and gas fields and others* CCS/CCUS network that connects multiple CO2 emission sources and CO2 storage sites

Medium-term targets Long-term targets
by FY2026
by FY2030: USD/bbl)

Exchange rate assumption (JPY/USD)

8%*1 Share of profit of entities accounted for using equity method includes profits
to be distributed under limited partnership and silent partnership agreements.
*2 Non-E&Ps refer to I/U and CN fields.
*3 N umerical targets of the management goals are based on the assumption of
crude oil price (JCC) of US$50 per barrel.

• Carbon neutral related targets
C
CS/CCUS hub and cluster model business utilizing

existing domestic oil and gas fields and others

Efforts to Strengthen Business Foundation
Enhancement of human capitalmanagement
Secure and develop human resources for DX

Organizational changes
Promote DX based on business issues

		Make a meaningful progress by 2026, aiming to launch
as a model business by fiscal 2030
R
eduction of GHG emission intensity of JAPEX operations

by 40% (compared to fiscal2019)
		Start CO2 injection pilot trial at domestic oil and gas fields
by 2026, aiming to achieve the target in fiscal 2030

Measures to promote DX (Digital Transformation)

JAPEX Integrated Report 2022 16

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

JAPEX Management Plan 2022–2030
Priority Items and Profit Targets of Each Business Field
Based on the belief that oil and natural gas will remain important sources of energy, we will continue to play a part in the stable supply of these energy sources, while promoting low-carbon operations.
At the same time, we aim to further expand business in the Infrastructure/Utility field, including renewable energy, and to launch the CCS/CCUS model business toward achieving JAPEX 2050.
* Items in bold are new initiatives.

Field

Domestic

Overseas

Business profit target: ¥23.0 billion as of FY2026  ¥27.0 billion as of FY2030
E&P field

 Conduct stable production of oil and natural gas in existing oil and gas fields

 Steadily promote existing projects

P ursue additional development at existing oil and gas fields and theirsurrounding areas (including exploration overseas) Acquire new interests

 educe GHG emissions at oil and gas production locations
R

Business profit target: ¥12.0 billion as of FY2026  ¥27.0 billion as of FY2030

Infrastructure/Utility fieldGas
supply Maintain and expand gas supply volumes

Gas power
generation

 Continue stable operations of Fukushima Natural Gas Power Plant

RenewableenergyGas
supply Participate in an LNG supply infrastructure development
project

Renewable  Consider possible participation in renewable energy
energyprojects Make steady progress in on-going development projects ofrenewable energy Participate in additional projects

Business profit target: ¥1.0 billion as of FY2026  ¥2.0 billion as of FY2030
Carbon Neutral field

CO2
storageOther Launch CCS/CCUS hub and cluster model business utilizing
existing oil and gas fields and others Examine CO2 storage capacity in existing oil and gas fields, etc.

CO2
storage Participate in CCS projects in systematically advanced areas Participate in feasibility studies on CCS/CCUS in emerging
countries Consider next generation energy supply infrastructure, etc.

JAPEX Integrated Report 2022 17

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

JAPEX Management Plan 2022–2030
Fund Allocation and Return to Shareholders

Efforts to Strengthen Business Foundation

We anticipate that cash inflows by fiscal 2030 will amount to a total of ¥500.0 billion,
consisting of ¥380.0 billion from cash flows from operating activities and ¥120.0 billion
from cash on hand and bank loans. Out of a total of ¥500.0 billion in cash inflows, we will
allocate ¥450.0 billion to growth investments and ¥50.0 billion to shareholder returns. Of
the growth investments, ¥230.0 billion will be invested in the E&P field, ¥170.0 billion in
the I/U field, and ¥50.0 billion in the CN field. As for return to shareholders, we will pay
dividends totaling ¥50.0 billion during the period covered by the New Management Plan,
with a target consolidated dividend payout ratio of 30%, starting from fiscal 2022.
Allocate cash inflows of ¥500.0
billion to growth investments
and shareholder returns

Cashinflows

Fund
allocation

E&P field¥230.0 billion• Outlook for fund allocation(cumulative total of
9 years up to FY2030)

Breakdown of growthinvestments

Operating CF¥380.0 billion

Growthinvestments

Cash on hand+Bank loans
Shareholder returns¥120.0 billion ¥50.0 billion

Adopt a dividend payout ratio
to enhance shareholder returns• Changes in Basic Policy Pay dividends in line with businessresults for each fiscal year witha target consolidated dividend
payout ratio of 30% starting fromfiscal 2022
 Strive to maintain an annual
dividend of ¥50 per share even in
the event of a temporary downturnin business performance• Secure and assign human resources following business changes

Secure human resources with skills required in new business fields, and reassign to growth areas• Develop human resources for new fields

Encourage each autonomous career development
 Introduction of career consulting, expansion of internal personnel recruitment system, etc.
Introduce reskilling program Education on digital literacy, etc.

• Utilize human resources based on the Diversity, & Inclusion (DE&I) Policy

Japan – Additional development, etc.
................................ ¥30.0 billion
Overseas – Acquisition of new interests, etc.
.............................. ¥200.0 billion

I/U field¥170.0 billion

Domestic gas supply(including existing facilities)... ¥40.0 billion
Overseas LNG supply Infrastructure development................................ ¥40.0 billion
Renewable energy development in and outside Japan................................ ¥90.0 billion

CN field¥50.0 billion

CN business development in and outside Japan................................ ¥50.0 billion¥450.0 billion

Enhancement of human capital management

 Promotion of women, youngers, and seniors

Organizational changes (as of April 1, 2022)• Reorganize business divisions to promote the New Management Plan
Reorganize overseas business project divisions

Reflecting on our failure to make sufficient investments in growth during the period
covered by the Previous Medium-Term Plan, we have reorganized overseas businessproject divisions into the Overseas Business Division I and Overseas Business Division II.
The Overseas Business Division I is in charge of discovering new overseas projects, while
the Overseas Business Division II is in charge of promoting existing overseas projects, etc.
Establish the Carbon Neutral Technology Dept.

Before: Pay stable dividends over long-termwith basis of ¥50 per year

After: Target a consolidated payout ratio of 30%
as a basic policy

Bar graph (Yen)200Line graph (%)
40

To accelerate the commercialization of carbon neutrality related business of eachbusiness division, we have set up the Carbon Neutral Technology Dept. under theTechnical Division.

• Strengthen company-wide support for business deal execution and management
Establish the Deal Execution/PMI Support Dept.

30%

150

100

15.5%
¥40

50

30%

20
10.4%
¥50

—%
¥50

2019

2020

2021

By centralizing corporate divisions’ expertise, we push forward with new deal execution by eachbusiness division. To raise the achievability of profit targets, we provide support throughout theprocess up to investment value realization after the establishment of a new project.

Promotion of DX—%¥50
Business profit:¥30.0 billion
ROE: 5%Business profit:¥50.0 billion
ROE: 8%2026(Outlook)

2030(Outlook)

0
2018

30

10

0
(FY)

• Position DX as a key management issue

We will make company-wide efforts to promote DX in a bid to enhance corporate value by
solving issues that have remained unsolved and are in the process of digitalization, and contributing to building a business foundation, which is aimed for in the New Management Plan.
JAPEX Integrated Report 2022 18

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Message from the Officer in charge of Finance & Accounting Dept.

Investment Strategy for Accelerating
Growth and Policy on Use of CashDirector, Senior Managing Executive Officer
In charge of Finance & Accounting Dept. and
Deal Execution/PMI Support Dept.

YAMASHITA Michiro

Financial Review of Fiscal 2021

Looking back at our operating results for fiscal 2021, net sales increased ¥9.0 billion fromthe previous year to ¥249.1 billion. Operating profit, meanwhile, climbed ¥15.6 billion to

In fiscal 2021, the world economy got back on track as the impact of COVID gradually¥19.8 billion, mainly thanks to higher profits from domestic crude oil and diluted bitumen on

subsided, and prices of crude oil and LNG trended upward. Our operating environment

the back of rising oil prices. However, we reported loss attributable to owners of parent ofremained unstable, with oil prices soaring to around USD110 per barrel at the end of the¥30.9 billion, deterioration of ¥28.2 billion year on year due to posting extraordinary losses

fiscal year against a backdrop of turmoil in the energy market that began in February 2022,

associated with the two projects in Canada, partially offset by gain on sale of investment

triggered by the Ukraine crisis and the imposition of economic sanctions against Russia.

securities and gain on forgiveness of debts as extraordinary income.

In fiscal 2021, we worked to improve our balance sheet on various fronts.
Under the management goal to achieve sustainable growth even when oil price range from

Regarding our consolidated financial position, total assets as of March 31, 2022 amounted
to ¥471.9 billion, down ¥152.8 billion from the end of the previous fiscal year, mainly due to a

USD50–60 per barrel, we have been striving to improve profitability through the optimization

decrease in business assets resulting from the termination of the Canadian projects. Liabilitiesof our business portfolio. As the environment surrounding the E&P business has become evendecreased by ¥121.1 billion to ¥69.1 billion because of the elimination of debt related to themore challenging due to rapid worldwide movement towards decarbonization, we decided

Canadian projects, and net assets fell ¥31.7 billion to ¥402.7 billion as a result of a decrease in

to terminate two projects in Canada after evaluating that there was little prospect of earning

retained earnings and the repurchase of our own shares.

returns commensurate with our cost of capital on an ongoing basis.
In November, from the viewpoint of asset efficiently, we decided to improve capital efficiency

Although our financial soundness has significantly improved with the near elimination ofinterest-bearing liabilities, we recognize that our most urgent task is to rebuild our businessby selling some of our cross-shareholdings and using part of the proceeds to repurchase ourportfolio and restore profitability through further investment for growth, as our non-current

own shares as a means of returning value to shareholders.

assets have decreased significantly.

JAPEX Integrated Report 2022 19

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Message from the Officer in charge of Finance & Accounting Dept.

(Billions of yen, unless otherwise indicated)

Net sales

Fiscal 2020(2021/3)

Fiscal 2021
(2022/3)

Change

240.0

249.1

+9.0

Investment Policy in the JAPEX Management Plan 2022–2030
In the JAPEX Management Plan 2022–2030 (“new management plan”) formulated in March
2022, we set quantitative targets of ¥50.0 billion in business profit, 8% in ROE, and 5:5 in the
E&P vs. non-E&P business profit composition in fiscal 2030. To achieve these targets, we plan toOperating profit

4.1

19.8

+15.6

invest a total of ¥450.0 billion over the nine years from fiscal 2022 to fiscal 2030 in three areas:
E&P, Infrastructure and Utilities (I/U), and Carbon Neutral (CN).

Extraordinary income (losses)(17.3)(62.1)(44.8)The plan is to invest ¥230.0 billion in the E&P field, with ¥30.0 billion to be allocated toadditional development of domestic oil and gas fields and ¥200.0 billion earmarked for theProfit (loss) attributable to owners of parent(2.7)(30.9)(28.2)

Crude oil CIF price (JCC) (USD/bbl)

42.91

73.28

+30.37

Total assets

624.7

471.9

(152.8)

Liabilities

190.2

69.1

(121.1)

Net assets

434.4

402.7

(31.7)

Equity ratio (%)

64.0

78.7

+14.7

Interest-bearing debt*1

118.7

6.1

(112.5)acquisition of new overseas interests. We will pursue profit-earning opportunities in the E&P, as
they offer the prospect of relatively high returns, and will aim to generate stable cash flows at an
early stage, with the money earned to be allocated to new investments. We will be also working
to get non-E&P fields, which are less susceptible to the effects of fluctuations in oil prices andother external factors, contributing to our bottom line.
¥170.0 billion will be allocated to the I/U field. Of this amount, ¥40.0 billion will be going
into domestic gas supply infrastructure, ¥40.0 billion into overseas LNG supply infrastructuredevelopment, and ¥90.0 billion into domestic and overseas renewable energy development. In
the CN field, we plan to ramp up our efforts toward the practical application of CCS/CCUS, andwill be investing ¥50.0 billion in CN business development in Japan and overseas.
In fiscal 2022, the first year of the new management plan, we will move forward with projects
that have already been approved for investment and look to acquire new projects in both the
E&P and non-E&P fields.

*2

EBITDA

37.1

57.3

+20.2

Debt-to-EBITDA ratio (times)

3.2

0.1

(3.1)

In E&P, additional development investment is underway in Japan for the Katakai gas fieldin Niigata Prefecture, and overseas development investment is underway for the Seagull
project in the U.K. North Sea. And in North America, we acquired new interests in January
and May 2022 to expand our tight oil business in the U.S. We plan to invest approximately*1 Interest-bearing debt includes lease obligations, retirement benefit liability, and contingent liabilities.
*2 EBITDA is the total of operating profit, depreciation, interest and dividends received based on investment cash flow statement.

USD500 million in development between 2022 and 2024. Tight oil output peaks about three
years from the start of production, which allows invested capital to be rapidly recouped andreduces balance sheet risk through early depreciation.

JAPEX Integrated Report 2022 20

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Message from the Officer in charge of Finance & Accounting Dept.

In I/U, decisions have been made to invest in four biomass power plants in Abashiri,Ozu, Chofu, and Tahara as part of efforts to pursue renewable energy projects in Japan, andApproach to Shareholder Returns

development work is already underway at each of these sites. Overseas, progress is ongoing

In conjunction with the announcement of the new management plan, JAPEX has introduced a

toward a final investment decision (FID ) concerning an LNG terminal construction project in

new dividend policy with a target consolidated payout ratio of 30% from fiscal 2022.

northern Vietnam.

Until now, our basic policy has been to maintain stable dividends over the long term
while emphasizing the need for ample retained earnings as a buffer against the various risks

As our business domains and geographies expand, the challenges we face in project participation

inherent in the E&P business. As we aim to establish a more stable earning structure by

are also becoming more complex. To enable the various processes required to win deals, including

increasing our resistance to oil price fluctuations through the diversification of our businessproject structure design, project valuation, and risk assessment, to be completed efficiently, and to

portfolio, under the new management plan, we will also review our dividend policy andmake project management more sophisticated, in April 2022 we launched a dedicated organization

strive to enhance shareholder returns through the payment of dividends commensurate with

(Deal Execution/PMI Support Dept.) to bolster support from corporate divisions. This department

performance each fiscal year.

will also aim to enhance the value of investments by providing consistent support with post-dealbusiness and operational integration processes.
Reflecting on the lessons learned from the termination of the two projects in Canada, as

During the nine years of the new management plan, which runs until fiscal 2030, we intend
to return a total of ¥50.0 billion to shareholders, based on a crude oil price of USD50 per barreland dividend payments of 30% of profits for each fiscal year.

we execute the various investments envisioned by the new management plan, we will limit

We are committed to meeting the expectations of our shareholders by continuously increasing

investment amounts to a certain size per project and reduce risk by diversifying the timing

our value as an enterprise through aggressive investment and the expansion of our business, andand regions of investment.

then returning the fruits of our efforts to our shareholders.

While prioritizing the use of cash on hand to finance investments necessary for growth, wewill seek to reduce exposure and improve investment returns by structuring project financing forinfrastructure and renewable energy projects. In addition, to finance the Abashiri Biomass Power
Plants, we took out our first ever green loan, having undergone a third-party evaluation of the
project’s compliance with the Green Loan Principles and other standards. We will continue todiversify our financing instruments by making use of various sustainable finance schemes.

JAPEX Integrated Report 2022 21

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Human Resources Strategy Message from the Officer in charge of Human Resources Dept.
Strengthening Human Capital Management for Business Transformation
Human resources, the source of competitiveness and business creation, are vital to the basic policy of the JAPEX Management Plan
2022–2030, i.e., "strengthening profitability and building a business foundation for 2030 and beyond," and maximum utilization ofdiverse personalities will be the driving force behind the company's sustainable growth.
To achieve our medium-term goals for fiscal 2026 and long-term goals for fiscal 2030, we have declared three pillars forstrengthening human capital management and will be accelerating the growth of individuals and organizations, thereby improving
the efficiency and profitability of our existing E&P business and enhancing the resilience of the Infrastructure and Utilities (I/U)
domain. Furthermore, we will push forward with the development of the Carbon Neutral (CN) business area, the centerpiece of whichis the CCS/CCUS business, which is closely aligned with the core competence we have accumulated in our existing business fields.
Managing Executive Officer
In charge of Internal Control, Administration & Legal Dept., Human
Resource Dept., and Information Technology Dept.

MATSUNAGA Tadashi

Personnel allocation and diversity for business transformation

to personal career development, thereby creating an environment in which human capital can be maximallyutilized.

Regardless of whether the technological innovations required for business transformation are incremental or
disruptive, diversity of human resources is key to driving discontinuous innovation.
We have already increased the ratio of mid-career hires, including managers, in recent years, and will

Increasing Engagement

expand the size and diversity of our workforce ahead of the midpoint of the new management plan in fiscal

To successfully execute the new management plan, it will be crucial to create an environment in which diverse

2026 to secure and deploy the talent we need to execute business under the plan. And through the promotion

human resources feel that their jobs and work are satisfying and meaningful, and can work independently andof diversity, equity, and inclusion (DE&I), we will foster an organizational culture in which the Company andenthusiastically, giving full play to their respective abilities. We are working to create a favorable organizational

individuals are headed in the same direction and can collaborate and coexist with one another.

climate through activities to propagate our corporate vision, DE&I, and Health and Productivity Management,
as well as to make workplace environments more conducive to engagement. For example, we have introduced

For personal growth and autonomous career development
To utilize human capital to change our business structure and create new businesses, it is essential to promotea full flex-time system (i.e. one without core working hours), telecommuting system, career support system,and system for confirming employees' willingness regarding transfers.
In addition, we will continue endeavoring to provide communication opportunities that consider

reskilling and upskilling. It is also vital to actively support individuals in relearning on their own initiative so thatpsychological safety by regularly organizing Company-wide town hall meetings as forums for direct dialogue

they can shape their careers independently with an eye to the future. We will carry out a radical overhaul of our

between officers, including the President and, and employees, as well as small-group opinion exchange

current education structure, which is centered on rank-based training, and introduce a reskilling program andmeetings for more in-depth discussions.

expand skill development programs to boost digital literacy and build knowledge of the I/U and CN fields.
To support autonomous career development, we will revise and update our longstanding career guidelines,

We recognize that we are going to face various challenges as we promote human capital management
going forward, but by creating unique stories that leverage our corporate context, and through the provision

introduce career consulting, and expand our open recruitment system for internal personnel. Furthermore,of growth opportunities from our side and the ever-increasing contributions to our business that individuals

we will promote the centralized management of Company-wide human resource information through a talent

will make through their personal development, we aim to grow and further enhance our corporate value as amanagement system and the internal sharing/disclosure of human resource information that can contributecomprehensive energy company.
JAPEX Integrated Report 2022 22

Value Creation
ThroughBusiness
INDEX
E&P Field........................................................ 24
Infrastructure/Utility Field............................. 27
Carbon Neutral Field..................................... 30

JAPEX Integrated Report 2022 23

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

E&P Field
Strengths

Status of blocks, leases, and projects in which the JAPEX Group participates	Comprehensive technical capabilities of theGroup that fully augment the entire E&P field● R elationships of trust with stakeholders, including

UK
North Sea

 Seagull Project (under development)clients, local communities, and oil-producing countries

RussiaJAPEX’s Direction Toward JAPEX2050

 Sakhalin-1 Project(producing crude oil/under development) Garraf Project(producing crude oil/under development)

Iraq

UnitedStatesJapan Tight Oil Project(producing crude oil/under development)

Stable supply of oil and natural gas
	Interest acquisition and development
	Promotion of natural gas use

Domestic oil and gas fields:
10 locations(producing crude oil and natural
gas/under development) Kangean ProjectIndonesia(producing natural gas)

JAPEX Management Plan 2022–2030
Profit targets and priority items• Business profit target: ¥23.0 billion as of FY2026➡ ¥27.0 billion as of FY2030• Priority itemsJapan Yufutsu Oil and Gas Field

Domestic: Conduct stable production of oil and natural gas
in existing oil and gas fields, Pursue additional
development at existing oil and gas fields
and their surrounding areas, and reduce GHG
emissions at oil and gas production locations
Overseas: Steadily promote existing projects and acquire
new interests
Current state

Sarukawa Oil Field  Ayukawa Oil and Gas Field Yurihara Oil and Gas Field Amarume Oil Field

Iwafune-oki Oil and Gas Field Higashi-Niigata Gas Field  Shiunji Gas Field
Yoshii Gas Field   Katakai Gas Field

Net Production Volume and Net Proved Reserves
Net production volume (FY2021 results)

Net proved reserves (as of March 31, 2022)

Crude oil

22.4 thousand boe/d36.1 thousand boe/dOverseas

54 million boe
105 million boe

Total

58.5 thousand boe/dTotal

159 million boe

Natural gas

Japan

Units
boe: barrels of oil equivalentboe/d: barrels of oil equivalent per day

JAPEX Integrated Report 2022 24

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

E&P Field
JAPEX will continue to contribute to early expansion of profit scale and respond to low-carbonization.
We will also seek to diversify business risks by continuously acquiring assets of a certain size and holding various types of assets.
Risks

Opportunities

 Volatility in sales prices of oil and natural gas
 Volating difﬁculties in acquisition of interests
	Rise in exploration and development costs aswell as carbon tax and other environmental
response costs	Pursuit of remaining production potential in oil andgas fields in Japan Acquisition of new projects in key overseas regions Increase in opportunities to enter markets byliquidizing E&P assets overseas

Drilling work site at Katakai Gas Field in Niigata Prefecture

FY2021 Activity Results
Domestic	Decided an additional development around Katakai
Gas Field in April
Overseas

In Japan, JAPEX decided to develop the remaining production

Net Sales and Operating Profit of the E&P Businesspotential around the Katakai Gas Field in Niigata Prefecture, which

Net Sales (Billions of yen)

is currently in production.

120.0

Overseas, JAPEX ended its participation in two projects in
Canada in the first half of this fiscal year to optimize its business	Completed the sale of our interest in the Shale Gas

portfolio. In addition, we newly acquired part of interests in a tight

Project in Canada in July	Completed the sale of shares in a local subsidiary inoil development project in the Eagle Ford Formation in southern

the Oil Sands Project in Canada in September	Acquired additional interest in a tight oil

as we can expect its early contribution to earnings.

Texas, where we have already participated in some other projects,

development project in the United States in January

100.0Operating profit (Billions of yen)
30.0

97.4

22.8

25.0
20.0

73.4

80.0

15.0

60.0

10.0

40.0

5.0

20.0

0

0

(5.0)

2020

2021

(FY)

Factors for Change
Decrease in most of the crude oilpurchase and sale due to the impactof the application of the AccountingStandard for Revenue Recognition

(2.3)
2021

2020

(FY)

Factors for Change
Improvement in sales profit of diluted
bitumen due to a rise in crude oil
pricesIssues to be Addressed and Policy on Initiatives to be Taken Going Forward Pursuit of Remaining Production Potential in Oil and Gas Fields in Japan Acquisition of New Projects in Key Overseas Regions

With the aim of supplementing our reserves and increasing production

We will steadily promote projects that are currently in production

over the medium to long term. We have an eye toward introducing

volume in Japan, we will consider conducting additional development

or under development. We will also pursue opportunities to

CCS/CCUS to projects we participate in, as well as preferentiallyat existing oil and gas fields and their surrounding areas. In additionacquire and invest in new mining interests. These initiatives

considering the acquisition of new natural gas projects.

to our efforts to maintain domestic production volume through thewill target assets from which we can expect early contribution

additional development of existing oil and gas fields, we will also

to earnings mainly in North America and the North Sea, where

we will continue working to construct an optimal portfolio based

strive to contribute to Carbon-Neutrality in coordination with initiatives

we have already participated in some other projects. We aim toon economic viability and environmental concerns.

such as re-injection of associated CO2 generated from our oil and gas

ensure a stable energy supply with a low environmental burden

In addition, from the perspective of improving equity efficiency,

production and implementation examination of CCS/CCUS.
JAPEX Integrated Report 2022 25

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

E&P Field
JAPEX’s Comprehensive Technical Capabilities across the Entire E&P Business
Since JAPEX’s founding in 1955 as a specialized upstream oil and gas company, we have focused on oil and gas E&P.
To transport and supply the oil and gas JAPEX has produced or procured, we have also built up our own supply network in Japan.JAPEX’s strength lies in the Group’s ability to handle each step of E&P.

 Flow of Oil and Gas E&P Business

Exploration
 Surface geological surveys: In areas targeted for exploration andtheir surrounding regions, we conduct surveys of their geologic structure,
strata, petrophysical properties, and geochemical characteristics.
 Geophysical exploration: We assess the geologic structure througha seismic survey using electromagnetic waves and artificial vibrations
underground.
 Drilling of exploration wells: Based on analyses of the geophysicalexploration and surface survey, we drill test wells at promising sites
to confirm the presence of oil and gas.
 Evaluation: If the test drilling is successful, to confirm the spread of
the oil and gas and the scale of the reserves, we drill exploratory andevaluation wells to conduct more detailed evaluations of the reserves.

Development
 Front End Engineering Design (FEED): Development plans areformulated, and necessary facilities are designed.
 Drilling of production wells: Production wells are drilled inaccordance with production plans.
 Construction of facilities: Facilities are constructed for processing,storing, and transporting oil and natural gas.

Production
 Production: Oil or natural gas is produced from production wells.

 Separation and impurity processing: We process oil or natural gas

as necessary, and transport and sell it.
): We apply this to production wells
where production efficiency has declined with the age since the startof production.

 Enhanced Oil Recovery (EORJAPEX’s Main Advanced E&P Technologies

Geologic Modeling Technology

Reservoir Simulation Technology

Well Stimulation Technology

We create geologic
models based ondata gathered from
exploration and othervarious surveys. We use
such data as geologic
structures, reservoir
rock characteristics, andoil and gas distribution
to create three-dimensional models on computers, estimate
underground situations, and evaluate oil and gas reserves.
In addition, we are now able to create more sophisticatedgeologic models by employing recent geostatistical methods.
In part by drilling development wells, we gain undergrounddata and create more detailed geologic models, which areused to determine sites for drilling new development andproduction wells as well as former wellheads.

The reservoir simulation uses reservoir models that visualize
the presence and movement of oil and gas based on geologic
models to create future predictions through numericalcalculations on computers. By carefully analyzing the safest
and most economical recovery methods for reservoirs,
the technology identifies projects that can be proposed as
efficient and effective development plans.

This technology covers thephases from development
to production in the
production engineering(PE) field, which aims to
improve production fromeach well for efficient oil
and gas recovery.
JAPEX is currently
applying the following PE mainly to the development andproduction of domestic oil and gas fields.
 Artificial lift: Producing crude oil using pumps and othermachinery Well stimulation: Acidizing and fracturing Sand control: Preventing the flow of sand into wells during
extraction by plugging gravel that has been artificially sized
into the wells

Geomechanics
Geomechanics is a discipline to predict and control mechanicaldeformation and failure of underground rock. We collectvarious data during drilling and injection operations to evaluate
the mechanical state of underground rock and its changes
over time based on geomechanics and thereby ensure safeand efficient oil and gas development.

The operation and additional development of domestic oil and gas fields based on our comprehensive technical capabilities cultivated over many years continue to serve as a solid cash flow foundation.
In addition, we aim to further grow the E&P field by expanding our technical capabilities and experience in exploration, development, and production overseas.
* Please visit the following link to see the detailed information on other technologies. ➡ https://www.japex.co.jp/en/technology/
JAPEX Integrated Report 2022 26

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Infrastructure/Utility Field
Strengths

Main Facilities Comprising the Energy Supply Chain• JAPEX’s own domestic natural gas supply chain connecting

Domestic Natural Gas Supply Network•High-pressure gas pipeline
 Total length of around 800 km•LNG terminals

 Soma LNG Terminal* Yufutsu LNG Receiving Terminal
 Niigata Terminal*, Nihonkai LNG Co., Ltd.
 Hokkaido Gas Co., Ltd. Ishikari LNG Base*

Abashiri Biomass 2nd and 3rd Power Plants(To start commercial operation in FY2022)

Hokkaido Gas Co., Ltd. Ishikari LNG Base
Kitahiroshima* Capable of receiving ocean-going vessels

ChitosePower Generation Facility Capacity•Natural gas-fired power plant

Tomakomai(in operation)
Solar power plants
Yufutsu LNG Receiving Terminal

Stable supply of oil and natural gas
 Promotion of natural gas and LNG use
JAPEX Management Plan 2022–2030
Profit targets and priority items•Solar power plants•Biomass power plants

JAPEX’s Direction Toward JAPEX2050

Coastal vessel Fukushima Natural Gas Power Plant
Total output 1,180,000 kW Hokkaido District OfficeTotal output 1,800 kW
 Solar Power Tomakomai Co., Ltd. (JAPEX’s stake: 20%)
Total output 13,000 kW••

gas fields in production and LNG terminals through a highpressure gas pipeline network
An infrastructure and operational framework that strives to reducerisks related to major accidental and disaster-caused damages
Domestic gas fields with underground storage capacity
in case of supply-demand adjustments and emergencies

Coastal vessel

Yamagata Natural Gas Pipeline* TOHOKU NATURAL GAS Co., Inc.

• Business profit target: ¥12.0 billion as of FY2026➡ ¥27.0 billion as of FY2030• Priority items

Domestic: Maintain and expand gas supply volumes,
continue stable operations of Fukushima
Natural Gas Power Plant,
make steady progress in on-goingdevelopment projects of renewable energy,
and participate in additional projects
Overseas: Participate in an LNG supply infrastructuredevelopment project and consider possible
participation in renewable energy projects

Soma-Iwanuma Gas Pipeline

Iwanuma Sendai Abashiri Biomass 2nd and 3rd Power Plants (JAPEX’s stake: 33.8%)
Yamagata
Soma LNG Terminal
Soma
Total output 19,800 kW
LNG received from overseas
Shiraishi Tahara Biomass Power Plant (JAPEX’s stake: 39.9%)
LNG received from overseas
Fukushima
Niigata Terminal, Nihonkai LNG Co., Ltd.
Total output 50,000 kW
Fukushima Natural Gas Power Plant(in operation) Ozu Biomass Power Plant (JAPEX’s stake: 35%)
Koriyama
UonumaTotal output 50,000 kW
Niigata-Sendai Gas Pipeline Shiroishi-Koriyama Gas Pipeline Chofu Biomass Power Plant (JAPEX’s stake: 39.9%)
Total output 74,950 kW* Based on data on each power plant as of September 30, 2022

Current state
Natural gas transaction volume in Japan (left axis)(Millions of tons)

Chofu Biomass Power Plant(under construction)

1.48

1.5

Tahara Biomass Power Plant(under construction)

1.2

Electricity sales volume (right axis)(Billions of kWh)

1.43

5.0

1.20

4.0

3.0

0.9

3.0

3.0

0.6

2.0

0.3

Ozu Biomass Power Plant(under construction)

0

1.0

0.1
2019

2020

2021

(FY)

0

JAPEX Integrated Report 2022 27

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Infrastructure/Utility Field
In order to transform business structure to withstand market changes such as oil price volatility, we will work to diversify our gas supply by switching fuels,
add new renewable energy development projects, and discover LNG supply infrastructure development projects overseas.
Risks

Opportunities

	Decreasing energy demand due to the declining
population in Japan and subsequent decreases
in sales volumes of natural gas and electricity
	Intensifying competition in the Japanese market
due to the liberalization of electricity and gas
businesses

	Expanding sales of natural gas by switching fuels(introducing natural gas with the aim of GHG
emission reduction for industrial clients)
	Expanding the scope of services through contract
businesses that utilize existing infrastructure andsupply of energy with a low environmental impact

Abashiri Biomass 2nd Power Plant (under construction) in Hokkaido

FY2021 Activity Results
Domestic Gas Supply Signed a natural gas-based energy service provider contract
with Boehringer Ingelheim Seiyaku in June Received the first carbon-neutral LNG cargo in October
Renewable Energy Participated in the Chofu Biomass Power Generation
Project in September Participated in the Abashiri Biomass 2nd and 3rd Power
Plants Project in September Established PHOTON Sustainable Solar investment limited
Partnership in September Participated in the Ozu Biomass Power Generation Projectin March Participated in the Tahara Biomass Power Generation
Project in March
Overseas LNG Supply Infrastructure Participated in the examination of an LNG terminal construction
project in northern Vietnam in January
For renewable energy development, we decided to invest ina total of five projects: four biomass power projects and one
solar power project.

Net Sales and Operating Profit of the Infrastructure/Utility Business
Net Sales (Billions of yen)

Operating profit (Billions of yen)

150
120

15.0

119.8

12.5

101.3

12.2

10.0

90

7.5
60

5.0

30
0

3.5

2.5
2020

2021

(FY)

Factors for Change
Decrease in sales volume due tothe application of the AccountingStandard for Revenue Recognitionin the previous fiscal year; increasein sales price in this fiscal year

0

2021

2020

(FY)

Factors for Change
Reactionary decline due to the absence of
one-off profits from a surge in JEPX
transaction prices in the previous fiscal
year; higher cost arising from alternative
cargo procurement in a spot market

Issues to be Addressed and Policy on Initiatives to be Taken Going Forward Expanding Sales of Natural Gas by Switching Fuels

 Expanding the Supply of Energy with a Low Environmental Impact

Leveraging our expertise and track record of operating our own

We will continue working to procure and supply carbon-neutral

Development of Renewable Energy Striving to expand thedomestic natural gas supply chain, we aim to increase the sales

LNG* in line with client needs.

supply of electricity with a low environment impact, we aim tovolume of gas by cultivating demand for natural gas, such as bydiversifying supply methods for LNG and encouraging industrial
clients to switch fuels from coal and fuel oil to natural gas. In
addition, we will realize a competitive energy supply through
LNG procurement combining long-term and spot contracts.

* Carbon-neutral LNG is liquified natural gas that is deemed to generate zero CO2 insteadily promote projects currently in progress and add newuse on a global scale by offsetting GHGs generated in the process, from extraction

projects, especially those for biomass power and offshore wind

to combustion of natural gas, with CO2 credits created through environmental

power generation. As for biomass power generation, we willconservation projects (carbon offset) in emerging and other countries.

work to study feasibility and acquire new projects and continue
considering biomass power that realizes negative emissions
by combining with CCS/CCUS (as called BECCS).
JAPEX Integrated Report 2022 28

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Infrastructure/Utility Field
JAPEX’s Initiatives to Realize a Stable Energy Supply
With its mission to contribute to society through a stable supply of energy, JAPEX is working to assure the redundancy and earthquake-resistance of its facilities and upgrading its emergency-response systems to steadily provide clients with energy even amid crises.
Going forward, we will continue to ensure a stable energy supply based on the Company’s strengths of a diverse gas supply network and a resilient infrastructure and operation system,
which we have built up with the technical capabilities and know-how cultivated through our many years of domestic operations.

Initiatives to Ensure a Secure, Safe, and Stable Energy Supply

24-Hour, 365-Day Monitoring and Emergency Response Ensuring Our Stability amid Demand Fluctuations and Crises

 Emergency Response System

We supply gas into the pipeline through multiple
sources, including oil and gas fields located in the Sea ofJapan; the Niigata Terminal of Nihonkai LNG Co., Ltd.,
which we participate in; and our Soma LNG Terminal
situated on the Pacific coast. By utilizing these sourcesin a well-balanced way, we enable flexible response to
demand volatility and ensure a supply system resilient
to disasters, equipment malfunctions, and other adverse
events.
In addition, at our Shiunji Gas Field (Shibata City,
Niigata Prefecture), we bring in natural gas produced
at other oil and gas fields through the pipeline network
and inject and store it underground. This stored natural
gas contributes to stable gas supply by being available
for utilization during crises and to respond to demand
volatility.

We use a remote monitoring and control system toconduct 24-hour, 365-day monitoring that constantly
ensures the proper conditions and safety of theCompany’s pipeline network, supply-related equipment,
LNG terminals, and other facilities. In emergencies, we
can shut off gas remotely. In addition, we have installed
emergency shutoff valves to shut off gas remotely froma monitoring center when there is an abnormality inmajor valve stations or clients’ receiving facilities. At key
locations along the pipelines, we install vent towers tosafely vent gas within the pipeline as necessary. In theseand other ways, we have prepared our facilities to beable to safely respond to unusual events.

 Pipeline Characteristics
In our pipelines, we use high tensile-strength steel pipesthat are elastic and robustly resilient to internal pressure,external pressure, bends, and shocks. They are designedwith strength that can withstand major earthquakes andhave demonstrated their earthquake resilience during
the Miyagi Prefecture Offshore Earthquake, the Niigata
Prefecture Chuetsu Earthquake, and the Great East
Japan Earthquake. In addition, we apply an anticorrosion
coating on the surface of buried pipelines and mitigate
the risk of natural corrosion by applying electric galvanic
protection using an external electric method, achieving
long-term use of buried pipelines.

the safety at the site, we promptly assess whether there
is any damage to facilities by conducting patrols along thepipeline and work to restore services.
In addition, when construction work is conducted inareas surrounding pipelines, we work to prevent accidents
by visiting the construction sites to avoid injuries caused byinsufficient precautions.

 Examples of Responses to Natural Disasters
Although gas supply from the Soma LNG Terminal
was temporarily suspended to conduct a safety checkfollowing the Fukushima Prefecture Offshore Earthquake
on March 16, 2022, there was no supply disruption toclients by switching to a gas supply from another location.

 Safety Assurance Systems
To constantly assure safety, JAPEX’s patrol personnel pay
careful attention to daily pipeline patrols, safety inspectionsof peripheral facilities, inspections for gas leaks, theinstallation of safety signage and roadside signs, among
other measures. We ensure that immediate precautions aretaken in necessary areas when a disaster occurs, such as
torrential rain, heavy snow, and earthquakes. After assuring

Nagaoka Gas Transmission Monitoring Center

We remain committed to a stable supply of natural gas, which is growing in importance as transition energy,
based on our resilient domestic infrastructure, including pipelines and the Soma LNG Terminal,
as well as the optimal combination of domestic natural gas and overseas LNG.
Moreover, faced with increasing severity of power shortage,
we seek for further growth of our power business by expanding the renewable energy business,while ensuring the stable operation of the Fukushima Natural Gas Power Plant which commenced operation in 2020.

JAPEX Integrated Report 2022 29

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Carbon Neutral Field
Toward a Carbon-Neutral Society

JAPEX will contribute to realizing a carbon-neutral society
based on its knowledge and experience gained from many
years in the oil development business.
 Comprehensive technical capabilities cultivated in
the E&P business Optimal combination of resilient domestic
infrastructure and overseas LNG
 Relationships of trust with local community
JAPEX’s Direction Toward JAPEX2050

 Commercialization of CCS/CCUS
 Zero-emission electricity
 Negative-emission electricity
 Next-generation energy supply
JAPEX Management Plan 2022–2030
Profit targets and priority items• Business profit target: ¥1.0 billion as of FY2026➡ ¥2.0 billion as of FY2030• Priority items

Domestic: Launch CCS/CCUS hub and cluster modelbusiness utilizing existing oil and gas fields
and others
Overseas: Participate in CCS projects in systematicallyadvanced areas and participate in feasibility
studies on CCS/CCUS in emerging countries

CO2 separationand capture

CO2 injection
and storage

JAPEX Integrated Report 2022 30

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Carbon Neutral Field
JAPEX’s Strengths and New Possibilities in CCS/CCUS
In line with JAPEX2050, we will promote initiatives, including feasibility studies on CCS/CCUS as a future business, in and outside Japan in order to contribute to smooth transition to a carbon-neutral society in 2050.
CCS/CCUS technologies are expected to help realize Carbon-

achieving 300,000 tons of CO2 injection in 2019. To practicallyNeutral. In Japan, they have been studied since the 2000s in

apply CCS/CCUS, it is necessary to establish technologies andBasic Energy Plans as an issue of the future. From the 2010s,

expertise to survey geological layers appropriate for CO2 injection,

E&P-related technologies and personnel applicable to CCS/CCUS,

this idea took shape as the government’s CCS pilot test project,drill wells for injection, and stably store CO2 over the long-term.

the Group’s ability to provide comprehensive services fromwhich promotes technological development and verification
toward practical application.
In the government’s pilot test for large-scale CO2 injection

know-how and dispatched key personnel to JCCS.
JAPEX’s strengths in CCS/CCUS commercialization are its

We can use all the technologies and expertise cultivated inselecting appropriate sites to monitoring, and its multiple oil andoil and gas E&P as technologies used in CCS/CCUS, such asgas fields expected to be able to store a significant amount ofassessing underground structures, estimating petrophysical

CO2 in Japan.

under the seabed offshore Tomakomai in Hokkaido, Japan CCS

properties, drilling injection wells, conducting production and fluidCo., Ltd. (JCCS), a project company funded by JAPEX and othermovement simulations, and underground monitoring (including

we have begun studies aimed at commercializing CCUS andprivate-sector companies, was contracted by the government,

seismic survey). JAPEX therefore has provided this technologicalcarbon recycling in Japan and overseas.

Selecting candidate sites for CCS/CCUS and injecting, storing,and monitoring CO2

Underground surveys from land and sea (geophysical exploration)• The Group’s technical capabilities that are essential technological elements for realizing CCS/CCUS, such as underground surveys,•

drilling, and monitoring
Utilizing data related to deep saline aquifers (layers where CO2 is expected to be stored) gained from exploration in Japan to date

CO2

Flow of CCS
and CCUS

Capturing CO2 before it is emitted into
the atmosphere from power plants and factories

CO2 separation and capture

CO2

Necessary elements
Establishing CO2 separation plants

Transporting separated andcaptured CO2• Establishing CO transportation infrastructure2

using experience in the transportation andsupply of natural gas and LNG

Including high-pressure gas pipelines and coastal vessel transportation

Besides participating in JCCS, by leveraging these strengths,

Well drilling from land to seabedWell management/monitoringTransporting separated CO2 to storagesites by pipelines and other methods

Injecting and storing CO2
from wells to undergroundCO2 transportation

CO2 injection and storage

Necessary elements
Establishing CO2 transportation pipelines

Necessary Selecting sites appropriate for CO2 storage
elements Drilling wells for injection/monitoring the status
of injection and storage

CO2 utilization

Collaborating on andentering carbon-neutral business fields• Applying CCS/CCUS to natural gas and biomass power generation• Considering entering blue hydrogen and methanation-related fields

CO2

Focusing on natural gas-fired andbiomass power plants, including
facilities owned by other companies,in addition to our own power business

H2Blue hydrogen
Producing hydrogen bydecomposing natural gas, andthen capturing and storing CO2

MethaneMethanation
Producing methane (CH4) fromhydrogen (H2) and CO2

We have internally developed all the CCS/CCUS technologies, which have drawn attention as a last resort for achieving carbon neutrality and are necessary for operating the storage business.
We also have worked to measure the storage potential of primarily domestic oil and gas fields, and aim to launch the domestic CCS/CCUS business by 2030 based on the trusted relationships with local communities we have nurtured for many years.
JAPEX Integrated Report 2022 31

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Carbon Neutral Field

FY2021 Highlights about CCS/CCUS
Domestic CCS/CCUS

Overseas CCS/CCUS	Started a feasibility study on CO2 utilization around the	Agreed to promote a feasibility study of CO2-EOR in

Niigata area in May 2021

* Joint study with Mitsubishi Gas Chemical Company, Inc.

	Started a joint study of technical issues in next-generationenergy transportation and supply infrastructure in June 2021
* Joint study with JFE Engineering Corporation	Established Tomakomai Sector-Coupling Study Committee

the Sukowati Oil Field in Indonesia in June 2021

* Joint study with Pertamina and LEMIGAS	Agreed to promote a feasibility study of CCS in Malaysia
in January 2022

* Joint study with Petronasin September 2021

* Part of a joint project contracted by NEDO with Deloitte Tohmatsu Consulting LLC

Tomakomai CCS Demonstration Center (Japan CCS Co., Ltd.) in Hokkaido

Initiatives for Developing Next-generation Technology
Methane Hydrate
Methane hydrate is an ice-like substance formed by methane,
which is the main component of natural gas, and water. It exists
only in high-pressure and low-temperature environments, suchas below the seabed in deep waters over 500 meters below thesurface. In Japan, there are two types of methane hydrate beneaththe seabed: “pore-filling type in sand” and “shallow type.”
The Plan for the Development of Marine Energy and Mineral
Resources that the Japanese government revised in February 2019
promotes the development of technologies to enable commercial
production in the future and outlines the target of starting projects
aimed at commercialization led by private-sector companies
between fiscal 2023 and 2027.
To date, two pilot tests of offshore production of pore-fillingtype methane hydrate have been conducted, one at the Atsumi
Peninsula in Aichi Prefecture and another at the Daini Atsumi Knoll
offshore the Shima Peninsula in Mie Prefecture. For the first test,
JAPEX was contracted to perform the offshore work, and for thesecond, the Japan Methane Hydrate Operating Co., Ltd. (JMH)
participated in the test. JMH was founded with funds from privatesector companies, including JAPEX and other E&P companies aswell as engineering companies.
In the first test in 2013, gas production from an offshore
methane hydrate layer was successfully confirmed. In the second
test in 2017, measures taken to address issues that arose during

the first test and the continuous production of gas over several
weeks were confirmed.
Currently, based on the results of these offshore production
tests, the MH21-S R&D Consortium, with the participation ofJapan Oil, Gas and Metals National Corporation (JOGMEC), theNational Institute of Advanced Industrial Science and Technology(AIST), and JMH, is working on preparations for the next offshore
production test and developing production technologies aimed atcommercialization.
Going forward, JAPEX will continue to contribute to thegovernment’s efforts to commercialize methane hydrate byparticipating in offshore production tests through JMH.
Survey Technologies for Deep-sea Mineral Resources
The existence of promising ocean mineral resources within Japan’s
exclusive economic zone (EEZ) has been confirmed. The Japanese
government aims to establish the world’s first methods forsurveying these deep-sea mineral resources with high efficiency
and at low cost and then transferring the technologies to privatesector companies.
Under the Cross-ministerial Strategic Innovation Promotion
Program (SIP)*, the government selected “Next-generation
Technology for Ocean Resources Exploration” as the first fiveyear plan in fiscal 2014 and “Innovative Technology for Explorationof Deep Sea Resources” for the second five-year plan in fiscal

2018. The research and development of these technologies areproceeding apace.
* A cross-organizational program that extends beyond the bounds of individual ministries
and sectors. SIP was established to achieve scientific and technological innovation
based on the “Comprehensive Strategy on Science, Technology and Innovation” andthe “Japan Revitalization Strategy,” which are major government policies. Under Phase
1 in 2014, 11 issues were decided, including Next-generation Technology for Ocean
Resources Exploration. Under Phase 2 in 2018, 12 issues were decided, including
Innovative Technology for Explorations of Deep Sea Resources.

In 2014, JAPEX and three other private-sector companies
established the Research and Development Partnership for Next
Generation Technology of Marine Resources Survey (J-MARES),
a company certified by the Ministry of Education, Culture, Sports,
Science and Technology (MEXT). Under SIP Phase 1, J-MARES
succeeded in developing methods for exploring new hydrothermal
deposits using its proprietary technologies. Due to its solid trackrecord during SIP Phase 1, J-MARES is the only private researchorganization chosen to participate in SIP Phase 2. Under SIP Phase2, J-MARES is promoting the development of exploration andproduction technologies for rare-earth deposits, a deep seafloor
mineral resource, at water depth exceeding 5,000 meters. We willcontinue participating in the development of technologies to builda model for industrialization related to future deep-sea resource
development and the practical application of various technologies
developed under SIP Phase 2.

JAPEX Integrated Report 2022 32

Initiatives to
Support Value
Creation
INDEX
Integrity and Governance....................... 34
Sustainability Management................... 43
Stable and Sustainable Energy Supply... 47
HSE as Our Culture.. ............................... 50
Being a Good Neighbor. . ........................ 52
The Employer of Choice......................... 53

JAPEX Integrated Report 2022 33

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Integrity and Governance Outside Directors’ Roundtable Discussion■E valuation of JAPEX Management Plan 2022–2030 (NewManagement Plan)
Kawasaki: As the new management plan was being formulated, all theoutside directors and outside audit & supervisory board members received
detailed explanations from time to time for a period of almost one year.
These explanations covered the initial studies, the basic approach, andso on. And I feel we were given ample opportunity to ask questions andexpress our opinions. As a result, I think our views as outside officers havebeen reflected in the new management plan, but how about you two?
Yamashita: I feel that the Long-term Vision, Medium-term Business
Plan, and Management Resource Allocation, in particular, were carefully
explained from an early stage, and also that we were given time to discusseach of them. As an outside director, I was able to understand the seriesof processes involved in the development of the new management plan,and I was given plenty of chances to state my opinions.
Kawasaki: Regarding the content of the new management plan, in thearea of CCS/CCUS in the Carbon Neutral (CN) business field, CCS/CCUS,
JAPEX has taken on a new challenge by positioning as key tasks thelaunch of a model project in Japan, early participation in projects overseas,
and involvement in CCS/CCUS feasibility studies in emerging countries
in Southeast Asia. There is some debate as to when the project launchshould take place, but with the Japanese government focused on helping
to achieve carbon neutrality in Asia, I think the idea of leading the world in
CCS, an area in which JAPEX can utilize its strengths, is a good one.
Yamashita: JAPEX has been stepping up efforts towards commercializationof CCS/CCUS, such as establishing CN Business Promotion Committee,
chaired by Executive Vice President Ishii, in April 1, 2022. I felt that this senta powerful message, both internally and externally, that JAPEX is serious
about contributing to the carbon-neutral society. I think it’s going to beimportant to carefully explain to both internal and external parties how CCS
will be developed as a genuine business, and to base such explanations on
Outside Director

ITO Tetsuo

Outside Director

YAMASHITA
Yukarinot be able to grant all their wishes, but we’re willing to try. To further
invigorate the Board of Directors and bring about improvement, I think it’s
important for all the members to be on the same page in terms of how
they feel.
Outside Director

KAWASAKI
Hideichi

specific information, such as timelines.
Kawasaki: I view the creation of the CN Business Promotion Committee
as hugely significant. It will be vital for the Committee to look at the big
picture and identify any missing pieces. Carbon neutrality isn’t going tobecome a successful business right away. Now is the time to plant theseeds, kickstarting a long-term effort that looks ahead to 2030 and 2050.
Ito: JAPEX is also expanding participation in renewable energy business,with the aim of increasing earnings from non-E&P businesses. In fiscal
2021, JAPEX participated in several domestic biomass power generation
projects. Although not limited biomass power generation, the risks of the
project must be carefully assessed and properly managed.
Yamashita: On the other hand, and this relates to the management ofprojects, in fiscal 2021 JAPEX made the major decision to end participation
to the Canadian Shale Gas Project and the Canadian Oil Sands Project,which were JAPEX’s main E&P projects. On ending our participation in
two projects in Canada that JAPEX has been working on for many years, I
think it’s worth praising the careful reflection and discussions by the Boardof Directors. Lessons to be learned for future overseas E&P projects werecovered, and it was an important and constructive task for the future.
Ito: I think this new management plan for the run-up to 2030 is really wellthought out. Though frankly speaking, I feel that JAPEX is lagging whenit comes to DX (digital transformation). Other companies are alreadypoaching digital talent from each other, so JAPEX needs to put together
and resolutely execute a concrete plan as soon as possible to avoid being
left behind.
■ Strengthening Corporate Governance
Kawasaki: Looking back on the administration of the Board of Directors
in fiscal 2021, it functioned well overall, with members provided with
explanations concerning agenda items in advance of meetings, forexample. And on the flip side, I tell the executive directors that if there’s
anything they’d like us to do, to please let us know. Of course, we might

Yamashita: Perhaps it’s because the Executive Committee is so thoroughin its deliberations, but I’m concerned that the Board of Directors could
become little more than a forum where outside directors and outside audit& supervisory board members give their opinions and inside directors
just respond to questions. So meetings should be invigorated to make it aforum where everyone, not only outside directors, is free to say what they
think, such that debate takes place in a more flexible discussions.
Ito: As an outside officer, I would like to hear the opinions of insidedirectors or executive officers other than the executive officer presenting
the proposal. It has been very effective to share materials related to thediscussions that took place at Executive Committee meetings. During the
COVID-19 pandemic, JAPEX took great care to prevent infection, thoughboard meetings continued to be held face-to-face to ensure adequate
communication. In addition, we outside directors share a common
waiting area, so outside directors and outside audit & supervisory board
members have a lot of opportunities to talk to each other, which has beenvery helpful when we are preparing to go into board meetings. In myview, meetings of the Board of Directors were kept simple and to thepoint during fiscal 2021, thanks to efforts to stimulate discussion. Goingforward, it would be good for all outside officers and inside officers tohave opportunities to exchange opinions on issues affecting the respective
departments inside officers are in charge of and on the future of JAPEX asa whole.

JAPEX Integrated Report 2022 34

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Integrity and Governance: Messages from Newly Appointed Outside Directors and Outside Audit & Supervisory Board Members

Outside Director

KITAI KumikoOutside Director

SUGIYAMA
Yoshikuni

I was involved in national government policy design andI have recently been appointed as Outside Audit & Supervisory

implementation, mainly in connection with labor, for more than 30

Board Member. I worked for the government for many years

years. After retiring from government service, I qualified as an
attorney, and have since accumulated experience serving asan outside officer at several companies. I feel inspired to be
associated with JAPEX, whose mission is to contribute to astable supply of energy and the realization of a carbon-neutral
society. From the standpoint of an outsider, I intend to confirm,from a medium- to long-term perspective, whether swift and bolddecisions are being made based on accurate risk analysis amid a
dramatically changing operating environment. I am also committed
to helping to secure, train, and promote diverse talent, manage
risk appropriately, and enhance corporate governance. JAPEX’s
Board of Directors engages in lively discussions, and as a member ofthe Board, I will make every effort to contribute to the sustainable
development of the JAPEX Group.

before becoming a university professor. More recently, I
have been involved in the administration of organizations andcompanies, including in the capacity of an outside officer. I intend
to use this public- and private-sector knowledge and experience,as well as what I learn from JAPEX’s operations, to contribute to
JAPEX and its wide range of stakeholders.
The domestic and international energy situation has always
been complex and uncertain, but recent events have made us
keenly aware once again of the importance of a stable supply ofenergy. JAPEX must maintain a long-term outlook, and continue
to respond to the trust and expectations of society based on thetechnology it possesses and the passion of all its employees. In
this difficult operating environment, I believe it is also necessary
to deepen business administration and financial risk management.
I will make a sincere effort to ensure that JAPEX can fulfill its
social mission.

Reading JAPEX’s history gives one an understanding of why
JAPEX came into existence. General Headquarters, the Supreme
Commander for the Allied Powers (GHQ) saw that securing oil
and other energy sources was essential for Japan’s postwar
reconstruction. Responding to this issue, the government madethe development of oil and other resources national policy, and
JAPEX was born.
The war in Ukraine has caused oil and natural gas prices tosoar, and Europe is seeking to break its dependence on Russia
for energy. It has become clear that securing energy sources andstable supply is vital for security. It is no exaggeration to say thatJAPEX’s role has become increasingly important.
I served as a reporter for the Yomiuri Shimbun newspaper,
participated in the management of a newspaper company, andcurrently chair Nippon Television Network. I am determined tomake the most of my experience to contribute to the further
development of JAPEX.

Outside Audit &Supervisory Board Member

KAWAKITA
ChikaraOutside Audit &Supervisory Board Member

MOTOYAMA
Hiroshi

The global supply chains established since the end of the Cold
War are becoming unsustainable due to COVID-19 related supply
constraints and geopolitical fragmentation triggered by Russia’s
invasion of Ukraine, and stable procurement of energy resources
is of particularly great importance for Japan. But at the sametime, accelerating the trend toward decarbonization is essential,
and I recognize that the business environment surrounding JAPEX
is extremely challenging.
Having been appointed as Outside Audit & Supervisory
Board Member of JAPEX at this juncture, I will utilize my experienceand knowledge of governance, diversity, IT, and digitalization, which
I have acquired through my involvement in the managementof different companies, not only in the banking sector but also
in the fields of securities and leasing, to properly oversee theimplementation of the JAPEX Management Plan 2022–2030,
which begins this fiscal year, and contribute to enhancing thevalue of JAPEX’s business.
JAPEX Integrated Report 2022 35

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Integrity and Governance: Corporate Governance
Basic Concept
JAPEX recognizes contributing to society through a stable supply of energy as its mission and helping to realize the sustainable development goals by addressing social issues as its Corporate Vision. To achieve its Corporate Vision and maximize its
corporate value from both the medium- and long-term perspective, it is necessary to ensure efficient and transparent corporate
management and build the building of relationships of mutual trust with stakeholders, including shareholders, by fulfilling its
accountability. Therefore, sound corporate governance, which is foundational to JAPEX, is one of its most important challenges.

Corporate Governancehttps://www.japex.co.jp/en/sustainability/governance/cg/
Corporate Governance Reporthttps://www.japex.co.jp/en/sustainability/uploads/pdf/JAPEX_CGreport_e.pdf

Initiatives to Strengthen Corporate Governance

2015

2016

2017

2018

Increased thenumber of
Outside Directors(1→2)

Increased thenumber of
Outside Directors(2→3)

Began evaluating
the effectivenessof the Board of
Directors

Reformed theexecutive officer
system2019• Established the Nomination andCompensation Committee•A mended the Code of Conduct toestablish the Code of Ethics and Conduct•C hanged the title and composition of
the Executive Committee2020• Increased the number of Outside Directors (3→4)• Raised the ratio of Outside Directors to morethan one-third• Shortened the term of office of Directors fromtwo years to one year
• Introduced a performance-linked share-based
compensation plan

2021

2022

Established the Sustainability
Committee and the Risk
Management Committee

Increased the number of Outside
Directors (4→5)•L inked officers’ compensation
to responses to climate change

Governance Structure■ Overview of JAPEX’s Governance Structure• Company with an audit & supervisory board• Introduced an Executive Officer System to clarify the businessexecution system• The ratio of Outside Directors is more than one-third, the ratio of
Outside Audit & Supervisory Board Members is more than half
• Held the Outside Officer Liaison Meeting as a place to provide
explanations to, provide information to, and exchange information
with outside officers in advance of the Board of Directors’ proposals• All Outside Directors and Audit & Supervisory Board Members who
fulfill independent officer qualifications are designated as independent
officers
1 Board of Directors (meetings held in FY2021: 16 times)
The Board of Directors discusses and makes decisions concerning importantbusiness execution as well as the exclusive prerogatives of the Board of
Directors. It is regularly held once a month.
• Chair: Representative Director and President, FUJITA Masahiro• Composition: 11 Directors (including five Outside Directors)
2 Executive Committee (meetings held in FY2021: 28 times)
From the standpoint of accelerating the speed of decision-making, we holdthe Executive Committee is composed of Directors and other officers of
JAPEX to make decisions on the matters not involved by the decision-making
standard of the Board of Directors and to make a discussion to assist thedecision-making in the Board of Directors. The Executive Committee is held
twice a month in principle, with extraordinary meetings held as needed.
• Chair: Representative Director and President, FUJITA Masahiro• Composition: Six Directors and six Executive Officers
3 Nomination and Compensation Committee (meetings held in FY2021:

3 times)
The Nomination and Compensation Committee discusses the procedures tomake decisions concerning the nomination and compensation of Directors.
It is organized under the Board of Directors, in order to further enhance thesupervisory function of the Board of Directors.
• Chair: Representative Director and President, FUJITA Masahiro• Composition: Five Directors (including three Outside Directors)

4 Audit & Supervisory Board (meetings held in FY2021: 10 times)
Four Audit & Supervisory Board Members, two of which are Outside Audit& Supervisory Board Members, attend the Board of Directors and Outside
Officer Liaison meetings. Full-time Audit & Supervisory Board Members
attend the Executive Committee and other important management meetingsto perform the supervisory function over Directors and Executive Officers
responsible for business execution.
• Chair: Full-time Audit & Supervisory Board Member, NAKAMURA Mitsuyoshi• Composition: Two full-time Audit & Supervisory Board Members and two
Outside Audit & Supervisory Board Members
5 Sustainability Committee (meetings held in FY2021: 16 times)

The Sustainability Committee deliberates the Long-term Vision, the Mediumterm Business Plan, and ESG management. The committee was formed
by integrating and strengthening the existing structure of the former CSR
Committee.
• Chair: Representative Director and President, FUJITA Masahiro
6 Risk Management Committee (meetings held in FY2021: 4 times)
The Risk Management Committee evaluates and manages various
management risks from a cross-sectional perspective; monitors the
progress of individual projects; formulates measures against challenges; anddeliberates issues concerning internal control. The committee was formed byreorganizing and strengthening the former Internal Control Committee.
• Chair: Representative Director and President, FUJITA Masahiro

Corporate Governance Structure (As of August 5, 2022)
General Meeting of Shareholders
Appointment/Dismissal

Appointment/Dismissal

Management/Supervision

Audit

3 N
 omination and

1 D irectors/Board

4 Audit & Supervisory

Inside Directors: 2

Internal Directors: 6

Inside members: 2

Compensation
Committee

of Directors

Board Members/Audit &Supervisory Board

Accounting Auditor
Audit
Outside Directors: 3

Supervision

Outside Directors: 5

Selection/Dismissal

Cooperation
Outside members: 2

Audit

Business Execution

7 HSSE Committee (meetings held in FY2021: 9 times)
Deliberation of issues related to HSSE.
• Chair: Managing Executive Officer, NAKAMURA Tsuneta

5 Sustainability Committee

8 Information Security Committee (meetings held in FY2021: 1 time)
Deliberation of issues related to Information Security.
• Chair: Managing Executive Officer, MATSUNAGA Tadashi

7 HSSE Committee

9 Investment Evaluation Committee (meetings held in FY2021: 14 times)
Verification of risks and appropriateness of investments in important projects.
• Chair: Director and Senior Managing Executive Officer, YAMASHITA Michiro

Appointment/Dismissal

6 Risk Management Committee

8 Information Security Committee
9 Investment Evaluation Committee

2 Executive Committee
Report/Pre-consultation

Cooperation
Representative Director and President (Chief Executive Officer)

Auditing Dept.
Internal audit

Internal control evaluation

Corporate divisions, business divisions, and Group companies

JAPEX Integrated Report 2022 36

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Integrity and Governance: Corporate Governance■ Evaluation of the Effectiveness of the Board of Directors
We evaluate the effectiveness of the Board of Directors once every■ Compensation for Directors and other Officers
JAPEX has introduced a performance-linked share-based compensation

long-term stable dividends*) and a monetary amount equivalent to theyear, and the results of the evaluation are confirmed at the Board

plan for Directors, excluding Outside Directors, and Executive Officers

of Directors meeting. The evaluation method and overview of theevaluation conducted in fiscal 2021 are as follows.

who do not concurrently serve as Directors.

upon retirement.
2. Compensation for Audit & Supervisory Board Members

1. Evaluation Method
A survey created by the Board of Directors secretariat⃝ Scope of evaluation: All Directors and all Audit & Supervisory Board
Members⃝ Period of evaluation: Between April 2021 and March 2022 (one year)⃝ Timing of evaluation: In April 2022

⃝ Evaluation items
1 Issues related to the operation of the Board of Directors
2 Issues related to the operation of the Outside Officer Liaison Meeting

2. Overview of the Evaluation Results
The effectiveness of the Board of Directors was evaluated as being
ensured overall. Of issues identified in the effectiveness evaluation
conducted in fiscal 2020, the following issues were evaluated positively
in general: 1 issues related to the operation of the Board of Directors:
holding discussions related to the Long-term Vision, the Mediumterm Business Plan, and other topics; looking back on projects; andcontinually considering the status of diversity; and 2 issues related
to the operation of the Outside Officer Liaison Meeting: effectively
operating liaison meetings to ensure lively discussions at Board
meetings. On the other hand, for 1 issues related to the operationof the Board of Directors, it is considered necessary to make ongoing
efforts to improve information sharing related to discussions of the
Executive Committee and discussions between divisions on agenda
items, including organizing the scope and content of information to
be shared. In addition, issues related to a succession plan and humanresource development have not yet been discussed in detail and areconsidered to be long-term issues.
3. Initiatives Going Forward
Based on the results of this evaluation, we will respond to the issues
that were identified. Going forward, we will continue working to further
enhance the functionality of the Board of Directors by periodically
identifying issues through surveys of attendees at Board of Directors
meetings.

1. Compensation for Directors
Basic Policy⃝ Regarding the compensation of Directors, the compensation structure
can function as an incentive to sustainably enhance corporate value.
When deciding the compensation for individual Directors, our basic
policy is to set an appropriate level in consideration of the roles alignedwith their position. Compensation for Directors (excluding Outside
Directors) comprises base compensation and performance-linked
compensation (bonuses and share-based compensation). Meanwhile,
compensation for Outside Directors is only base compensation,
considering their duty of supervising management.
Policy for base compensation (monetary compensation)⃝ Base compensation of Directors is fixed monthly monetarycompensation and is decided in comprehensive consideration of theirposition, balance with market standard and employees’ salaries, numberof years of service, and more.
Policy for performance-linked, or non-monetary compensation⃝ Of performance-linked compensation, bonuses are paid at certain times
every year based on consolidated net income as an indicator measuring
their contribution to results for the corresponding fiscal year. Specifics are
decided in comprehensive consideration of their position, dividends, thelevel of employee bonuses, their contribution of directors to corporate
management in each fiscal year, past results, payment record, and more.
The above-mentioned contribution is measured based on theachievement of previously set annual goals and business plans (including
GHG reduction target), human resource management, leadership, andexecution ability, in addition to contribution to business performance.
⃝ Of performance-linked compensation, share-based compensation isbased on the Rules on Provision of Shares to Officers approved by the
Board of Directors within the limit approved at the General Meetingof Shareholders. JAPEX shares equivalent to the number of points
provided in line with their positions and performance (using annual
dividend amounts as a general rule as an indicator of performance
evaluation from the perspective of maintaining our basic policy onmarket price of said shares are provided as a general rule to Directors

Compensation for Audit & Supervisory Board Members is determined
after consulting with Audit & Supervisory Board Members, and within
the limit approved at a General Meeting of Shareholders.
3. Targets and Actual Figures of Indicators Used for
Performance-linked Compensation
For performance indicators used for calculating performance-linked
compensation, consolidated profit is used for bonuses to measurecontribution to business performance for the corresponding fiscal year,
and annual dividend amount is used for share-based compensation as
it reflects the evaluation of performance under the Company’s basic
policy of long-term stable dividend payment*. The specific target for
consolidated profit has not been set, as our business performance isoften affected by external factors such as fluctuations of crude oil andnatural gas prices as well as foreign exchange rates, and therefore it isdifficult to set an accurate figure that works as an incentive.
The actual figure of this indicator achieved for fiscal 2021 wasconsolidated loss of ¥30,988 million. The target for annual dividend
amount was ¥50 per share, and the actual amount paid for fiscal 2021
was ¥50 per share.
* We are currently considering updating the policy based on the new dividend policy.

Amount of Compensation for Directors and Audit & Supervisory Board Members (FY2021)

Position

Total amount of each typeof compensation
Number of(Millions of yen)
recipients(Persons)
Base(Millions of yen)
Bonus Share-based
compensationcompensation

Total amountof consolidated
compensation

Directors

335

303

18

13

8

Audit & Supervisory Board
Members (excluding Outside Audit& Supervisory Board Members)

41

41

—

—

3

Outside Officers

66

66

—

—

6

(excluding Outside Directors)

Note: The above number of recipients includes one Director and one Audit & Supervisory
Board Member who retired upon the conclusion of the 51st Ordinary General Meetingof Shareholders held on June 25, 2021.

JAPEX Integrated Report 2022 37

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Integrity and Governance: Corporate GovernanceDirectors, Audit & Supervisory Board Members, and Executive Officers (As of June 29, 2022)■D irectors (*1 The Executive Officer System was reformed in June 2018; *2 Directors ITO Tetsuo, YAMASHITA Yukari, KAWASAKI Hideichi, KITAI Kumiko, and SUGIYAMA Yoshikuni are Outside Directors as defined under Article 2, item 15 of the Companies Act;the dates the Board members were appointed are shown in parentheses next to their years in office.)

Representative Director and Chairman

Representative Director and President Chief Executive Officer

Representative Director Executive Vice President

WATANABE Osamu

FUJITA Masahiro

ISHII Yoshitaka

1964 Joined the Ministry of International Trade and Industry, later
became Vice Minister of International Trade and Industry andserved as Chairman at Japan External Trade Organization(JETRO)2007 Joined JAPEX, served as Executive Vice President andPresident and CEO
2016 Assumed his current position in June
Years in office: 15 years (June 2007)

1977 Joined the Ministry of International Trade and Industry, later
became the Head of the Trade and Economic Cooperation
Bureau at the Ministry of Economy, Trade and Industry andserved as Representative Director, Executive Vice President at
Sumitomo Corporation
2019 Joined JAPEX, served as Representative Director and Executive
Vice President
2019 Assumed his current position in OctoberYears in office: 3 years (June 2019)1981 J oined JAPEX, served as General Manager of Technical Dept.,
Nagaoka District Office, General Manager of Nagaoka District
Office, In charge of the Gas Pipeline Transportation Dept.,
President of Inter-regional Gas Supply Division, President ofSoma Project Division, President of Soma Project & PowerBusiness Division
2021 Assumed his current position in June
Years in office: 4 years (June 2018)

Director
Senior Managing Executive Officer

Director
Managing Executive Officer

Director
Managing Executive Officer

YAMASHITA Michiro

HIRATA Toshiyuki

NAKAJIMA Toshiaki

Finance & Accounting Dept., Deal Execution/PMI Support Dept.

President of Overseas Business Division I

In charge of Corporate Communication Office, and Corporate Strategy Dept.

1982 Joined JAPEX, served as General Manager of Corporate
Planning Dept., Vice President of Environment and Innovative
Technology Projects Division, and Executive in charge ofFinance & Accounting Dept.
2018 B ecame Director and Managing Executive Officer in June
2022 Assumed his current position in June
Years in office: 4 years (June 2018)1981 Joined JAPEX, served as President of Canada Oil Sands
Limited, Executive in charge of the Canada Oil Sands Project,and President of Middle East, Asia & Europe Project Division2017 Became Managing Executive Officer*1 in June2018 Assumed his current position in June
Years in office: 5 years (June 2017)

1986 J oined JAPEX, served as General Manager of Corporate
Strategy Dept., In charge of the Corporate Strategy Dept.
2022 Assumed his current position in June
Years in office: — years (June 2022)

Outside Director

Outside Director

Outside Director

ITO Tetsuo*2

YAMASHITA Yukari*2

KAWASAKI Hideichi*2

1975 Appointed as a prosecutor, served as Head of Special
Investigation Force, Tokyo District Public Prosecutors Office,and Deputy Prosecutor-General of Supreme Public Prosecutors
Office2016 Assumed his current position at JAPEX in June
Concurrently serves as a Registered Attorney (Daiichi Tokyo Bar
Association), Of Counsel at Nishimura & Asahi, and Outside
Auditor at Asahi Kasei Corporation
Years in office: 6 years (June 2016)

1985 J oined the Institute of Energy Economics, Japan, reached theposition of Director and Head of the Climate Change and Energy
Efficiency Unit, and became Board Member at the Institute andDirector in charge of the Energy Data and Modelling Center2019 Assumed her current position at JAPEX in June
Concurrently serves as Managing Director in charge of theEnergy Data and Modelling Center at the Institute of Energy
Economics, Japan and Vice President of the International
Association for Energy Economics, Inc.
Years in office: 3 years (June 2019)1970 J oined Oki Electric Industry Co., Ltd., served as President,
Representative Director and Chairman of the Board,
Representative Director
2020 Assumed his current position at JAPEX in June
Years in office: 2 years (June 2020)

Outside Director

Outside Director

KITAI Kumiko*2

SUGIYAMA Yoshikuni*2

1976 J oined Ministry of Labor, served as Deputy Governor of Shizuoka
Prefecture; Director General of Equal Employment, Children andFamilies Bureau, Ministry of Health, Labour and Welfare; Director
General of Secretariat, Central Labour Relations Commission;
Executive Director of Japan Industrial Safety and Health Association
2022 Assumed her current position at JAPEX in June
Concurrently serves as a Registered Attorney (Daini Tokyo Bar
Association), Attorney at Kachidoki Law Office, Corporate
Auditor (External auditor) at TAKARA HOLDINGS INC., andIndependent Auditor at OSAKI ELECTRIC CO., LTD.
Years in office: — years (June 2022)

1978 J oined The Yomiuri Shimbun, served as Senior Managing
Director at The Yomiuri Shimbun Tokyo Head Office;Representative Director, President at The Yomiuri Shimbun
Seibu Head Office; Representative Director, President at The
Yomiuri Shimbun Osaka Head Office2022 Assumed his current position at JAPEX in June
Concurrently serves as Director of The Yomiuri Shimbun
Holdings, Representative Director, Chairman of Nippon
Television Holdings, Inc., and Representative Director,
Chairman of Nippon Television Network Corporation
Years in office: — years (June 2022)

Advisor to President, President of Power Business Division, responsible for Carbon Neutral Related Business

JAPEX Integrated Report 2022 38

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Integrity and Governance: Corporate Governance■ Audit & Supervisory Board Members (* Audit & Supervisory Board Members KAWAKITA Chikara and MOTOYAMA Hiroshi are Outside Audit & Supervisory Board Members as defined under Article 2, item 16 of the Companies Act;the dates the Audit & Supervisory Board Members were appointed are shown in parentheses next to their years in office.)

Full-time Audit & Supervisory Board Member

Full-time Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

NAKAMURA Mitsuyoshi

MOTOYAMA Yoshihiko

KAWAKITA Chikara*

1982 Joined JAPEX, served as General Manager of Iraq Project
Dept., Middle East, Africa & Europe Project Division; Advisor to
President of Middle East, Africa & Europe Project Division; Vice
President of Middle East, Africa & Europe Project Division;
General Manager of HSE Dept.; Advisor to President of Middle
East, Africa & Europe Project Division and General Manager ofDubai Representative Office, Middle East, Africa & Europe
Project Division; and Project Division Assistant to the Executive
in charge of HSE Dept.
2021 Assumed his current position in June
Years in office: 1 year (June 2021)

1983 Joined JAPEX, served as General Manager of Procurement
Dept.; Executive Officer; Full-time Corporate Auditor at JAPEXOffshore, Ltd.
2022 Assumed his current position in June
Years in office: — years (June 2022)

1977 Joined The Ministry of Finance, served as Commissioner of
National Tax Agency; Professor at Graduate School of Law,
Hitotsubashi University; Outside Director at ITOCHU
Corporation; Deputy Chairperson of General Insurance Rating
Organization of Japan; Outside Audit & Supervisory Board
Member at KONAMI HOLDINGS CORPORATION; and serves
as Chairman at the Salt Science Research Foundation and
Chairman at Nomura Institute of Estate Planning2022 Assumed his current position at JAPEX in June
Years in office: — years (June 2022)

Outside Audit & Supervisory Board Member■ Executive officers who do not concurrently serve as Directors and Fellows (Fellows support the management with high degree of expertise in specialized fields)

MOTOYAMA Hiroshi*
1977 Joined The Industrial Bank of Japan, Limited (later Mizuho
Bank, Ltd.), served as Managing Director of Mizuho Financial
Group, Inc.; Deputy President, Representative Director ofMizuho Corporate Bank; President & CEO, Representative
Director of Mizuho Securities Co., Ltd.; President & CEO of IBJ
Leasing Company, Ltd. (later Mizuho Leasing Company,
Limited.); and serves as Advisor to Mizuho Leasing Company,
Limited2022 Assumed his current position at JAPEX in June
Years in office: — years (June 2022)

FY2021 Attendance Record for Board of Directors, Audit &Supervisory Board, and Nomination and Compensation Committee
Name

Directors WATANABE Osamu
FUJITA Masahiro

Audit &
Nomination and
Board ofDirectors Supervisory Board Compensation Committee

16/16

—

3/3

16/16

—

3/3

OZEKI Kazuhiko*

16/16

—

ISHII Yoshitaka

16/16

—

ITO Hajime*

16/16

—

YAMASHITA Michiro

16/16

—

HIRATA Toshiyuki

15/16

—

KOJIMA Akira(Outside)*

15/16

—

3/3

ITO Tetsuo(Outside)

15/16

—

3/3

YAMASHITA Yukari(Outside)

16/16

—

KAWASAKI Hideichi(Outside)

16/16

—

SHIMOMURA Koichi*
Audit &
Supervisory NAKAMURA Mitsuyoshi
Board
WATANABE Hiroyasu(Outside)*
Members
NAKAJIMA Norio(Outside)*

16/16

10/10

13/13

8/8

7/16

5/10

16/16

10/10

2/2

*Retired in June 2022
• Number of meetings attended/number of meetings held•	The number of meetings held during the period: Board of Directors meetings:
16 times and Audit & Supervisory Board meetings: 10 times
	However, for NAKAMURA Mitsuyoshi, Board of Directors meetings: 13 times
and Audit & Supervisory Board meetings: 8 times
Nomination and Compensation Committee meetings: 3 times
However, for YAMASHITA Yukari, 2 times

Senior Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Fellow

SUGA Tsuyoshi

KAKU Senichiro

MATSUNAGA Tadashi

NAKAMURA Tsuneta

MIYADAI Takamasa

WASEDA Amane

Managing Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Executive Officer

Fellow

ABE Satoshi

TEZUKA Kazuhiko

TAKAHATA Shinichi

IKENO Tomonori

KASA Hirofumi

ANRAKU Toshiyuki

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

YAMADA Tomomi

NAKANO Masanori

NAGAHAMA Yasushi

OHAMA Tadashi

YASUI Akira

Reasons for Appointment of Outside Directors andOutside Audit & Supervisory Board Members
Name
Directors ITO Tetsuo

Reasons for Appointment
To use his extensive knowledge andexperience as a legal specialist in the
Company’s management

YAMASHITA
Yukari

To use her deep insight in energy andenvironmental policies she acquired
through survey and research activities in
the Company’s management

KAWASAKI
HideichiTo use his abundant experience anddeep insight in corporate management ingeneral in the Company’s management

To use her deep insight that comes fromadministrative experience as well as
KITAI Kumiko her
extensive knowledge on labor and otherlaws in the Company’s management
SUGIYAMA
Yoshikuni
Audit &
Supervisory KAWAKITA
Board
ChikaraMembers
MOTOYAMA
HiroshiTo use his deep insight and abundantcorporate management experience hehas acquired through his career at anewspaper company and others in the
Company’s management
To use his deep insight he has acquired
through his experience in policy
execution at the Ministry of Finance andas a professor at a graduate school in the
Company’s management
To use his considerable knowledge on
finance, accounting, tax affairs, risk
management and other areas in the
Company’s management

Skills Matrix
No.

Name

1

WATANABE
Osamu
FUJITA
Masahiro

2
3
4
5
6

Title

Representative
Director and Chairman
Representative
Director and President
ISHII Yoshitaka Representative
Director
YAMASHITA Director
MichiroHIRATA
Director
Toshiyuki
NAKAJIMA
Director
Toshiaki

7

ITO Tetsuo

Outside Director

8

YAMASHITA
YukariKAWASAKI
HideichiOutside Director
Outside Director

10 KITAI KumikoOutside Director

9

11
12
13
14
15

SUGIYAMA
Yoshikuni
NAKAMURA
Mitsuyoshi
MOTOYAMA
Yoshihiko
KAWAKITA
ChikaraMOTOYAMA
Hiroshi

Outside Director
Full-time Audit &Supervisory Board Member
Full-time Audit &Supervisory Board Member
Outside Audit &Supervisory Board Member
Outside Audit &Supervisory Board Member

Knowledge
Finance/
Legal affairs/
Corporate
ESG/
Global Technologies/
on the energy business
Risk
management Accounting/DX
industryTax affairs Management Sustainability
○
○

○

○
○

○

○

○

○

○

○

○

○

○

○
○

○

○
○

○

○

○

○

○

○

○

○
○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

○

Note: T he table above indicates the major skills possessed by each individual and does not represent all the knowledge, experience, andabilities possessed by them.
"Corporate management" includes management experience at organizations or associations other than companies.

JAPEX Integrated Report 2022 39

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Integrity and Governance: Risk Management
Basic Concept
Our business environment is becoming more uncertain as the social environment changes rapidly. Nevertheless, it isinevitable to take risks properly in order to achieve the goals of our management plan and increase our corporate value.
JAPEX has developed and maintains a company-wide integrated risk management process and a process for evaluating
and managing business risks in the course of investment decisions associated with various projects, as well as theexecution and operation stages of these projects. Other countermeasures against diverse risks include developing
Business Continuity Plans (BCPs) and establishing and maintaining an information security management system.

Risk Management System

Integrated Risk Management

In April 2021, JAPEX established the Risk Management Committee tomanage major company-wide risks. The Risk Management Committee
meets once every three months in principle with the President as the
Chair and the Officer in charge of Finance & Accounting Dept. as the Vice
Chair. The primary items to be discussed by the Committee are as listed
below.

JAPEX prepares a risk matrix by identifying and evaluatingcompany-wide risks. Each division identities risks in light ofsuch matters as the characteristics and geographical locationsof its business operations as well as relevant regulatory
conditions, then quantitatively assesses each risk fromthe perspectives of probability of its materialization and its
estimated magnitude. The Risk Management Committee
is tasked with annually deliberating and approving the risk
matrix which is, in turn, reported to the Board of Directors anddescribed in detail in the Annual Securities Report and on thecorporate website.
To date, we have identified the following six major risks.
Recognizing the possibility of the occurrence of these risks,
we strive to avoid their occurrence and to take appropriate
measures in the event of their occurrence.

⃝ Identification and evaluation of company-wide risks⃝ Management of progress in key projects currently in the execution
and operation stage and the determination of response to issues⃝ Verification of important matters related to internal control andthat of compliance violation incidents
In fiscal 2021, the Committee held four meetings as scheduled, where
it received and made reports and deliberated on the above issues. In
addition to the above primary items, issues related to company-widerisks, such as the progress toward GHG emission reduction targets andthe status of responses to the global LNG price hikes, were reported anddeliberated as needed at the Committee meetings.
The Sustainability Committee is charged with managing JAPEX’s
Long-term Vision, Medium-term Business Plan, and its response toenvironmental, social, and governance (ESG) issues. Moreover, theSustainability Committee engages in discussion regarding how to addressrisks identified by the Risk Management Committee and deemed toconstitute management issues requiring particular attention over the longterm.
In addition, risks associated with projects involving investment
decisions that would entail a certain level of financial burden are discussed
at the Investment Evaluation Committee. In these and other ways, JAPEX
tasks committees other than the Risk Management Committee with risk
management in specific areas on an as necessary basis.
The risk management system, including the secretariat of the Risk
Management Committee, is jointly promoted by the Corporate Strategy
Dept., Administration & Legal Dept., and Auditing Dept.

1. Risks related to commodity prices and exchange rates
2. Risks related to business・E&P Business: Risks related to exploration anddevelopment investment, reserves, and those specificto overseas business・I/U Business: Risks related to natural gas sales andnatural gas thermal power generation business・Overall business: Risks related to accidents anddisasters, climate change, and establishment of new
businesses,etc.
3. Specific laws and regulations
4.	Risks associated with the variation in INPEXCORPORATION’s stock price
5. The Company’s shares held by the government
6. Compliance

Risk Management

https://www.japex.co.jp/en/sustainability/governance/riskmgmt/

In fiscal 2021, we have quantitatively assessed the financial
impact of combined risks in the case of simultaneous
occurrence of multiple risks of significant importance, in
addition to updating the risk matrix.
Please visit the following link to see the detailed risk
information posted on our corporate website.

Risk Management Process
Board of Directors
Direction

ReportRisk Management Committee(Chair: the President)
Approval

ReportSecretariat of the Risk Management Committee
Support/Instruction

ReportEach division

JAPEX Integrated Report 2022 40

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Integrity and Governance: Risk Management

Emergency Response and Business Continuity Plans

Business Risk Assessment
When making investment decisions that would entail a certain
level of financial burden, we employ the Decision Gate (DG)
process consisting of four phases (see the diagram below).
This process identifies risks and opportunities associatedwith such decisions from technical, economical, commercial,organizational, and political-social (TECOP) perspectives, withDecision Gate Reviews (DGRs) being carried out to evaluate
and discuss countermeasures to be implemented by theCompany and other matters. Items examined via each DGR are
also presented below. The Investment Evaluation Committee,
which takes on DGR-4, evaluates the appropriateness ofinvestment by taking into account not only the economic
potential of the project but also a broad range of business risks,
including those associated with ESG and geopolitical issues.
Moreover, the recent shift in the business environment inconnection with climate change has been radical. In conjunction
with this shift, since fiscal 2020, efforts have been under way,in countries and regions where each project takes place, to stepup monitoring of the status of carbon tax introduced along withgovernment-led reduction targets for GHG emissions and otherlocal regulatory trends. Results of each DGR are reported to the
Executive Committee, which is authorized to give final approvalon investment, and the Board of Directors.

The status of projects in the execution and operation
stage is overseen by management and corporate divisions
via monitoring at the Risk Management Committee, which
employs a cross-sectional approach to quantitatively identify
and assess each risk, with the aim of maintaining appropriate
business management.
As part of reviewing the effectiveness of our risk
management processes, insights and takeaways acquiredin the course of business operations (“Lessons Learned”)
are reviewed via the DGR-5 to utilize such lessons in future
investment decisions. The DGR-5 is mainly focused on
identifying factors contributing to the success or failure ofeach project to strengthen and improve the business risks
assessment and management process. Additionality, we report
matters related to important projects to the Board of Directors.
In fiscal 2021, we performed the DGR-5 regarding thetransfer of interest in the shale gas project and the end of thepromotion of the oil sands project in Canada, and reported theresults to the Board of Directors.

To ensure appropriate response to emergencies, we have inplace the Emergency Countermeasure Regulations and relevant
procedures in addition to various response manuals. At thetime of an emergency, business divisions and major businesslocations play a central role in information gathering, intragroup
communications, and employee instructions in accordance withprocesses set forth in the aforementioned documents. Dependingon the situation, the Emergency Response Headquarters will
be set up at JAPEX’s Head Office and work together with
Local Emergency Response Headquarters established atmajor business locations, including district offices. Moreover,emergency drills are conducted at least once a year at the Head
Office, district offices, and other major business locations.
Drawing on takeaways from these drills, we are continuously
striving to improve our processes for emergency response.
We also develop Business Continuity Plans (BCPs) to respondto a major earthquake, an outbreak of infectious diseases such as
COVID-19, and other incidents that would severely impact social
activities. Furthermore, we have prepared manuals for initial
responses to large-scale disasters. Based on these manuals,
emergency drills are being conducted at each business site alongwith periodic employee safety confirmation drills and other drills.

DG Process Overview
Investment decision stage

Execution and operation stage

Phase-1

Phase-2

Phase-3

Phase-4

Identify(Project kick-off)

Assess(Feasibility
study)

Select(Concept
selection)

Define(Detailed study)

DGR-1

DGR-2

DGR-3

Execute projects(Preparation for operationand facility construction)

DGR-4 (Investment Evaluation Committee)
Decision-making(Executive Committee/Board of Directors)

Deliberation New investment projects that could have a particularly significant impact on the Company’s
topicsbusiness and investment projects that will be undertaken as additions to existing projects
Evaluation
pointsRules andguidelines

Confirm the project’salignment with strategy, thenidentify risks and opportunities
based on assessments of theexternal environment

Identify all alternative
options and evaluate
their feasibility, risks,and opportunities

Select the concept
delivering maximum
value from multiple
options

OperateLearn lessons
from businessoutcomes

Get ready/Prepare toproceed into
execution phase

DGR-5

Major overseas E&P projects andsome domestic projects
Review the progress of project execution toprevent value impairment

Add to knowledge
for future projects

Decision Gate process and guidelines
Investment Evaluation Committee Rules
Investment Evaluation Guidelines

Risk Management Committee Rules
Project Management Guidelines

Information Security
JAPEX has in place the Information Security Committee, which
deliberates important matters associated with how to ensure theproper and secure management of information and facilitate its
efficient utilization, thereby maintaining a robust information security
management system. Under this system, we have formulated such
documents as Information Security Policy, Personal Information
Protection Policy, and Guidelines for the Handling of Personal
Information while developing and maintaining our IT platforms.
We also provide regular education on information security to ouremployees to raise their awareness and prevent the occurrence of
security incidents.
As for crisis management, we are continuously reviewing andimproving the technical aspects of cyber-attack countermeasures.

JAPEX Integrated Report 2022 41

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Integrity and Governance: Compliance and Respect for Human Rights
Basic Concept
To remain a company trusted by society, JAPEX is striving to establish a corporate culture of compliance withconventional wisdom and social norms where all officers and employees act ethically and with integrity. In line with the
JAPEX Group Code of Ethics and Conduct, the Company has declared its commitment to respecting human rights andnot tolerating any forms of discrimination and harassment, and is engaged in initiatives to advocate for human rights.

Compliancehttps://www.japex.co.jp/en/sustainability/governance/compliance/
Respect for Human Rights

https://www.japex.co.jp/en/sustainability/social/humanrights/

Compliance■ Promotion System
JAPEX has formulated the JAPEX Group Code of Ethics
and Conduct, a compliance manual, and a booklet featuringcommentaries on compliance case studies. In this way, we
strive to promote thorough compliance and ensure that ouraction is always guided by corporate ethics. These documents
are updated on an as necessary basis, with the latest versions
distributed to all employees.
Chaired by the President, the Risk Management Committee
discusses structures and policies related to compliance andverifies potential incidents of compliance violation.
■ Prevention of Bribery and Corruption
The JAPEX Group Code of Ethics and Conduct stipulates
that the Company shall maintain sound and transparent
relationships with politicians, political parties, and government
officials/agencies. Based on this code, the compliancemanual provides detailed requirements to be observed. These
requirements are understood and practiced by all officers andemployees.
The Group also established the Anti-Bribery Guidelines that
stipulate such matters as the development of a system forensuring strict compliance with relevant laws and regulations
and the clarification of internal authorization procedures. Inline with these guidelines, we implement periodic self-checks,
anti-bribery training, and other measures to prevent bribery
incidents in an effective manner.
There were no incidents involving the violation of the AntiBribery Guidelines in fiscal 2021. Furthermore, we do not makeany political contributions.

Respect for Human Rights■ Education
We have defined sustainability, compliance, and insider trading
prevention as three basic items deserving attention of all
officials and employees in the course of their daily operations.
Accordingly, lectures on these topics are mandatory for all
and incorporated into training for new hires and career stage
training, both of which are conducted annually.
■ Report & Consultation System
The JAPEX Group has a system for receiving reports on and/or consultation about issues associated with compliancerequirements, including respect for human rights, fairprocurement and trade, as well as the maintenance of properand appropriate relationships with politics and governments.
The system secures an external helpline through which
employees can directly report to or consult with corporate
lawyers while ensuring strict confidentiality to enable
anonymous reporting and consultation. We also prohibit the
detrimental treatment of those who use the system andotherwise strive to protect whistleblowers.
In fiscal 2021, one case was reported via this system andwas handled appropriately.

Report & Consultation Structure

https://www.japex.co.jp/en/sustainability/governance/compliance/

The JAPEX Group Code of Ethics and Conduct states that
the Company shall “Respect the human rights of all people.”
Furthermore, based on this code, our compliance manual
stipulates what must be complied with in accordance withinternational standards, including the Universal Declaration of
Human Rights, the International Bill of Human Rights, the ILO
International Labour Standards, and the United Nations Global
Compact.
Overseas, we giver consideration to and respect the rights ofindigenous peoples, their cultures, and customs in the course of
executing our business. Meanwhile, with regard to transactions
with suppliers, our CSR Procurement Policy clarifies that they
are asked to comply with human rights-related legal regulationsin addition to adhering to relevant ethical standards and social
norms. Thus, we strive to avoid transactions that debase thetrust society has placed in us.
In fiscal 2021, as a starting point for conducting human rights
due diligence, we assessed the gaps between international
standards/guidelines and internal systems as well as conductedinterview surveys on the response status of related divisions.
■ Countermeasures against Harassment
We have in place the Rules on the Prevention of Harassment
and are working to create an inclusive working environment. If
an incident involving harassment occurs, we carefully conduct
interviews with individuals involved and take strict disciplinary
action while issuing a reminder to employees to prevent similar
incidents from recurring.
In fiscal 2021, we provided managers with three training
sessions on harassment prevention. We also distributed periodic
e-mail newsletters to all employees and provided them with
relevant information via the intranet to raise their awareness.
JAPEX Integrated Report 2022 42

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Sustainability Management
Basic Concept
JAPEX believes that our mission is to provide a stable supply of energy and that our business activities themselves area form of CSR. Under this recognition, we have been promoting sustainability activities based on a policy on sustainability
activities, which is to actively work on solving social issues toward the realization of a sustainable society, and core themes
to realize value creation in the medium- to long-term.

Promotion System

Five Core CSR Themes “SHINE”

The Sustainability Committee has been established todeliberate and discuss medium- to long-term business issues
and relevant sustainability matters that we should address toensure the Company’s sustainable growth.
The President serves as the Chair, the officer in charge of
the Corporate Strategy Dept. serves as the Vice Chair, andthe Corporate Strategy Dept. serves as the secretariat. The
Committee meets multiple times per year. The Committee
deliberates and discusses the following matters.

The JAPEX Group, including subsidiaries and associates, places
great importance on corporate social responsibility (CSR) in
conducting our business. Based on this concept, we identified
five core CSR themes “SHINE” and individual challenges
in 2014 to meet the expectations and demands of our
stakeholders and grow as a trusted global company. We review
each challenge based on changes in society and its demands.
We have currently identified 12 challenges. Every year, weestablish CSR action plans in line with the core themes andindividual challenges. The Sustainability Committee implements
a PDCA cycle by reviewing the achievement progress andsetting goals for the following fiscal year.
We set 44 targets for the Fiscal 2021 CSR Action Plans. We
achieved 30 targets (100% and above), partially achieved 13
targets (80%–under 100%), and missed 1 target (under 80%).

• Establishment and review of management plans•	Basic policies related to sustainability, including the Codeof Ethics and Conduct	Important environmental, social, and governance (ESG)
issues	Establishment and review of core CSR themes and CSR
action plans	Disclosure of sustainability information outside the Company,
such as in the Integrated Report••

Sustainability Management

https://www.japex.co.jp/en/sustainability/management/

Review Process for Each Challenge

1. Evaluating present status and identifying challenges
		 Comprehensively identify CSR challenges while referring to the
GRI Standards and other guidelines.

2. Analyzing and evaluating the challenges
		 Set the priority of each challenge considering the business impact
and the importance to stakeholders.

3. Conducting internal survey
		 Conduct an internal questionnaire survey to define the importanceof each CSR challenge for management officers and managers.

4. Reviewing the items of CSR disclosure		 Identify new each challenge based on the results of the evaluationand survey.

•

Matters deliberated by the Sustainability Committee
are reported to the Board of Directors, and resolutions onimportant matters are resolved. In addition, the status ofactivities related to ESG is reported every year to the Board of
Directors.
Furthermore, the Sustainability Committee establishes andreviews CSR action plans every year.
We place managers and personnel responsible forsustainability in each department and established a promotion
system to discuss and coordinate the formulation of actionplans and the disclosure of information.

Five Core CSR Themes “SHINE”
Core CSR themes

Individual challenges
1 Stable energy supply 
2 Development of new technologies
3 Climate change response
4 Occupational health and safety 
5 Pollution prevention and resource recycling
6 Preserving biodiversity and ecosystems


ESG

E
S


S

Stable and sustainable energy supply

H

HSE

I

Integrity and governance

7 Governance 
8 Crisis management 
9 Compliance


G


N

Being a good Neighbor

10 Growing together with stakeholders


S


E

The Employer of choice

11 Respecting employee diversity and developing human resources
12 Creating a fair and good working environmentS

as our cultureE
SJAPEX Integrated Report 2022 43

JAPEX’s Vision

Strategy

Value Creation through Business

https://www.japex.co.jp/en/sustainability/management/materiality/

Main CSR Action Plan Targets and Achievements in Fiscal 2021
Individual challenges

Achievement Evaluation: Achievement rates of  (100% and above),  (80% and above-under 100%), and  (under 80%)

Fiscal 2021 Action Plans and targets

Fiscal 2021 achievements

Evaluation

 upplied electricity stably throughout the year and achieved the unplanned outage rate target.
S• 
Although power generation was temporarily suspended to conduct a safety check following the Fukushima Prefecture Offshore Earthquake
on March 16, 2022, we continued supplying electricity through procurement from the wholesale electricity market and other means.

 chieved zero supply disruption to clients. Although gas supply from the Soma LNG Terminal was temporarily suspended to conduct a safety check following
A
the Fukushima Prefecture Offshore Earthquake on March 16, 2022, there was no supply disruption by switching to a gas supply from another location. We
resumed a gas supply to the neighboring Fukushima Natural Gas Power Plant from the Soma LNG Terminal on March 19 after the safety was confirmed.

Promote the study of CCS/CCUS commercialization in Japanand overseas

Worked on various activities as follows:• Participated as a member of the Ministry of Economy, Trade and Industry’s CCS Long-Term Roadmap Study Group and the Japan Petroleum
Development Association’s Task Force on CCS Promotion and offered opinions and proposals to develop the business environment.
• 
Launched the feasibility of a carbon recycling project utilizing the Yufutsu Oil and Gas Field in Hokkaido and an effective
CO2 utilization project utilizing the Higashi-Niigata Gas Field.
• Participated in a feasibility study of a CCUS project using the joint crediting mechanism in Indonesia.
• Participated in and a feasibility study of a CCS project in Malaysia.

Achieve our GHG emission reduction target (Scope1+2) for
FY2021: reduce the emission intensity by 7% compared to FY2019(FY2019: 3.97 ton-CO2/TJ; FY2021 target: 3.69 ton-CO2/TJ)

Achieved the target with the intensity of 3.20 ton-CO2/TJ, a 19% reduction from fiscal 2019, as a result of our emission
reduction activities, such as reducing methane gas emissions into the atmosphere and conserving energy.

○

Reduce domestic occupational injury frequency rate (10%lower than the average for the last three years)• 
Lost Time Injury Frequency (LTIF*1): 0.18
• 
Total Recordable Injury Rate (TRIR*2): 1.42

Achieved both targets through continued safety activities with the results as follows:
LTIF: 0.00
TRIR: 0.88

Continue KEI’s efforts in Indonesia to earn the Blue ranking in the Programfor Pollution Control, Evaluation and Rating (PROPER*3), a performancelevel evaluation program for corporate environmental management

Earned the Blue ranking for 10 consecutive years by continuing environmental activities.



Secure stable supply electricity from the Fukushima Natural
Gas Power Plant•

S

Sustainable
EnergySupply1 Stable energy supply
2 Development ofE
new technologiesS 3 Climate change
response

4 Occupational health

HSE as

H Our
CultureES

and safety
5 Pollution prevention
and resource
recycling
6 Preserving

biodiversity andecosystems

Continue efforts to reduce negative impacts at businesslocations and their surrounding areas

 ontinued to implement measures and monitoring based on the results of biodiversity risk assessment in each operating area.
CCooperated in wildlife monitoring activities*5 with the local community (IAG*4) through JACOS, Canada.

 elected the Prime Market in the Tokyo Stock Exchange’s new market segments. Enhanced the content of our Corporate
S
Governance Report, such as the skills matrix of Directors and other officers.
• 
Worked to improve the effectiveness of the Board of Directors, such as by enhancing discussions on the management plan.

 eviewed and adapted our action plan as appropriate to changes in government’s policies, etc.
R
Dealt with infected persons appropriately to prevent cluster infections.

 isclosed the UK Modern Slavery Act Statement as planned.
DConducted a survey on internal processes in light of the international standards and guidelines for respecting human rights
and identified issues, and formulated an improvement plan for the following fiscal year.
• 
Although we distributed email newsletters to all employees and provided in-house training sessions to prevent harassment, we failed to achieve some plans.



Make contributions to local communities and engage in social
activities in our domestic and overseas operating areas andprojects

Although we implemented the following activities in domestic and overseas projects, we failed to achieve some plans.
• 
Canada: Held regular meetings, but not as many times as scheduled due to the COVID-19 pandemic. *5• 
Indonesia: Provided free electricity and water, constructed and improved roads, and implemented port expansion work as planned.
• 
Iraq: Cooperated with operators to donate anti-COVID-19 supplies to local medical institutions.
• Japan: Cleaned up streets around the business locations, participated in volunteer cleanups, sponsored advertisements, made donations, held on-site tours
for local parties concerned, participated in community events, ensured safety for children commuting to school, continued volunteering to stand guard, etc.

Implement measures to realize action plans based on the Act on Promotion of
Women’s Participation and Advancement in the Workplace• Increase the percentage of female new-graduates hired to 30% or more, etc.

Achieved the target with the percentage of female new-graduates hired at 35.3%.

Implement human resource development training programs
and professional courses

Although we implemented most of the training programs, including overseas business skills training, career stage training, and psychological safety
training, as planned, we failed to achieve some plans for the professional education for technical employees due to the COVID-19 pandemic.

Increase the rate of paid leave taken to 75% or more

Achieved the target with the rate of paid leave taken at 81.2%.



Implement initiatives to maintain and improve employee health• Increase the percentage of employees walking at least 8,000
steps per day on average to 40% or more
• Implement efforts to reduce the number of smokers• Maintain 100% of employees receiving annual medical checkups•

 artially achieved the targets. The results of the various initiatives were as follows:P- Percentage of employees walking at least 8,000 steps on average per day: 12%- Number of smokers: decreased by nine persons against the target of 10 persons- Percentage of employees receiving annual medical checkups: maintained 100%
• 
Certified as one of the Health & Productivity Management Outstanding Organizations for the sixth year in a row throughcontinued efforts for health management.

Strengthen a highly efficient and transparent corporate
governance system

Integrity

I and

7 Governance

8 Crisis management
G Respond to the COVID-19 pandemic

9 ComplianceGovernance

N GoodS

10 Growing togetherwith stakeholders

Neighbor

11 Respecting employee

TheE Employer
of ChoiceSdiversity anddeveloping humanresources
12 Creating a fair and
good working
environment

•
•

•

•
•

•

Implement initiatives for respecting human rights

Being aSDGs•

Achieve zero disruption to the supply of natural gas

Stable andFinancial and Other Information

CSR Activities’ Action Plans, Targets, and Achievements

Sustainability Management

Core CSR themes ESG

Initiatives to Support Value Creation•*1 Lost Time Injury Frequency: Calculated as the number of lost time injuries per 1,000,000 work hours.
*2 Total Recordable Injury Rate: Calculated as the number of total recordable injuries per 1,000,000 work hours.
*3 PROPER is a rating program by the Indonesian Ministry of Environment to evaluate companies’ environmental measures and environmental regulation compliance, from the highest rating of gold to green, blue, red, and black.

*4 IAG: Indigenous Advisory Group*5 Period of the activities: Until the end of the project, from January
to August in 2021

JAPEX Integrated Report 2022 44

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

CSR Activities’ Action Plans, Targets, and Achievements

Sustainability Management

https://www.japex.co.jp/en/sustainability/management/materiality/

CSR Action Plan Targets in Fiscal 2022
Core CSR themes ESG

Individual challenges

Fiscal 2022 Action Plans and Targets

Core CSR themes ESG

Individual challenges•Promote the E&P Business toward stable supply of oil and natural gas
1 Stable energysupply•Promote the I/U Business toward stable supply of natural gas and electricity

7 Governance•Promote DX based on business challenges•Promote the development of technologies to realize the early practicalapplication of CCS/CCUS

2 Development of

new technologies
Stable andS

Sustainable
Energy•Continue the development of technology to be applied to domestic tightoil reservoirs through joint research with JOGMEC•Continue measures toward commercialization of methane hydrate•Continue to strengthen the Business Continuity Plan (BCP)

Integrity

I and
GovernanceG
8 Crisismanagement

9 Compliance•Achieve GHG emission reduction targets
3 Climate change

response

FY2022 target based on JAPEX2050: reduce the GHG emission intensity(Scope1+2) by 10% compared to FY2019
FY2019 emission intensity: 3.97 ton-CO2/TJ•Reduce emissions to achieve the FY2030 GHG emission reduction target
set by the Japan Petroleum Development Association based on theJapan Business Federation’s Carbon Neutrality Action Plan

Being aN GoodS

Neighbor

10 Growing togetherwith stakeholders

power generation business (biomass, offshore wind power, etc.)•Contribute to a low-carbon society by promoting the use of natural gas

11 Respecting


employee diversity•Promote initiatives based on the Medium-term HSE Plan
health and safety

Reduce domestic occupational injury frequency rate (10% lower than theand developing

average for the last three years)

human resources•

Lost Time Injury Frequency (LTIF): 0.09•

Total Recordable Injury Rate (TRIR): 0.88

H Our
CultureE
5 PollutionS

prevention andresource recycling•Continue measures to maintain a 45% reduction in VOC emissions

compared to the base year (FY2000)•Continue water stress assessments in our operating areas•Promote measures to reduce water consumption•Promote measures to reduce waste•Continue KEI’s efforts in Indonesia to earn the Blue ranking in the Programfor Pollution Control, Evaluation and Rating (PROPER), a performance-levelevaluation program for corporate environmental management

E Employer•Ensure thorough compliance•Promote initiatives for respecting human rights•Make contributions to local communities and engage in social activities
in our domestic and overseas operating areas•Promote supply chain management

Achieve targets based on the DE&I policy• Percentage of female new-graduates hired: 30% or more
• Percentage of mid-career hires to total hires: 50% or more
• Number of female managers: 25 or more (by the end of FY2025)• Percentage of mid-career hires in management positions: Maintain
20% or more (until the end of FY2025)• Percentage of male employees taking childcare leave: 80% or more (bythe end of FY2025)•Strengthen human capital management•Implement human resource development training programs

The
HSE as•Strengthen cyber security•Promote constructive dialogue with stakeholders•Promote diversity, equity, and inclusion (DE&I)•Promote initiatives for the commercialization of the renewable energy

4 Occupational
•Respond to the COVID-19 pandemic•Continue overseas security response•Promote the study of CCS/CCUS commercialization in Japan and overseas

Supply•Promote the Enterprise Risk Management (ERM) Framework•Strengthen information security and promote personal information protection•Continue working to develop deep-sea mineral resources through J-MARES

E

S


Fiscal 2022 Action Plans and Targets•Strengthen our corporate governance systemS•Promote the creation of a good working environmentof ChoiceEncourage employees to take paid leave(Foster a culture of taking at least one day off per month andencourage employees to take at least seven consecutive days off)•

12 Creating a fair and

good working
environment•Promote health management

Maintain 100% of employees receiving annual medical checkups
Support employees to prevent lifestyle-related diseases using a healthmanagement system• Implement efforts to reduce the number of smokers (measures toprevent passive smoking)• Implement efforts to promote women’s health••

6 Preserving


biodiversity andecosystems•Continue efforts in creating positive impacts in protected areas•Continue efforts to reduce negative impacts at business locations andtheir surrounding areas

JAPEX Integrated Report 2022 45

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Sustainability Management

Participation in Initiatives
 UN Global Compact

 Declaration of Partnership Building Global CCS Institute

JAPEX has participated in the UN Global Compact (UNGC) since2020 and has been taking measures related to 10 principles
in four areas of the UNGC covering human rights, labour,
environment, and anti-corruption.
In fiscal 2021, we participated in 9 of the 14 subcommitteesof the Global Compact Network Japan (GCNJ), which mainlycomprises Japanese companies that have signed the UNGC.
We have collected information related to the latest trends andbest practices on sustainability and enhanced the networks of
personnel in charge of promoting sustainability.

JAPEX announced the Declaration of Partnership Buildingin fiscal 2021. We endorse the purpose of the Council on
Promoting Partnership Building for Cultivating the Future,
whose members consist of Chairman of the Japan Business
Federation; Chairman of the Japan Chamber of Commerce andIndustry; President of the Japanese Trade Union Confederation(RENGO), and relevant Ministers (Cabinet Office; Ministry of
Economy, Trade and Industry; Ministry of Health, Labour andWelfare; Ministry of Agriculture, Forestry and Fisheries; andMinistry of Land, Infrastructure, Transport and Tourism), andwill collaborate, co-exist, and co-prosper with our supply chaintransaction partners.

In May 2022, JAPEX joined the Global CCS Institute (GCCSI),
an international think tank whose mission is to accelerate
the deployment of carbon capture and storage (CCS)
globally. GCCSI’s membership includes governments, privatecompanies, and research bodies. GCCSI shares expertiseand data regarding CCS. By utilizing insights and membershipnetworks obtained through GCCSI, we will further advance ourefforts regarding CCS/CCUS.

GCCSI Official Website

UN Global Compact (UNGC)

https://www.globalccsinstitute.com/

https://www.unglobalcompact.org/

 CCS+ Initiative

The Ten Principles in Four Areas of the UN Global Compact
Human Rights

LabourEnvironment

Anti-corruption

Principle 1: B usinesses should support and respect the protection of internationallyproclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.
Principle 3: B usinesses should uphold the freedom of association and the effective
recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: t he elimination of discrimination in respect of employment and occupation.
Principle 7: B usinesses should support a precautionary approach to environmental
challenges;
Principle 8: u ndertake initiatives to promote greater environmental responsibility; andPrinciple 9: e ncourage the development and diffusion of environmentally friendly
technologies.
Principle 10: B usinesses should work against corruption in all its forms, including
extortion and bribery.

FY2021 Subcommittee Activity Results•Environmental Management Subcommittee•Human Rights Subcommittee•Human Rights Due Diligence Subcommittee•Anti-corruption Subcommittee•Disaster Risk Reduction (DRR) Subcommittee•ESG Subcommittee•WEPs Subcommittee•Reporting Research Subcommittee•Circular Economy Subcommittee

Portal Website for Declaration of Partnership Building

https://www.biz-partnership.jp/index.html

 GX League
In February 2022, JAPEX endorsed the GX* League Basic
Concept announced by the Ministry of Economy, Trade andIndustry. As many as 440 companies have declared theirendorsement of the GX League Basic Concept. We will workwith the endorsing companies and the government to realize
GX for achieving carbon neutrality.

In June 2022, JAPEX joined CCS+ Initiative (CCS+), which
is an international platform aiming to scale-up CCS projects.
By developing carbon accounting methodologies for eachphase of CO2 capture, transport, and storage, CCS+ aims forthe accurate measurement of CO2 reduction in diverse CCS
projects and the monetization of such projects. Through theparticipation in CCS+, we will strive to contribute to realizing
a carbon-neutral society by establishing methodologies togenerate carbon credits from CCS/CCUS.
CCS+Official Website

https://www.ccsplus.org/

GX League official establishment preparation website

https://gx-league.go.jp/
Global Compact Network Japan (GCNJ)

http://www.ungcjn.org/* Green Transformation (GX): Transformation of the entire economic andsocial system to realize a carbon-neutral society
JAPEX Integrated Report 2022 46

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Stable and Sustainable Energy Supply Climate Change Response
Information on other individual challenges related to stable andsustainable energy supply is available on the following pages:

Basic Concept
JAPEX positions climate change response as one of its top management priorities. Aiming to contribute to global
initiatives on climate change and the government’s goal of achieving carbon neutrality by 2050, the entire JAPEXGroup, including subsidiaries and associates, is working to transform its business portfolio by reducing GHG emissions
and developing CCS and other new technologies.

Stable and Sustainable Energy Supply (E&P field) p. 24 ➡
Stable and Sustainable Energy Supply (Infrastructure/Utility field) p. 27 ➡︎Development of New Technologies (Carbon Neutral field) p. 30 ➡︎
Development of New Technologies

https://www.japex.co.jp/en/technology/

Climate Change Response■ Policy on and Status of Climate Change Response
Policy on Climate Change Response
In May 2021, JAPEX formulated its carbon neutral direction andobjective JAPEX2050 and clarified its direction to achieve net
zero GHG emissions from its operations by 2050 and further
expand its businesses to contribute to realization of a carbonneutral society. As a concrete roadmap to 2030, we formulated
the JAPEX Management Plan 2022–2030 in March 2022.
Based on this new management plan, we will push forwardwith the transition to a carbon-neutral society and work to build
a medium- to long-term business foundation.
In addition, we will continue to formulate strategies
based on analyses of scenarios in line with the TCFD
Recommendations*, strengthen internal processes, including
governance structure and risk management, and strive tofurther enhance information disclosure.

Outline of Initiatives Taken in Fiscal 2021
Based on the supplementary guidance issued by the TCFD in
October 2021, we worked to strengthen our internal processes
and enhance disclosure information. Our major initiatives aredescribed in the table below.
To enhance disclosure information, we received thirdparty assurance for disclosed data on our GHG emissions andenergy consumption and disclosed GHG emissions from eachof the 15 categories of Scope 3 activities. We also responded
to the CDP Climate Change Questionnaire for the first time,
obtaining a B rating.
*R ecommendations aimed at facilitating information disclosure with regard
to the financial impact of climate change that were issued in 2017 by the
Task Force on Climate-related Financial Disclosures (TCFD), which wasestablished by the Financial Stability Board (FSB; consisting of central bankrepresentatives and financial authorities from major economic powers)

Major Initiatives Taken in Fiscal 2021 in Line with TCFD Recommendations

Governance・Established the Sustainability Committee and the Risk Management Committee
・Identified Directors and Audit & Supervisory Board Members with ESG and sustainability skills and disclosed such information as the
skills matrix in the Corporate Governance Report・Added the achievement level of company-wide climate change response objectives to annual evaluation items of Executive Officers (from fiscal 2022)

Strategy・Formulated the carbon neutral direction and objective JAPEX2050 and JAPEX Management Plan 2022–2030
・Conducted a scenario analysis and used the results for the consideration of the management plan by the Sustainability Committee
・Calculated the percentage of growth investments to be allocated to risk and opportunity assets in the management plan
・Quantitatively assessed physical risks

Risk
Management
Metrics andTargets

・Monitored climate change risks of major projects, progress towards GHG emission reduction targets, and climate change risks
specified in the risk matrix through the Risk Management Committee
・Set targets for GHG intensity reduction targets
・Prepared and implemented GHG emission reduction action plans
・Calculated emissions from each of the 15 categories of Scope 3 activities■ Status of Climate Change Response in Line with TCFD
Recommendations
Governance
Climate change response is the priority of JAPEX’s
management, and we have built a system for appropriate
decision-making under the supervision of the Board of
Directors.
Key matters for business execution, including climatechange response, are deliberated at the Executive Committee
and various other committees before being resolved by orreported to the Board of Directors. Key matters for execution,
including climate change response and other medium- to longterm policies and plans, are subject to resolution by the Boardof Directors. The JAPEX2050 and the new management plan
were all matters resolved by the Board of Directors. In addition,
the progress toward GHG emission reduction targets, ESG
external evaluation results, ESG activity status, and other suchinformation are reported annually to the Board of Directors.
Climate change response is also addressed by the
Sustainability Committee, Risk Management Committee,
and Investment Evaluation Committee in addition to the
Executive Committee. We have created a PDCA cycle forclimate change response through deliberations at and reports
to various committees as well as data collaboration andintegrated management among business divisions and various
committees.
In fiscal 2021, we prepared a skills matrix that lists theknowledge, experience, and skills of each of our Directors andAudit & Supervisory Board Members. In this matrix, we also
specified ESG and sustainability skills as items.
JAPEX Integrated Report 2022 47

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Stable and Sustainable Energy Supply Climate Change Response
PDCA Cycle Related to Climate Change
Board of Directors
Supervision

Executive Committee
Proposal and report

PDCA cycle
Investment Evaluation Committee
Sharing ofmanagement
policies

Sustainability Committee

Evaluation

Report on
results
Risk management

Business divisions

Risk
Expected
categories timing

Impactlevel

Countermeasures

Long
term

Increase inadditional expenses
due to carbon taxes
and otherenvironmental laws
and regulations• GHG emission
reduction based on
the net zero target by
2050

MarketLong
andtechnology termrisks

Decrease inrevenue due toweaker oil and gas
demand and lower
prices• Assessment oftransition risks
through internalcarbon pricing (ICP)
during the investment
stage

Reputation Medium
risk
term

Divestment fromthe E&P Business• Shift to a sustainablebusiness portfolio
based on the resultsof scenario analysis

Policy
and
legal
risks
Transition risks

Linkage to Officer Compensation
To strengthen the linkage between the achievement of GHG
emission reduction targets and management responsibility, we
have added the achievement level of company-wide climatechange response objectives to annual evaluation items of
Executive Officers from fiscal 2022. The annual GHG emission
reduction targets set forth in the CSR action plans serve as
indicators.

Main Climate Change Risks that Affect JAPEX and Countermeasures

MediumPerformance investment
management
Business portfolio
management

Risk Management Committee

Sharing ofmanagement policies

Large

Feedback on major
management risks

Climate Change Risk Assessment
Based on the risk assessment results to date, we haverecognized that transition risk has a greater impact thanphysical risk on our business. To cope with this, we haveformulated the JAPEX2050 and the new management plan. In
fiscal 2021, we also conducted a quantitative assessment ofphysical risks and confirmed that, at this moment, their impact
is smaller than that of transition risks.

Large

Proposal

Sharing ofmonitoring matters

Proposal

Strategy
Formulation of New Management Plan
Because of the business characteristics of handling fossil
resources, JAPEX has positioned climate change response asa key matter in the consideration of business strategies. We
conduct scenario analyses to evaluate the medium- to longterm impact that climate change will have on the Company’sbusiness. In formulating the new management plan in fiscal
2021, we conducted a financial impact analysis under four
scenarios, more scenarios than usual, to evaluate the impact
of climate change risks will have on our medium- to longterm earnings in more details. Specifically, we conducted ascenario analysis using carbon and oil prices published in thefour scenarios (NZE*1, SDS*2, APS*3, and STEPS*4) presented in
the World Energy Outlook (WEO) of the International Energy
Agency (IEA) as parameters.
We used the analysis results for the consideration of the
new management plan by the Sustainability Committee andalso evaluated the percentage of investment allocated to risk
assets from the perspective of climate change to develop asustainable business portfolio, even under the NZE scenario
with the most stringent conditions.
*1 Net Zero Emissions by 2050 Scenario*2 Sustainable Development Scenario*3 Announced Pledges Scenario*4 Stated Policies Scenario

Mediumterm

Impacts on onshore
and offshore
facilities due toextreme changes inweather

Small

Chronic Long
risks
term

Impacts of sea-level
rise on onshore andoffshore facilities
and impacts ofwater resources
depletion

Small

Main Treatment of Climate Change Response at Various Internal Committees
Committee

Frequency of action

Board of Directors

Resolution and report of key matters for major business execution related to climate change response(resolution of the JAPEX2050 and the new management plan, report on the management risk matrix,
report on ESG activities, etc.)

Around 5 to 10
times per year

Executive Committee

Deliberation of key matters for business execution related to climate change response(deliberation of the JAPEX2050 and the new management plan and deliberation of the management
risk matrix)

Around 4 times
per year

Sustainability Committee

Deliberation of the Corporate Vision and the basic policies related to ESG (deliberation of the
JAPEX2050 and the new management plan)

Around 10 times
per year

Cross-sectional assessment and management of management risks, including climate change
response, monitoring of individual businesses*, and deliberation and report of countermeasures forvarious issues (deliberation of the risk matrix, report on the results of GHG emission targets)Around 2 times
per year

Risk Management Committee* Such as carbon tax trends in operating regions and GHG emission results at locations

Investment Evaluation

Deliberation of risks for major investments* and the appropriateness of investments

Committee* If carbon tax and GHG emission regulations emerge, we evaluate their impacts, and even if they do not emerge, we evaluate
their impacts based on internal carbon pricing.

Acute
risks
Physical risks

Main issue (Matters inside parentheses are those related to climate change addressed in FY2021)

Impact• As a result of theweather disaster risk
assessment using
hazard maps, theimpact is limited, andno problem hascurrently been found in
the existing
countermeasures.
• As a result of the risk
assessment of sea-level
rise using scientific data,
the impact is limited,and no problem hascurrently been found in
the existing
countermeasures.

Note: Medium term is five or fewer years and long term is over five years.

Convened as
appropriate

JAPEX Integrated Report 2022 48

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Stable and Sustainable Energy Supply Climate Change Response
Risk Management

Metrics and Targets

Japan Petroleum Development Association Targets

JAPEX manages climate change risks within its integrated risk

JAPEX Group’s GHG Emission Reduction Targets

The Japan Petroleum Development Association (JPDA),

management, which is a process for identifying and assessing

We established a net zero target by 2050 and a fiscal 2030

which JAPEX belongs to, participates in the Japan Businesscompany-wide risks. Within the risk matrix created by conducting

target as a milestone for GHG emissions (Scope 1+2) in our own

Federation’s Carbon Neutrality Action Plan. JPDA’s Carbon

a quantitative risk assessment based on the impact andoperations.

Neutrality Action Plan covers mining facilities of oil andprobability of risks, we positioned transition risks as major risks
with a large impact, and list them as business risks in our Annual
Securities Report.

natural gas development businesses in Japan. The fiscal• 2050: Achieve net zero
• FY2030: Reduce GHG emission intensity (Scope 1+2) in ouroperations by 40% compared to fiscal 20192030 target was revised in December 2021. The target wasrevised upward from the previous target of reducing 28%

In addition to reviewing the risk matrix mentioned above, theIn addition, regarding emissions in our own supply chain (Scope

compared to fiscal 2013 to reducing 40% compared to fiscal

Risk Management Committee also confirms the progress toward3), we established qualitative targets where we aim to strengthen

2013. In addition to our GHG emission intensity targets, we

GHG emission reduction targets and manages risks of existing

business fields that contribute to emission reductions.

are also working to achieve the JPDA’s emission reduction

major projects. The Sustainability Committee addresses medium-⃝ Scope 1+2 Emission Intensity

targets.

to long-term climate change risks, and the Investment Evaluation

The emission intensity for Scope 1+2 was reduced by 19%

Committee manages climate change risks such as carbon taxes

from fiscal 2019, being further reduced from the previous year.

Initiatives for Reducing GHG Emissions

in the investment evaluation of new projects. In this way, we

The main reasons were an increase in electric power soldWe have established priority action items for Scope 1 and 2 asdevelop and maintain processes to manage diverse climate(increase in intensity denominator) by JAPEX following the startan action plan for reducing GHG emissions. Scope 1 reductionchange risks.

of operations at the Fukushima Natural Gas Power Plant and ameasures include injection of emitted CO2 in oil and gas fields

decrease in GHG emissions due to energy conservation, lower

in Japan, whereas Scope 2 reduction measures include thevent/flare emissions, etc.

gradual shift to zero emission electricity consumption.

Reference: Risk Management

p.40 ➡︎In fiscal 2021, we purchased a non-fossil fuel certificate

Changes in Scope 1+2 Emission Intensity

GHG emission intensity(ton-CO2/TJ)*1Reduction rate from base year (%)

FY2019FY2020

FY2021

3.97

3.44

3.20

our Head Office and Research Center to reduce Scope 2

＿

-13%

-19%

emissions and achieved zero emissions. In the future, infor 239 tons-CO2 equivalent to the electricity used at*1 In line with the base year emissions recalculation of the GHG Protocol, which is an international
standard for GHG calculation and reporting, we reflected the end of our JACOS business infiscal 2021, and for the base year emissions (FY2019) and all fiscal years thereafter, we calculate
GHG emission intensity excluding these projects from emissions and energy supply volume.

addition to purchasing non-fossil fuel certificates, we will

⃝ Scope 3 Emissions

conservation and increasing the amount of renewable

work to further reduce emissions with an eye on energy

The total emissions for the 15 categories of Scope 3 activities

energy introduced. For Scope 1 emissions, we will also

were 10,170 thousand tons, of which Category 11 emissions

continue our efforts to reduce self-consumed gases and(use of sold products) accounted for 93% of the total. The total

vent/flare emissions, in addition to considering the injection

Scope 3 emissions were reduced by 38% from the previousof emitted CO2.

fiscal year. Going forward, we will continue striving to reduce
emissions by working to expand the supply of low-carbon
energy resources such as renewable energy and natural gas.

JAPEX Integrated Report 2022 49

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

HSE as Our Culture HSE
Basic Concept
The JAPEX prioritizes occupational health, safety, and environment (HSE) in its business activities in consideration of
the business characteristics of handling natural gas and crude oil and works to reduce the risks of accidents and injuries
and environmental pollution. Under the JAPEX HSE Policy, we have established an HSE management system to assess
HSE risks and implement countermeasures, followed by periodic reviews by the HSSE Committee, thereby creating a
PDCA cycle, in an effort to foster a culture of “HSE First” and “Safety First.”

Health, Safety, and Environment (HSE)

https://www.japex.co.jp/en/sustainability/social/hse/

Medium-term HSE Plan
To share the medium- to long-term vision and targets across the Group and simultaneously take action, we have formulated the Medium-term HSE plans and are working to reduce risks and foster an HSE culture. This medium-term planconsists of eight goals, with priority targets set for each goal. HSE targets at each of the Company’s locations are set based on this medium-term plan. In addition, we set some of the targets in the CSR Action Plan and carried out activities.
In fiscal 2021, the first year of the Second Medium-term HSE Plan (FY2021–FY2023), we achieved our reduction targets of accident and injury frequency through various education and training programs, measures to address unsafe
areas, and daily efforts to foster our HSE culture. In addition, we further enriched internal education and training, improved processes and optimized documentation to reduce HSE risks, conducted a water risk assessment, and worked onenergy conservation, thereby achieving most of our targets for fiscal 2021.
Eight Goals of the Second Medium-term HSE Plan and Main Achievements
Eight goals of the Second Medium-term HSE Plan

Priority targets by FY2023

Main achievements in FY2021

・Achieved the targets for reducing the frequency of accidents and injuries
LTIF target: 0.18, result: 0.00; TRIR target: 1.42, result: 0.88
 eveloped a manual for analyzing unsafe areas and reviewed the policy for・D
introducing the “Stop Work Authority” approach

1

Reduction of injury frequency

・Established targets for reducing the frequency of accidents and injuries at the end of FY2023:
0.14 for LTIF*1 and 1.15 for TRIR*2
・Strengthen the analysis of accident factors and promote the “Stop Work Authority” approach・Improve the health of employees and manage the hygiene of workplaces

2

Legal compliance and HSE-MS optimization

・Optimize HSE documentation
・Strengthen the contractor management system for small- to mid-sized construction

・Formulated the Corporate HSE Guideline Policy, etc.
 trengthened the HSE management of small- to mid-sized construction
・S
contractors

3

HSE awareness raising and fostering of positive
behavior

・Foster positive behavior to enhance HSE leadership larify requirements for HSE-related education, experience qualifications and strengthen the・Chuman resource development program・Optimize HSE staffing including the assignment and utilization of HSE officers

・Introduced HSE education into training for new managers
・Clarified the policy for assigning HSE officers
 valuated the HSE culture level within the Company through an all・E
employee questionnaire survey followed by consideration of improvements

4

Instillation of process safety and building ofmanagement systems

・Instill process safety methods
・Put in place a process safety management system

・Completed the documentation of standards
・Completed the basic education of the HAZOP workshop

5

Enhancement of emergency response capabilities

・Enhance employees’ disaster prevention capabilities (knowledge and skills)
・Build a company-wide disaster prevention system onducted comprehensive drills assuming an earthquake striking the Tokyo・C
metropolitan areaR・ evised the Emergency Countermeasure Regulations and other documents
 igned an agreement to strengthen BCP alignment with consolidated
・S
subsidiaries

6

Strengthening of measures against climate change

・Enhance activities for reducing GHG emissions for mitigation
・Strengthen efforts for adaptation

・Mitigation: continued efforts for energy conservation
・Adaptation: identified impacts of climate change and sorted out thesituation for examining adaptation measures

7

Enhancement of environmental risk management

・Promote initiatives for water resources, pollution prevention, and conservation of biodiversity
・Strengthen the environmental risk assessment system

・Conducted a water risk assessment
 onsidered strengthening the process of environmental and social・C
assessment of projects

8

Strengthening of overseas HSE governance・Strengthen HSE audits and HSE management in overseas business・Boost physical security (facility security, mobile security, and personnel protection)

 ompleted the formulation of the HSE evaluation policy for overseas
・C
business・Developed an internal process for physical security*1 Lost Time Injury Frequency: Calculated as the number of lost time injuries per 1,000,000 work hours.
*2 Total Recordable Injury Rate: Calculated as the number of total recordable injuries per 1,000,000 work hours.

JAPEX Integrated Report 2022 50

JAPEX’s Vision

HSE as Our Culture HSE

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Water Resources

Pollution Prevention

https://www.japex.co.jp/en/sustainability/environment/water/

https://www.japex.co.jp/en/sustainability/environment/pollution/

HSE Management System

Environmental Risk Management

To comprehensively achieve the goals set out in the JAPEX HSE

career stage education such as for middle-level employees

We are working to voluntarily assess various environmental risks

policy, we have been implementing our unique HSE management

and new managers, professional education and training to(pollution, water resources, biodiversity, climate change, etc.)

system (HSE-MS) since 2014. We are applying it to businesses inprevent incidents for specific operational employees, and visitor

that arise in the course of our business activities and implement

Japan and overseas where the JAPEX Group serves as an operator.

education for contractors when they conduct operations on

countermeasures against them, on top of ensuring compliance

The HSE-MS sets out promotion systems, risk assessment

the premises of the Company or its locations for the first time.

with laws and regulations.

methods, targets, education, operation management, audits, andFurthermore, we conduct an annual questionnaire survey of all

Reference Climate Change Response P.47 ➡︎review methods by management. The HSE Department of theofficers and employees regarding their level of HSE awareness■ Water Resource Management

Head Office handles company-wide control. We also establishedand use the analysis results for the enhancement of education

JAPEX appropriately disposes of the water resources it uses.

relevant departments in each district office and subsidiaries toand awareness raising.

After purifying water used in the production of oil and natural gas,

In fiscal 2021, we redefined the necessary experience andas well as pit water collected in the course of mining, to meet

qualification requirements to improve the development of HSE

wastewater standards set by laws and regulations, we either

and labor union president, conducts an overall review of the HSE-

specialists, formulated a policy and plan for the assignment of

expel it into public waterways or inject it back underground.

MS and deliberates important matters and basic policies related to

HSE officers, and examined career paths for HSE personnel,

promote HSE. The HSSE Committee, which is chaired by the
executive in charge of the HSE Dept. and attended by the President

HSSE, which adds the ‘S’ of Security to HSE.

among others.

At our domestic operation locations, we strive to use water
more effectively by promoting the recycling and reuse of water■ Process Safety

resources used as a coolant in production facilities and water

Directors.

Assuring the process safety of production facilities is very

used as boiler water.

■ Identification of and Countermeasures against HSE Risks

important to prevent major accidents, such as explosions. In

To further strengthen water resource management, weTo reduce HSE risks, we a conduct risk assessment andJapan, there has been an increase in production equipment

started a periodic assessment of water risk in areas where theimplement necessary countermeasures to address high risks.

that is decades old, and safety management at these kinds of

JAPEX Group serves as an operator of the development andFirst, hazard sources are identified, and the possible risks fromlocations has become an issue.

production locations in fiscal 2021, using the water risk mapping

The status of HSE activities is reported annually to the Board of

those hazard sources are assessed in six levels of likelihood of

While JAPEX has fields that have continued oil production

tool (Aqueduct) of the World Resources Institute (WRI). The

occurrence and five levels of severity in the event of occurrence.

for over 60 years in Japan, there are also locations like theresults confirmed that none of our operation locations are underThe risk level is categorized as H (high), M (medium), or L (low)Soma LNG Terminal that have only been operational for a few

high water stress.

according to the assessment results. For risks categorized

years. Depending on the location, there are big differences in■ Air Pollution Prevention

as H and M, risk reduction measures are considered andoperational years and business characteristics. Therefore, we are

We are working to assess, manage, and limit emissions of theimplemented, and the process is repeated until the level isworking to set up comprehensive and systematic process safety

air pollutants VOCs (volatile organic compounds), NOx (nitrogen

reduced to L. In addition, information is shared among districtin line with the status of each location.

oxide) and SOx (sulfur oxide).

offices and countermeasures are rolled out at each location.

In fiscal 2021, we provided basic education on risk

We have been participating in a voluntary action plan toassessment (HAZOP*, etc.) for technicians by holding workshops

reduce domestic VOCs emissions as a member of the Japan

prevent accidents, disasters, and environmental pollution.

24 times. In addition, dedicated software was introduced to

Natural Gas Association since fiscal 2005. As part of our ongoing■ HSE Education

improve the efficiency and accuracy of risk assessment and todrive to reduce VOC emissions, we are working to seal crude oil

We established various HSE education programs aligned withensure that the results are passed on to the next generation.

storage tanks better and incinerate VOCs that would otherwise* HAZOP: Hazard and Operability Studies

be emitted from production facilities. Fiscal 2021 VOC emissions

We review the list of hazard sources and risks every year todifferent purposes under the HSE-MS and conduct them at
each location. These include basic education for all employees,

totaled 956 tons, a year-on-year decrease of 419 tons.
JAPEX Integrated Report 2022 51

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Being a Good Neighbor Relationship with Stakeholders
Basic Concept
JAPEX believes that in order to continue our business activities in a safe and stable manner, it is important to accurately
understand social demands and build relationships of trust with our stakeholders. We are committed to building good
relationships with our stakeholders through vario.us contribution activities with respect for the cultures and customs of
our operating regions in Japan and overseas, as well as through constructive dialogue and provision of information.

Relationship with Stakeholders

https://www.japex.co.jp/en/sustainability/management/stakeholders/

Relationship with Stakeholders
JAPEX continuously engages in dialogue with our stakeholders to gain their understanding and cooperation in our business activities.
We also aim to contribute to the revitalization and development of local communities by responding to the expectations and requests
from various stakeholders.
Stakeholders

Relationship with stakeholders

Main means of communication

Clients•Stable supply of energy•Product safety and quality control

Shareholders andinvestors•Timely and accurate disclosure•Appropriate return of profits

Local communities•Social contribution activities•Consideration for living environment•Contribution to local economies•Communication through marketing activities•Provision of product information•General meeting of shareholders•Financial results briefing and management policy and strategy briefing•One-on-one meetings with institutional investors and analysts•Briefings for individual investors•Disclosure through integrated reports and websites•Dialogues with local communities in operating regions in Japan and overseas•Tours of our facilities •Regular meetings with indigenous groups•Participation in, support for, and sponsorship of local events•Social contribution activities and volunteer activities•Various meetings and briefings on the progress of projects•Reports on environmental impact

Oil- and gas-producing
countries

Business partners•Technological support•Incident prevention•Formulation and operation of business Dialogue between Management and Employees
We hold a townhall meeting (JAPEX company-wide dialogue
meeting) every year as an opportunity to conduct dialogues that
foster direct communication from management to employees
regarding our management policies and vision of the future. We also
hold skull sessions conducted in small groups consisting of several
officers and employees. Themes for the sessions are solicitedfrom attending employees. At the session, they lively exchange
opinions on various themes, including decarbonization, renewableenergy, investment evaluation, human resource development, andDX. We will continue to work on creating opportunities for dialogue
between management and employees so that such opportunities
will help create an open working environment and act as a catalyst
to bring them together to work to instill our Corporate Vision as wellas to achieve goals set forth in management plans.

plans for each project•Workshops, meetings, and briefings related to operations and technologies•Checking and proposal of improvements •Close communication about our businessfor business activities in each projectTransaction partners

Employees•Fair transactions•HSE awareness•Occupational health and safety•Appropriate treatment•Creation of a good working environment•Human resource development•Consultation between labor andmanagement•Disclosure of the CSR procurement policy and CSR procurement guidelines•HSE management based on the contractor HSE management guidelines•Provision of information through in-house intranet and in-house journal•Training and seminars•Townhall meetings and skull sessions between management and employees•Employee awareness survey•Regular meetings with the labor union•Communication time program for remote work

Skull session

JAPEX Integrated Report 2022 52

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

The Employer of Choice Human Resource Development and Diversity
Basic Concept
JAPEX recruits and promotes diverse human resources regardless of gender or nationality. We are also developing
a corporate and organizational culture where all employees can demonstrate their abilities, improving the working
environment, and reviewing our personnel system. In addition, we are working on diversity, equity, and inclusion,
career development, and human resource development to raise the awareness among individual employees.

Human Resource Development

https://www.japex.co.jp/en/sustainability/social/hrdevelopment/

Human Resource Development
 Policies and Career Development

 Education Programs Education Courses by Specialists

JAPEX supports the self-realization of individual employees
through career development. For that purpose, the Career
Development System and education programs are provided
to them for the effective formation and improvement of
required abilities and skills. The Career Development Systemdefines the three human resource types needed to carry out
our business, and the career development guidelines were
established as a guide for acquiring skills and experience
required for each human resource type. In addition, employees
can choose courses tailored to their career goals and proceedwith necessary experience and learning while checking theirstatus and goals through an annual career development
meeting with their managers.

Employees can have opportunities to participate in thecompany-wide training, depending on their seniority and role,
which will help them develop their career. We conduct career
design training for voluntarily setting their future career goals;
career stage training for raising the awareness of employees’roles at each position; and business skills training for gaining
necessary business knowledge and skills, such as logicalthinking and better presentations. Employees can also use ane-learning system that allows them to choose courses related
to new fields such as IT skills as well as basic business skills.
In addition, opportunities for overseas study and training(practical training at our overseas offices, dispatch toeducational institutions in Europe and the United States) areprovided in order to develop human resources responsible foroverseas related businesses. At the same time, we implement
systematic education programs for employees, from newhires to middle management, such as overseas businessskill courses with the aim of enhancing employees’ project
management capabilities and commercial skills. Furthermore,
we conduct the next-generation management personnel
development program, an education program for selected
employees to develop human resources responsible for the
next generation with a view to future business development.

We certify Specialists and Senior Specialists in administrative
and technical fields. These certified individuals provide courses
on basic knowledge and skills in their specialized fields forall employees every year. In addition, for administrative andtechnical employees with different specialization, the courses
are not limited to basic items related to the Company's
business. Through the courses, we help such employees
deepen their understanding of the latest topics so thatthey can think about their performance of regular work anddevelopment of future career.
We also conduct advanced training provided by specialists
in specific departments to facilitate follow-up for younger
employees. Such training helps raise the level of knowledge
and skills of employees in the entire department and develop
individual employees.

Career Development System
Human resource categories(three types of human resources)

Career development courses

Global leaders who can be responsible
for strategy formulation and businesspromotion• Business leaders who can manage
function-specific organizations•Management course
Gaining and enhancing
management capabilities
Professional course
Enhancing specializationand gaining highly
specialized capabilities

Advanced specialists who can contributeto businesses through expertise in
specialized fields•

JAPEX Integrated Report 2022 53

JAPEX’s Vision

Strategy

Value Creation through Business

The Employer of Choice Human Resource Development and Diversity

Initiatives to Support Value Creation

Financial and Other Information

Diversity, Equity & Inclusion

https://www.japex.co.jp/en/sustainability/social/diversity/

Diversity, Equity & Inclusion
 Policy
JAPEX established the JAPEX Diversity, Equity & Inclusion(DE&I) Policy in December 2021. This policy is a revision of
the JAPEX Diversity Policy, which was established in 2016 andhas been promoted since then, to incorporate the concepts ofequity and inclusion in light of recent changes in the externaland our business environment.
In order to respond to changes in the business environment
and achieve further growth as a comprehensive energy
company, we regard the promotion of DE&I as an importantmanagement issue, and aim to strengthen our corporate
competitiveness and achieve sustainable development. To thisend, we enable our diverse employees to create new value by
encouraging each and every one to play their active role andgrow their careers 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 these characteristics anddifferences, we will realize an organizational culture in which all
employees can be productive and active.
Direction of Initiatives•

Foster an organizational culture that makes the most of diversity•

Promote the activities of diverse human resources•

Create an environment that respects diversity

DE&I-related Targets

Number and Percentage of Female Managers
Number of female managers (left axis)

Number of female managers

25 or more by the end of FY2025

Percentage of female
new-graduates hired
Percentage of mid-career hires
in management positions
Percentage of mid-career hires
to total hires
Percentage of male employees
taking childcare leave

30% or more every year
Maintain 20% or more until the endof FY2025

(%)

25

10

20

15

16

50% or more every year
80% or more by the end of FY2025

Percentage of female managers (right axis)(People)

10

5.0

17

17

19

19

5.9

6.0

8

6

5.2

5.2

5

4

2

 Major Initiatives
0

Foster anorganizational
culture that makes
the most of diversity•Unconscious bias training•Psychological safety training•Harassment training

Promote theactivities ofdiverse humanresources

Efforts to recruit women to management
positions•Training for selected employees•Individual interviews for management candidates
Career development support•Career training (by age group)

Create anenvironment that
respects diversity

Creating a good working environment(see p.55  for details)

 Efforts to Recruit Women to Management Positions
As part of our efforts to promote DE&I, we secure excellent
human resources regardless of gender and promote themto positions with responsibilities. To promote women’s
participation and career advancement, we provide unconscious
bias training and conduct individual interviews with female
employees in pre-management positions. We also haveintroduced a system to support female employees in continuing
their careers and career advancement by allowing them todemonstrate their inherent potential without being affectedby various life events. In addition, we are working to improve
environments to enable female employees to thrive as
independent professionals and continue to grow without fear ofchange.

0

2017

2018

2019

2020

2021

(FY)

Percentage of female new-graduates hired
(%)

40

36.4

35.3

38.5

33.3

30

20

10

0.0
0

2017

2018

2019

2020

2021

(FY)

* Data as of April* Only two female graduates were hired for electrical jobs in FY2018.

Percentage of Mid-career Hires(%)

50

Percentage of mid-career hires in management positions (left axis)
Percentage of mid-career hires to total hires (right axis)

83.3

40

10

80

56.7

30

20

(%)

100

16.7
24.1

17.5

17.0

2018

2019

63.8

20.1

56.4

60

24.5

40

20

0

0

2017

2020

2021

(FY)

JAPEX Integrated Report 2022 54

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

The Employer of Choice Health Management and Good Working Environment
Basic Concept
JAPEX practices health management based on the idea that consideration for the health of employees contributes to
the growth and sustainability of the company. In addition, JAPEX is working to ensure a good work-life balance and tocreate a working environment where employees who have restrictions on working hours or locations due to childcare,
caregiving, or disabilities can also play an active role.

Health Management

Good Working Environment Promotion System

 Work-life Balance

JAPEX has established a promotion system managed by
the President to practice health management. Based on the
JAPEX Group Code of Ethics and Conduct, the JAPEX HealthManagement Declaration, and the JAPEX HSE Policy, we workin cooperation with the health insurance association and thelabor union to support employees in maintaining and promoting
their health primarily by preventing industrial accidents,
creating a good working environment, respecting the diversity
in values, and preventing harassment.

JAPEX is reviewing our systems and introducing new systems
to respect the diversity in employees and realize an autonomousand flexible working style for each employee. We are working
to create a good working environment where diverse humanresources can play an active role. Our efforts include creating
an environment that allows flexible working styles by combining
work at office and work from home and promoting the active useof childcare and caregiving systems.
We are also encouraging employees to take paid leave tohelp them get enough rest so as to increase their productivity.
We set recommended days for taking annual paid leave andencourage employees to take consecutive summer holidays. In
fiscal 2021, the rate of paid leave taken was 81.5%, achieving
the target of 75%. In addition, we aim to achieve the target of
80% or more of male employees taking childcare leave by theend of fiscal 2025. In fiscal 2021, the percentage exceeded 75%(average of 58 days of paid leave taken), showing progress in thetaking of childcare leave. We will continue to work on improving
the working environment to enhance work-life balance.

 Initiatives that Help Promote Employee HealthAs for mental health, we carry out annual stress check tests
for all employees. We recommend high-stress individuals for
consultation with an industrial physician and provide them withperiodic interviews with occupational health staff. We provide
support for those with mental health problems in balancing
work and treatment, as well as support for those on leave toreturn to work.
To prevent lifestyle-related diseases, we use a healthpromotion app to help employees voluntarily monitor theirhealth status to improve their lifestyles and conduct healthsurveys for all employees. Based on the survey results, we set
targets for preventing lifestyle-related diseases and reducing
the smoking rate in CSR action plans. To achieve these targets,
we took such measures as walking and dieting campaigns
as well as health and smoking cessation classes lectured byindustrial physicians.

Main Working Systems Introduced by JAPEX• Flextime system (no core time)• Work-from-home system• Setting of recommended days for taking annual paid leave and encouragement to takeconsecutive summer holidays• Maternity leave for spouse• Days off for child nursing care and shortened working hours for childcare (until the childenters the fourth grade of elementary school)• Support for childcare costs for sick children and business trips• Support for childcare costs for employees returning to full-time work after childcare leave• Partial paid leave during childcare leave• Unpaid leave when an employee’s spouse is transferred overseas

Health Management

https://www.japex.co.jp/en/sustainability/social/healthmgmt/
Good Working Environment

https://www.japex.co.jp/en/sustainability/social/workenvironment/

Rate of Paid Leave Taken
(%)

100

80

70.3

60

74.1

77.4

73.3

2019

2020

81.5

40

20

0

2017

2018

2021

(FY)

Percentage of Employees Taking Childcare Leave by Gender
Male

(%)

100

Female

100

100

100

100

100
75.6

80

60

40

20

44.1

45.3

2019

2020

28.9
18.6

0

2017

2018

2021

(FY)

JAPEX Integrated Report 2022 55

Financial and
Other
Information
INDEX
Financial Highlights....................................... 57
Non-Financial Highlights............................... 58
External Evaluation........................................ 59
Glossary.......................................................... 60
Corporate Data............................................... 61

JAPEX Integrated Report 2022 56

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Financial Highlights(Fiscal years ended March 31)

2012/3

2013/3

2014/3

2015/3

2016/32017/3

2018/3

2019/32020/32021/32022/3112.4378.93

114.6781.71

110.51
99.31

96.48
106.2351.48
121.0645.60
108.5356.20
111.6771.94
110.3568.11
109.1542.91
105.8673.28
111.20230,638
174,359
7,805
33,426
15,045
22,15917,02746,042
37,172(13,950)
9,856
99,803231,086
172,075
13,08632,017
13,90628,082
1 (865)

43,04634,254(14,836)(7,177)
112,639

276,588
210,460
9,800
31,692
24,63443,88929,01553,90545,2264
5 (131,600)

71,680102,830

304,911
234,649
4,489
33,62532,146
54,83929,56761,96378,666
7 (63,031)

18,475
142,657

240,302
193,022
6,516
32,426
8,336
4,652
2,090
31,20057,659(125,771)
54,816
126,570

207,130
174,957
1,512
29,975
685
2,222
3,443
21,88743,672(84,686)
18,360103,630

230,629
191,366
1,324
29,1738,764
3,828
8 (30,959)
33,211
52,881(54,218)(1,196)99,892

267,980
233,133788
31,743
2,313
12,523
14,77041,73630,970(13,969)(15,493)
100,633

318,822271,780893
31,864
14,28332,635
26,81558,29669,895(18,701)(13,743)
138,259

240,078
203,543989
31,352
4,192
10,001
12 (2,725)

37,15043,263(6,453)(15,626)
157,963

249,140
199,237359
29,73419,80943,67413 (30,988)
57,391(1,052)52,067(70,939)
144,513532,890406,773
26,19882,165525,172
403,625
24,197
77,325663,038
495,915
21,636
98,345736,862
540,647
20,726
121,827

707,601495,317130,030
163,575

746,739
510,609
141,903
176,012699,536459,255
135,959
170,193655,288
450,156
127,715
151,726

627,132
440,157
118,774
140,848624,786
434,492
50,180118,710

471,941
402,770510
6,156

297.924.4
1.8
6,869.27
40.00(15.14)(0.2)
1.8
6,691.58
40.00

507.687.2
1.8
7,389.82
50.00

517.356.7
2.0
8,055.59
50.00

36.58
0.5
5.2
7,366.40
50.00

60.24
0.8
8.0
7,655.26
15.00(541.70)(7.2)
5.1
7,438.23
20.00

258.44
3.5
3.6
7,287.32
40.00

469.186.5
2.4
7,046.18
50.00(47.73)(0.7)
3.2
7,011.36
50.00(545.64)(8.0)
0.1
6,679.85
50.00

Natural gas
Crude oil*4
Total

22.8
15.8
38.6

23.3
13.3
36.6

26.4
6 21.8

48.3

32.3
42.1
74.4

34.0
39.7
73.7

33.7
38.3
72.0

31.2
29.5
60.7

28.1
10 33.4

61.5

26.6
49.6
76.2

25.3
36.3
61.7

22.4
36.1
58.5

Domestic
Overseas
Total

185
38

2 147

3 160


112
5 193


110
203

94
255

74
277

73
9 229


64
11 323


58
296

51
266

54
14 105


223

307

305

313

349

352

302

387

355

317

159

Crude oil CIF price (JCC)*1 (USD/bbl)
Exchange rate*1 (JPY/USD)For Fiscal Year (Millions of yen)
Net sales
Cost of sales
Exploration expenses
Selling, general and administrative expenses
Operating profit
Ordinary profit
Profit (loss) attributable to owners of parent
EBITDANet cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of period
At Fiscal Year-end (Millions of yen)
Total assets
Net assets
Long-term borrowings
Interest-bearing debt
Financial Ratios
Basic earnings (loss) per share (Yen)
Return on Equity (%)
Debt*3-to-EBITDA*2 ratio (Times)
Net assets per share (Yen)Annual dividends per share (Yen)
Production Volume in the Fiscal Year (daily) (Thousand boe/d)
Production volume
Proved Reserve Volume at Fiscal Year-end (Millions of boe)
Proved reserves

Crude oil CIF price (JCC) (left axis)
(USD/bbl)(Millions of yen)120

40,000100

20,00080

060(20,000)Profit (loss) attributable to ownersof parent (right axis)*1 Domestic sales price of crude oil referring to crude oil (CIF) price (JCC) andits conversion exchange rate
*2 EBITDA is the total of operating profit, depreciation, and interest and dividends received based on investment cash flow statement.
*3 Interest-bearing debt includes lease obligations, retirement benefit liabilities, and contingent liabilities.
*4 Figures for crude oil include bitumen. These figures include production
volumes of equity-method associates.
Conversion Factors and Units:
Crude oil 1 kL = 6.29 bbl
Crude oil 1 kL = Natural gas 1,033.1 m³
boe: barrels of oil equivalentboe/d: barrels of oil equivalent per day(40,000)

40
1 Impairment loss related to the Yufutsu Oil and Gas Field2D ownward revision of reserves upon evaluation of the

Yufutsu Oil and Gas Field
3 Decision to invest in development of Canadian Oil Sands
4 Investment in development of Canadian Oil Sands Project
5 Participation in Canadian Shale Gas Project

6 Commencement of commercial production in Iraq Garraf Oil Field
7 Commencement of construction of Soma LNG Terminal
8 Impairment loss due to decision to end commercialization of Canadian LNG Project
9 Decision to end commercialization of Canadian LNG Project
10 Achievement of stable production of 20,000 barrels/d in Canadian Oil Sands Project
11 Decision on additional development in Iraq Garraf Oil Field

12 Impairment loss related to business assets of oil and gas
fields in Japan

13 Extraordinary losses resulting from the end of ourparticipation in two projects in Canada

14 End of our participation in two projects in CanadaJAPEX Integrated Report 2022 57

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Non-Financial Highlights(Fiscal years ended March 31)

2015/3

2016/32017/3

2018/3

2019/32020/32021/32022/3

Domestic
Overseas
Total (Domestic + Overseas)

244

231

244

231

241
／
241

383
205
589

319
481
800

284
582
866

268
548
816

242
379
620

Domestic
Overseas
Total (Domestic + Overseas)

2,516

2,453

2,516

2,374
／
2,374

2,610
3,815
6,425

2,873
9,082
11,9552,971
10,764
13,734

3,102
10,936
14,0383,052
7,459
10,511

Domestic
Overseas
Total (Domestic + Overseas)

722

699

708

722

699

708

946
200
1,146

806
406
1,212

943
201
1,144

871
293
1,164

45,524
166
45,690

Domestic
Overseas
Total (Domestic + Overseas)

984

982

992

984

982

992

1,250
140
1,390

1,081
260
1,341

1,212
282
1,494

1,607
210
1,816

46,566
121
46,687Frequency rate (mining field workers)*6
Severity rate (mining field workers)*7
Fatal Accident Rate (FAR)*8
Lost Time Injury Frequency (LTIF)*9
Total Recordable Injury Rate (TRIR)*10
Fatal Accident Rate (FAR)*8
Lost Time Injury Frequency (LTIF)*9
Total Recordable Injury Rate (TRIR)*10

1.02
0.03

1.15
0.02

3.53
0.18

0.00
0.00

0.00
0.00
0.00

Consolidated
Non-consolidated
Non-consolidated
Non-consolidated
Non-consolidated
Non-consolidated
Non-consolidated
Non-consolidated Average days of paid leave taken (Days)
Average rate of paid leave taken (%)
Non-consolidated Percentage of male employees taking childcare leave (%)
Percentage of female employees taking childcare leave (%)
Percentage of employees returning to work after childcare leave (%)*11
Retention rate after childcare leave (%)*12
Number of employees taking caregiver leave (Persons)
Number of employees taking time off for caregivers (Persons)

1,818
886
17
0.9
17.6
3.6
2.0
12.9
66.5
3.2
100
100
100
0
6

1,847
902
20
0.9
16.6
4.5
2.2
13.8
72.0
2.4
100
100
100
0
11

0.00
0.00
1.46
1,825
897
9
1.7
17.2
4.9
2.0
13.6
70.5
21.1
100
100
100
0
12

／
0.00
0.00
5.50
1,788
920
7
1.8
17.3
5.0
2.0
13.5
70.3
18.6
100
100
100
0
24

0.00
0.00
0.00
0.00
1.46
0.00
0.00
7.94
1,739
919
17
2.0
17.1
5.2
2.6
14.7
77.4
44.1
100
100
100
0
12

0.00
0.00
0.00
0.29
0.58
0.00
2.42
7.25
1,780
937
30
2.0
16.6
5.9
2.8
14.0
73.3
45.3
100
100
100
1
13

0.00
0.00
0.00
0.00
0.88
0.00
0.00
0.00
1,634
965
31
3.2
16.0
6.0
2.6
15.4
81.5
75.6
100
100
100
1
20

Environment*1
Greenhouse gas emissions (1,000 ton-CO2)(Scope1+Scope2)

Energy consumption (TJ)

Water withdrawal (1,000 kL)*2

Waste discharge (1,000 kL)*2

Society
Occupational health and safety

Domestic*3
Domestic*4

Overseas*5

Number of employees (Persons)
Number of mid-career hires (Persons)Turnover rate (voluntary) (%)
Average length of service (Years)
Percentage of female managers (%)
Employment rate of people with disabilities (%)
Annual paid leave
Childcare and caregiver leave*1

Scope of non-financial data
2015/3–2017/3: JAPEX and Japex Offshore Ltd.
2018/3–2020/3: JAPEX and its 12 consolidated subsidiaries
Domestic: Japex Offshore Ltd.; Akita Natural Gas Pipeline Co., Ltd.; SK Engineering Co., Ltd.; JAPEX SKS Corporation; North Japan Oil Co., Ltd.; Shirone
Gas Co., Ltd.; Japex Pipeline Ltd.; JGI, Inc.; Geophysical Surveying Co., Ltd.; North Japan Security Service Co., Ltd.; and Japex Energy Co., Ltd.
Overseas: Japan Canada Oil Sands Limited (data collected from 2018/3)
2021/3–: JAPEX and its 13 consolidated subsidiaries (added GEOSYS Inc. to the scope of “Domestic” above)	Japan Canada Oil Sands Limited is based on data until the end of the project in August 2021.
*2 Changed the bases for measuring water withdrawal and waste discharge from 2022/3.
*3 Scope of report: JAPEX and Japex Offshore Ltd.
*4 Scope of report: JAPEX and Japex Offshore Ltd. and its contractors*5 Scope of report: Japan Canada Oil Sands Limited and its contractors*6 Frequency rate = (Number of fatalities and injuries caused by accidents / Number of hours worked) x 1,000,000*7 Severity rate = (Number of days of work lost / Number of hours worked) x 1,000

2,453

0.00
0.00
5.13
1,741
904
10
2.7
17.9
5.2
2.8
14.3
74.1
28.9
100
100
100
0
19

*8 Fatal Accident Rate: Calculated as the number of fatal accidents per 100,000,000 work hours.
*9 Lost Time Injury Frequency: Calculated as the number of lost time injuries per 1,000,000 work hours.
*10 Total Recordable Injury Rate: Calculated as the number of total recordable injuries per 1,000,000 work hours.
*11	Percentage of employees returning to work after childcare leave = (Number of employees returning to work after taking childcare leave during the current
fiscal year / Number of employees expected to return to work during the current fiscal year after taking childcare leave) × 100*12	Retention rate after childcare leave = (Out of those returning to work in the previous fiscal year after taking childcare leave, Number of
employees who remained employed as of March 31 of the current fiscal year / Number of employees returning to work after taking childcare
leave in the previous fiscal year) × 100
ESG Performance Data

https://www.japex.co.jp/en/sustainability/management/esgdata/
Third-Party Assurance of Data
To ensure the reliability of our disclosed information, JAPEX has obtained independent third-party assurance for certain data accessible in “ESG Performance Data” on our website.

JAPEX Integrated Report 2022 58

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

External Evaluation
Moody’s:
Credit Rating

Baa1 (Stable)

ESG Indices of which JAPEX is a Constituent
FTSE Blossom Japan Index
This is a general ESG index that reflects the performance ofJapanese companies that demonstrate strong ESG practices,which are evaluated using the ESG rating scheme developed
by FTSE Russell. The index is one of the ESG indices adopted
by the General Pension Investment Fund (GPIF).

FTSE Blossom Japan Sector Relative Index
This is a general ESG index that reflects the performance ofJapanese companies that demonstrate relatively strong ESG
practices in each sector. Companies are evaluated from threeperspectives: ESG rating by FTSE Russell, GHG emissions
per unit of net sales, and management attitude toward
climate-change risks and opportunities. The index is one of
the ESG indices adopted by GPIF.

S&P/JPX Carbon Efficient Index
This is an index developed by S&P Dow Jones Indices LLC,
and the weighting of its components is determined basedon their status of environmental information disclosure andcarbon efficiency (carbon emissions per unit of net sales).
The index is one of the ESG indices adopted by GPIF.

MSCI Japan Empowering Women Index (WIN)This is an index developed by MSCI Inc. to select companies withhigher Gender Diversity Score, which is calculated from multiple
perspectives based on data related to female employment as
disclosed under the Act on Promotion of Women’s Participation
and Advancement in the Workplace, from each sector. The index
is one of the ESG indices adopted by GPIF.
※MSCI ESG Indexes
THE INCLUSION OF Japan Petroleum Exploration Co., Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICEMARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Japan Petroleum
Exploration Co., Ltd. BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS ORSERVICE MARKS OF MSCI OR ITS AFFILIATES.

Rating & Investment Information(long-term rating):

A+ (Stable)

Rating & Investment Information(short-term rating):

a-1

Evaluation for Sustainability
CDP
CDP is a UK-based non-profit organization that works
with institutional investors around the world to encouragecompanies to disclose climate change and otherenvironmental information. CDP also publishes its scoringdate to the world. It is one of the key indicators to measure a
company's commitment to the environment. JAPEX obtaineda B rating for its response to the CDP Climate Change
Questionnaire.
Health & Productivity Management Outstanding
Organizations
JAPEX has been certified as one of the Health & Productivity
Management Outstanding Organizations (Large Enterprise
Category) for the sixth year in a row form 2017 under the
Certified Health & Productivity Management Outstanding
Organizations Recognition Program, in which companies
that practice health and productivity management arecommended by the Ministry of Economy, Trade and Industry
and the Nippon Kenko Kaigi.
“Kurumin” certification
In August 2018, JAPEX obtained the Next-Generation
Certification Mark (nicknamed “Kurumin”) certification fromthe Tokyo Labor Bureau of the Ministry of Health, Labour andWelfare as a childcare support company that balances workand childcare according to the action plan (from April 2016 to
March 2018) based on the Act on Advancement of Measures
to Support Raising Next-Generation Children.
“Eruboshi” certification
In February 2021, JAPEX acquired the “Eruboshi”
certification mark (third level) from the Tokyo Labor Bureau of
the Ministry of Health, Labor and Welfare, based on the Act
on Promotion of Women’s Participation and Advancement in
the Workplace, as a company with excellent implementationof initiatives to promote women’s activities.

JAPEX Integrated Report 2022 59

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Glossary
Bioenergy with carbon capture and storage (BECCS)

Exploration & Production (E&P)

A term coined to refer to a technology that links CCS and biomass

Businesses that engage in the exploration, development, andTechnologies that contribute to the removal of atmospheric CO2 ,energy. When biomass is burned for energy use, CO2 is emitted,

production of oil and gas.

i.e., carbon dioxide removal (CDR), by separating and capturing CO2

but it is not counted as CO2 emissions because the amount of CO2

Negative emissions technologies (NET)from the atmosphere and storing it underground.

emitted during the entire life cycle of biomass remains the same.

Final investment decision (FID)

If the CO2 from biomass combustion is captured, transported, andIn the context of oil and gas projects, FID often refers to the final

Operator

stored underground, there will be a net reduction in atmospheric CO2.

decision regarding investment before entering the development

A contractual term used in the exploration, development, andphase (i.e., facility design, procurement, and construction).

production of oil and gas via collaboration between multiple

Carbon dioxide capture and storage (CCS)

Prior to FID, relevant parties must meet all requirements, suchpartners; the “operator” is the partner commissioned to handle andCarbon dioxide capture, utilization, and storage (CCUS)

as formulating robust plans for development, marketing, andmanage actual operations. Any partner to the contract other than

CCS technologies separate and capture CO2 from gas emissions

fundraising; signing necessary contracts; obtaining approval fromthe operator is a “non-operator.” Signing a joint operation contract,of electric power plants, factories, and other facilities, then injectauthorities; and securing sufficient human resources.

both the operator and non-operator determine methods for making
operational decisions and raising necessary funds before they launchand store the CO2 in stable underground geological layers. CCUS
technologies effectively use the separated and captured CO2 to

Greenhouse gas (GHG)

enhance oil recovery and for other applications and then store it.

A gas in the atmosphere that absorbs a portion of the infrared

the project.

radiation emitted from the earth’s surface, thereby producing

Reserve replacement ratio (RRR)

Carbon-Neutral LNG (CNL)a greenhouse effect. Water vapor and carbon dioxide (CO2) fall

RRR is the ratio of growth in volume of proved reserves against

CNL is liquified natural gas that is deemed to generate zero CO2 in

into this category. In recent years, the concentration of some of

production volume in a single fiscal year or other specific period ofuse on a global scale by offsetting GHGs generated in the process,these gases in the atmosphere has been increasing, and they aretime. As a numerical indicator for measuring business performancefrom extraction to combustion of natural gas, with CO2 credits

considered to be the main cause of global warming.

in terms of oil and gas exploration and development, RRR is
calculated by dividing growth in the volume of proved reserves bycreated through environmental conservation projects (carbon offset).
Health, safety, and environment (HSE)
Cost, insurance, and freight (CIF)

An acronym for Health, Safety and Environment that refers to

The CIF price for crude oil consists of the Free on Board (FOB) price,

occupational safety, health, and the environment.

the production volume.

insurance, and freight costs to the destination port. The CIF price for
crude oil is the FOB price plus insurance and tanker transportation

Health, safety, security, and environment (HSSE)

costs to the destination port.

HSE with the addition of security, refers to occupational health,safety, security, and the environment.

Enhanced/Improved oil recovery (EOR/IOR)
EOR, also known as tertiary recovery, involves the injection of heat,

Japan Crude Cocktail (JCC)

gaseous carbon dioxide or other chemicals into the reservoir. While

The average price of crude oil imported by Japan and determined inprimary recovery uses natural oil emission energy and secondaryreference to cost, insurance and freight (CIF).

recovery increases the volume of oil recovered by maintaining or
raising pressure in the oil sands layer, EOR alters the physical or

Japan Electric Power Exchange (JEPX)

chemical behavior of the residual crude oil, thereby enhancing oil

Japan Electric Power Exchange mediates spot trades and forward

recovery. IOR is a broader term referring to a range of methods

swaps of electric power.

aimed at improving oil recovery, including secondary recovery.

JAPEX Integrated Report 2022 60

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Corporate Data (As of March 31, 2022)
Corporate Profile

Stock Information

Company Name Japan Petroleum Exploration Co., Ltd (JAPEX)

Exchange Listing

Established April 1, 1970

Common Stock (Authorized) 120,000,000 shares
Common Stock (Issued) 57,154,776 shares

Share Capital ¥14,288,694,000

Number of Shareholders 10,138

Fiscal Year April 1 to March 31 of the following year

Major Shareholders

Number of Employees 1,634 (consolidated basis)

Shareholder name

Main
Exploration, development, production, and sale ofBusinesses oil, natural gas, and other energy resources,
contract service-related operations such as
drilling; development of solar, wind, geothermal,
biomass, and other renewable energy resources;
and supply of electric power(The Articles of Incorporation were partially amended at the 52nd Ordinary
General Meeting of the Shareholders held on June 28, 2022)

Main
Offices

Head
OfficeTokyo Stock Exchange, Prime Market (Securities Code: 1662)

Head Office (see below), Hokkaido, Akita,
Nagaoka, Soma, JAPEX Research Center (Chiba),
Sendai,
Houston, Jakarta, Aberdeen, Dubai, Singapore
SAPIA Tower, 1-7-12 Marunouchi, Chiyoda-ku,
Tokyo
100-0005, Japan
TEL: +81-3-6268-7000 (Administration & Legal Dept.)

Number of Shareholders and Shareholding (%) by Shareholder Type
(People)16,000(%)
40.0

12,000

30.0

8,000

20.0

4,000

10.0

Number of shares Voting rights* (%)

00Minister of Economy, Trade and Industry

19,432,724

34.88

The Master Trust Bank of Japan, Ltd. (Trust Account)

6,548,100

11.75

INPEX CORPORATION

2,852,212

5.12

CEP LUX-ORBIS SICAV

2,269,118

4.07

Custody Bank of Japan, Ltd. (Trust Account)

1,410,400

2.53

NORTHERN TRUST CO. (AVFC) SUB A/C USL NON-TREATY

1,307,830

2.35

80

JFE Engineering Corporation

924,012

1.66

40

STATE STREET BANK AND TRUST COMPANY 505103

898,020

1.61

SSBTC CLIENT OMNIBUS ACCOUNT

739,634

1.33

Mizuho Bank, Ltd.

720,152

1.29*Voting rights are calculated by excluding treasury shares (1,442,982 shares).

2017

2018

Number of shareholders (left axis)
Other domestic corporations

2019

Minister of Economy, Trade and Industry
Individuals and others

2020

2021 (As of March 31)

Foreign investors, etc.
National and local governments

Financial institutions
Securities companies

Total Shareholder Returns (TSR*1) over Five Years*2
(%)
160
120

118.9
96.1

0

2017
JAPEX

147.5
97.7
96.4

74.0
60.9

2018
2019
TOPIX (mining industry)

86.9

109.1

78.2
2020

2021

(As of March 31)(Comparative index: TOPIX (mining industry) Total Return Index by industry)*1 Calculated using the formula set by the Cabinet Office Order for total returns for shareholders,combining capital gains and dividends.
*2 The year-end value from fiscal 2017 onward if invested at the final price as of March 31, 2017.

Organization (As of April 1, 2022)
Board of Directors

Audit & Supervisory Board

President
Executive Committee

Technical Division

Domestic E&P Project Division

Technical Planning & Coordination Dept.

Project Planning & Coordination Dept.

Carbon Neutral Technology Dept.

Exploration & Development Dept.

Subsurface Evaluation Dept.

Operations Dept.

Research Center

Carbon Reduction Project OfficeSecretary Office
Corporate Communication Office
Auditing Dept.
Corporate Strategy Dept.
Administration & Legal Dept.
Human Resources Dept.
Finance & Accounting Dept.
Procurement Dept.
Information Technology Dept.
HSE Dept.
Deal Execution/PMI Support Dept.

Marketing & Sales Division

Gas Supply & Facility Engineering Division

Hokkaido Marketing & Sales OfficeBusiness Planning & Coordination Dept.

Marketing & Sales Planning Dept.

Supply Planning & Coordination Dept.

Marketing & Sales Dept. I

Facility Engineering Dept.

Marketing & Sales Dept. II
Marketing & Sales Dept. III
Sendai Liaison Office

LNG Marketing & Procurement Office
Singapore Branch

Hokkaido District Office
Akita District Office
Nagaoka District OfficeSoma District Office

Overseas Business Division I
Strategic Planning Dept.
Business Development Dept. I
Business Development Dept. II
Business Development Dept. III
Houston Representative Office
Jakarta Representative Office
Aberdeen Representative OfficeDubai Representative Office
Overseas Business Division II
America & Europe Business Dept.
Middle East & Asia Business Dept.
Carbon Neutral Business Dept.
Power Business Division
Power Business Dept.
Renewable Energy Business Dept.
Environmental Business Promotion Dept.
New Business Promotion Dept.
JAPEX Integrated Report 2022 61

JAPEX’s Vision

Strategy

Value Creation through BusinessInitiatives to Support Value Creation

Financial and Other Information

Corporate Data (As of March 31, 2022)
Group Companies
Consolidated Subsidiaries
Share capital (Millions of yen)

Akita Natural Gas Pipeline Co., Ltd.

250

Transportation of natural gas by pipeline in Akita Prefecture

100.00SK ENGINEERING CO., LTD.

300

Provision of contracted well drilling and engineering services

100.00JAPEX SKS Corporation

90

Manufacture and sale of oil products; real estate management; and insurance agency

100.00

North Japan Oil Co., Ltd.

80

Sale of crude oil, recycling of waste oil, contracted transportation of crude oil

100.00

Production, supply, and sale of gas in Tsubame City and Niigata City, Niigata Prefecture

100.00

Pipeline maintenance and management

100.00Conduct of contracted geophysical exploration work and development of geophysical exploration technology

100.00Conduct of contracted geophysical logging and mud-logging work

100.00Shirone Gas Co., Ltd.

3,000

Japex Pipeline Ltd.

80

JGI, Inc.

2,100

Geophysical Surveying Co., Ltd.

446

Japex (U.S.) Corp.

Stake

Percentage of voting rights held

thousand US dollars

53,000Exploration, development, and production of petroleum resources in the United States, and capital participation in the Malaysia LNG project

100.0034,863

Exploration and development of oil sands through Japan Canada Oil Sands Limited

100.00thousand British pounds

110,662

Exploration, development, and production of petroleum resources in the UK North Sea

100.00Industrial safety services, security services

89.42

4

Canada Oil Sands Co., Ltd.*JAPEX UK E&P Ltd.

Main businesses

JAPEX’s stake and percentage of voting rights held (%)

Company nameNorth Japan Security Service Co., Ltd.

30

Japex Offshore Ltd.

5,963

Exploration and development of petroleum resources on the continental shelf of the Sea of Japan

70.61

GEOSYS, Inc.*2

49

Conduct of contracted geophysical exploration work; and sale of geophysical exploration equipment

57.82

Japex Energy Co., Ltd

90

Purchase and sale of LNG, oil products, etc.

90.00

Exploration, development, and production of petroleum resources in the Garraf Oil Field, Iraq

55.00

Japex Garraf Ltd.

20,930（57.82）Equity-method Associates
Share capital (Millions of yen)

TOHOKU NATURAL GAS Co., Inc.

300

Purchase and sale of natural gas in the Tohoku region

45.00

TELNITE CO., LTD.

98

Manufacture and sale of drilling fluid chemicals; and provision of mud services

47.00

Fukushima Gas Power Co., Ltd.

537

Operation and contract work of power generation business using a natural gas power plant

33.30

22,592

Exploration, development, and production of petroleum resources on Sakhalin Island and its land shelf in the Russian Federation

15.29

thousand US dollars

1,000

Exploration, development, and production of petroleum resources in the eastern Java Sea, Republic of Indonesia

25.00

Kangean Energy Indonesia Ltd.* *thousand US dollars

10

Exploration, development, and production of petroleum resources in the eastern Java Sea, Republic of Indonesia—［100.00］

EMP Exploration (Kangean) Ltd.*1, *3

British pounds

100

Exploration, development, and production of petroleum resources in the eastern Java Sea, Republic of Indonesia—［100.00］

Diamond Gas Netherlands B.V.*2

thousand US dollars

5,536

20.00

(20.00)

Sakhalin Oil and Gas Development Co., Ltd.
Energi Mega Pratama Inc.
1,

3

Main businesses

JAPEX’s stake and percentage of voting rights held (%)

Company name

Investment in Malaysia LNG Tiga Sdn Bhd’s businesses, which produce LNG in Malaysia

Stake

Percentage of voting rights heldThree other companies*1 The figure inside the square brackets under “Percentage of voting rights held” represents the percentage held by parties who are closely related to or aligned with the Company and is excluded from the above percentage.
*2 The figure inside the parentheses under “Percentage of voting rights held” represents the percentage of indirectly held voting rights and is included in the above percentage.
*3 The company is considered to be an associate because JAPEX has a substantial influence thereon despite having a stake therein that is less than 20%.
*4 We closed the liquidation of the company on June 24, 2022.

JAPEX Integrated Report 2022 62

10 Year Financial Data

https://www.japex.co.jp/ir/uploads/JAPEX_10yearFinancialData_e.xlsx
Financial Results

https://www.japex.co.jp/en/ir/library/result/
Security Reporthttps://www.japex.co.jp/en/ir/library/report/
Explanatory Materials

https://www.japex.co.jp/en/ir/library/explanatory/
Management Plan

https://www.japex.co.jp/en/ir/management/managementplan/
ESG Data

https://www.japex.co.jp/en/sustainability/management/esgdata/

Inquiries:

Japan Petroleum Exploration Co., Ltd
Corporate Communication Office

TEL: +81-3-6268-7111 FAX: +81-3-6268-7302
https://www.japex.co.jp/en/