Merger,
Challenges

and the FutureMerger, Challenges
and the Future

We had our dreams,
of managing large-scale LNG projects on our own,of maintaining the ties in oil-producing countries and concessions that our predecessors developed through their untiring efforts,of dramatically expanding our gas business.
To make these dreams come true, we chose to merge and integrate our businesses.
Before we realized, our thoughts united as we joined forces to tackle major challenges.
Joining the groundswell, people gathered from around the world under the INPEX flag,achieving great things over these past 10 years.
Our future vision is for INPEX to become a global energy company.

II

III

The road to INPEX’s birth

1984

Minami-Nagaoka
Gas Field andOffshore Iwaki
Gas Field
commenced
production

1965

Minami-Aga Oil
Field commenced
production

1950

Yabase Oil Field(commenced
development deep
zone)

1959

1970

1962

Kubiki Oiland Gas Field
commenced
production

1996 onward

1975

Domestic gas trunk pipeline network
expansion
Reactivation
Enhancement of Tokyo Line and new
project in Venezuela installation to Matsumoto, Iruma andlaunched
Kofu

1992

HigashiKashiwazaki Gas Offshore DR
Field commenced Congo commenced West Bakr Blockcommenced production
production
production

Tokyo Line(gas pipeline)
completed

2003

1980

Ohanet Gas Field commenced
production

2004

2006

Shizuoka Line
completed

Gas field development innortheast Mexico launched byMulti service contract

1941
Teikoku OilCo., Ltd.
founded1984 to 1992
String of oil fields in the Offshore Mahakam Blockcommenced production

1972

1974

Attaka Field
commenced
production

Bekapai Field
commenced
production

1975

Handil Field
commenced
production

Oil and gas fields in various
locations commenced
production
1984:
Tambora Field (oil and gas)
1990:
Tunu and Widuri Fields
1992:
Belida Field

2003

2006

2004

INPEX Holdings,
Inc. foundedInterest in ACG Oil
Fields acquired

1994

Griffin oil fields
commenced
production

2000

Abadi Gas Field and Ichthys GasCondensate Field discovered

2000

Kashagan Field
discovered

Bayu-Undan GasCondensate Field
commenced production

2008

INPEX
CORPORATION
founded

1966

Change in names of INPEXFormer
INPEX
founded

1967

1975

2001

Japex Indonesia, Ltd.

Indonesia Petroleum, Ltd.

INPEX CORPORATION

1966

2004
Japan Oil Development Co., Ltd. became
a wholly owned subsidiary of INPEX

North Sumatra Offshore
Petroleum Exploration
Co., Ltd.

1982

Upper Zakum Oil
Field commenced
production

1985

Umm Al-Dalkh
Field commenced
production

1987

Satah Field
commenced
production

1973

Japan Oil
Development Participation in development of Umm Shaif andCo., Ltd. Lower Zakum Oil Fields through acquisition offoundedIVinterest in ADMA BlockVA note from the Chairman

Greetings from the CEO

Toshiaki Kitamura

Takayuki Ueda

Representative Director & Chairman

Representative Director, President & CEO

October 1, 2018 marked the 10th anniversary of the foundation of INPEX CORPORATION throughthe merger of the former INPEX, Teikoku Oil and INPEX Holdings. I would like to extend my sincere
gratitude to all our customers, shareholders and business partners as well as our directors and employees,
both past and present, and their families for their support and guidance, which have allowed us to reach thisimportant milestone.
The merger also allowed INPEX CORPORATION to be enriched by the addition of numerous employees with diverse backgrounds from organizations like Japan Oil Development Co., Ltd. (JODCO) andthe former Japan National Oil Corporation (JNOC), in addition to the three companies mentioned earlier,turning INPEX CORPORATION into the powerhouse it is today.
The last decade has been a period of turmoil not just for us but for the entire oil and gas industry. In
2008, the year of our foundation, we witnessed a global economic recession precipitated by the collapse of
Lehman Brothers. 2014 saw the beginning of a significant downturn in crude oil prices brought on by the US
shale revolution. But even during these challenging times, INPEX employees collectively strove to improve
efficiencies across the company, which resulted in the strengthening of our business foundations and robust
resilience to oil price fluctuations.
In terms of our projects, the Ichthys LNG Project in Australia commenced production in 2018. The
knowledge and experience we have gained through Ichthys as Japan’s first ever operator of a large-scale LNG
project are invaluable assets that we will draw upon in the planning and execution of the Abadi LNG Projectin Indonesia as well as other future projects, and that will contribute to our long-term growth as a company.
Another significant achievement was the acquisition and extension of oil field concessions offshore
Abu Dhabi in the United Arab Emirates. Over many years, we had been engaged in negotiations with thegovernment and authorities of Abu Dhabi. These negotiations came to fruition as we successfully secured theacquisition and extension of major oil field concessions both onshore and offshore between 2014 and 2018.
Furthermore, our solutions to technical issues concerning crude oil development and production won therecognition of the authorities, leading to our appointment as Asset Leader of the Lower Zakum Oil Field,
a giant offshore oil field. As Asset Leader, we will lead efforts to pursue development activities and further
enhance the oil field’s production capacity.
Meanwhile, in Japan, where we continue to produce stably, we have recently fortified our business
management capabilities by enhancing our natural gas supply infrastructure including facilities such as the
Naoetsu LNG Terminal and the Toyama Line extension of our natural gas trunk pipeline network and significantly expanding our gas supply volume.
I believe that through such proactive initiatives, INPEX has successfully laid the foundations to realize
the business targets laid out in VISION 2040 formulated in May 2018.
I look forward to your continued support.
VI

On the occasion of the 10th anniversary of the foundation of INPEX CORPORATION through themerger of the former INPEX, Teikoku Oil and INPEX Holdings, I would like to sincerely thank all our
stakeholders for their unwavering support and understanding of our challenging endeavors. I would also liketo thank all our current and former employees for their hard work and efforts in laying the foundations of
our company.
Over the last decade, I believe we have navigated a tumultuous period punctuated by volatile oil pricefluctuations in a remarkable manner, leveraging the benefits and advantages of the merger. The publication ofthis archive, which contains corporate highlights and key events from the last 10 years, is intended to remind
us of our beginnings so that we may always be mindful of our roots.
This 10th anniversary and the commencement of production of the Ichthys LNG Project have set a newstage in the journey of our company.
The future is becoming increasingly difficult to predict. However, we will continue to remain true toour roots while striving to grow further as one unified company in a new era without becoming complacent
about our past achievements, in the hope that doing so will bring us progressively closer to realizing our
mission of contributing to the creation of a brighter future for society through the stable supply of energy.
This publication provides a comprehensive outlook of our history and our business strategies, and will
hopefully serve as a medium through which our stakeholders may deepen their understanding of our causes.
I also hope that the publication will provide all directors and employees with a source of pride and motivation to succeed over the coming decades. I sincerely look forward to your continued support.


April 2019

April 2019
VII

Contents
Frontispiece

INPEX launches joint study in preparation for first commercial geothermal power generation project

The road to INPEX’s birth
A note from the Chairman Toshiaki Kitamura Representative Director & Chairman
Greetings from the CEO Takayuki Ueda Representative Director, President & CEO

Ichthys LNG Project finalizes sales agreements covering all LNG to be produced◆2012����������������������������������������������������� 20
Ichthys LNG Project announces financial investment decision (FID)
INPEX acquires stake in Prelude FLNG Project
INPEX acquires stakes in deepwater exploration blocks offshore Sabah, Malaysia
INPEX establishes MEDIUM- TO LONG-TERM VISION◆2013����������������������������������������������������� 23

Part IINPEX commences Mega Solar Joetsu photovoltaic power generation in Joetsu, Niigata

History of company’s predecessors and moves toward company integration ……………………2

Construction begins on LNG tankers to service Ichthys LNG Project

INPEX completes construction of Naoetsu LNG Terminal

Profound changes in the oil exploration project landscape in Japan and overseas◆2014����������������������������������������������������� 25

Two sets of hopes

INPEX awarded extension on Upper Zakum Oil Field concession offshore Abu Dhabi

Former INPEX and Teikoku Oil make stealthy moves toward business integration

INPEX joins Japanese government-sanctioned methane hydrate survey

Integration proceeds under utmost secrecy

INPEX discovers new gas and condensate reservoirs offshore southern Vietnam

Fusion of two companies establishes INPEX Holdings, Inc.
Full integration begins a new journey
A look back on our business integration����������������������������������� 7

Naoki Kuroda, Senior Corporate Advisor
10 years from the merger����������������������������������������� 7

Masatoshi Sugioka, Senior Corporate Advisor

Part IIFirst 10 years after merger
Preface���������������������������������������������������� 8◆2008–09��������������������������������������������������� 10◆2015����������������������������������������������������� 27
Lucius Oil Field in US Gulf of Mexico commences oil production
INPEX awarded ADCO Onshore Concession in Abu Dhabi
INPEX discovers new oil reservoir at Minami-Kuwayama Oil Field, Japan◆2016����������������������������������������������������� 29
Kashagan Oil Field in Kazakh sector of North Caspian Sea commences full-scale production
INPEX completes Toyama Line (natural gas trunk pipeline extension)
INPEX drills Shimane-Yamaguchi Oki exploratory well commissioned by Japanese government◆2017����������������������������������������������������� 31
INPEX discovers oil reservoir at Exploration Block 10 in Iraq

Frade Field offshore Campos, Brazil commences oil production

INPEX commences compressor plant operations at Koshijihara Plant, Minami-Nagaoka Gas Field, Japan

Tangguh LNG Project commences LNG shipment

Production sharing agreement for ACG oil fields in Caspian Sea, Azerbaijan, extended by 25 years

INPEX discontinues oil production at Griffin oil fields offshore Western Australia

Sarulla Geothermal Independent Power Producer Project commences commercial operations◆2010����������������������������������������������������� 13◆2018����������������������������������������������������� 34

INPEX commences oil production at multiple oil fields offshore Western Australia

INPEX acquires exploration licenses in Mexico and Norway

INPEX withdraws from Azadegan development project

Abadi LNG Project enters Pre-FEEDINPEX decommissions offshore Iwaki platform

INPEX appointed asset leader of Lower Zakum Oil Field offshore Abu Dhabi

INPEX formulates Corporate HSE Medium-term Plan

Ichthys LNG Project celebrates operational commencement◆2011����������������������������������������������������� 17
INPEX joins Great East Japan Earthquake relief and recovery efforts

VIII

IX

Supplementary materials
Feature 1

INPEX, bringing forth the bounty of Ichthys��������������������������� 38
Discovery of the Ichthys Gas-condensate Field
Wanting to develop on its own
But the road to development was not easy
Gaining support and beginning the journey
FEED work includes series of thorough investigations
Approvals acquired for FID
Capital increase and project financing

1. Overview, access & management������������������������������������ 66
2. Organizational chart�������������������������������������������� 67
3. Mission and CSR Principles and INPEX Values����������������������������� 68
4. List of senior management’s terms����������������������������������� 70
5. Segment overview��������������������������������������������� 72
6. Trend of business results����������������������������������������� 74

Despite an adverse situation, INPEX secures buyers through ongoing serious dialogue
Arranging the largest ever construction insurance
FID obtained with everyone’s cooperation

Editor’s note:������������������������������������������������� 75

Design and construction work begins around the worldFirst ship sets sail on a new era for INPEX
Epilogue
Project Development Concept
Major construction and instruction works around the world

Feature 2

Bonds of trust with Abu Dhabi lead to a bright future���������������������� 48
Technical strengths a decisive factor in the extension of the Upper Zakum concession
Participating interest in ADCO Onshore Concession acquired through successful bid
Abu Dhabi offshore oil field concessions acquired and extended amid tough competition
Social contribution activities help build trusting relationships

Feature 3

Aiming for greater heights with a more robust gas supply chain��������������� 53
Preparing for the strong demand of natural gas construction of an LNG receiving terminal
Construction of the cherished Naoetsu LNG Terminal
Completion of a major gas supply chain
Cultivating new demand:Construction of the Toyama Pipeline
New business opportunities due to gas deregulation

Part III
Future outlook
1. Interview with Takayuki Ueda, President & CEO����������������������� 58
2. Vision 2040 and the Medium-term Business Plan 2018–2022��������������� 62

X

XI

Part

I

History of company’spredecessors andmoves toward
company integration

2

Profound changes in the oil exploration project
landscape in Japan and overseas
From the end of the 1990s, major petroleum companies(“Oil Majors”) outside Japan began a series of restructurings
through mergers and acquisitions, leaving five key players in
the industry—ExxonMobil, Chevron, BP, Royal Dutch Shell
and Total. Exploration opportunities that could be developed
at low cost became few and far between, and it became necessary for oil companies to boldly pursue and challenge frontier,ultra-deep and so-called unconventional development projects in order to secure new reserves. Taking on such projects
required advanced technical capabilities as well as significant
financial resources. Meanwhile, the economies of China andother emerging countries of Asia were growing rapidly, which
created a continually expanding demand for oil and gas and the
beginnings of international competition for resources.
In Japan, on the other hand, an accumulation of bad
debts from overseas oil exploration projects resulted in upheaval within the Japan National Oil Corporation (JNOC) in
June 1998. This caused a ripple effect that attracted criticism
from all quarters, including the National Diet, about the public
corporation’s management and accounting procedures, projectassessment and management capabilities, and information disclosure, etc. In response, the JNOC Reconstruction Committee was established. Based on the committee’s report a numberof companies involved in national projects, including Arctic
Petroleum Corporation of Japan and Japan China Oil Development Corp., were dissolved. In August 2000, the Ministry of
Economy, Trade and Industry Petroleum Council Basic Policy
Subcommittee published an interim report promoting oil andgas development projects led by the private sector while proposing targeted political support to develop a necessary core industry group to take on this role. With moves to reform special
corporations being a key part of administrative and financial
reforms of the Koizumi Administration, which came to powerin April 2001, cabinet decided in December 2001 to abolish
JNOC. In July 2002, it established the Act Concerning theAbolishment of the Japan National Oil Act and the Metal Mining Agency of Japan Act, and the Act on the Japan Oil, Gas
and Metals National Corporation, Independent Administrative
Agency, which was established as the special purpose vehicle.
In the midst of this upheaval both inside and outside theoil exploration environment, the former INPEX and Teikoku
Oil were continually searching for ways to enhance their corporate infrastructure and achieve sustainable growth.

Part I History of company’s predecessors and moves toward company integration

Two sets of hopes
In joint projects with major petroleum companies andothers, the former INPEX held good resources in oil and gas
fields in East Kalimantan. It also participated in an international consortium that would go on to discover and develop thevast Kashagan Oil Field in Kazakhstan, and conducted othersuccessful businesses to expand its area of operation. However,with little experience as an operator, its greatest wish was tomove into this area to achieve even greater growth.
The company faced a turning point. With its untiring
efforts finally bearing fruit, in its role as exploration operator
in 2000, the company discovered the Ichthys Gas-Condensate
Field in its WA-285-P concession off the coast of West Australia,
and the Abadi Gas Field in its Masela concession in Indonesia.
Full development of these two gas-condensate fields by itself
was expected to guarantee great progress for INPEX. However, because the former INPEX was operating many different
non-operator projects with limited personnel, and was involvedin other projects in Abu Dhabi offshore oil fields, the Kashagan
Oil Field and elsewhere, it found itself too short of human andfinancial resources to manage development and production ofthis new large project as an operator.
It was about this time that Teikoku Oil itself faced theurgent challenge of having to secure new oil and gas reserves aspart of efforts to build up its gas business infrastructure domestically. Because there are only limited areas showing promisein Japan, the company was busy selecting core areas in Latin
America and North Africa for growing its exploration and development business overseas. As resource competition heatedup though, it found itself limited in what it could achieve alone.

Former INPEX and Teikoku Oil make stealthy moves
toward business integration
Since about 2004, when the former INPEX listed publicly, Kunihiko Matsuo, President and CEO of the former
INPEX, and Akira Isono, President and CEO of Teikoku Oil,frequently chatted at monthly meetings of the Japan Petroleum
Development Association. With Mr. Matsuo being appointed
as Chairman of the Association in September 2003, and Mr.
Isono being appointed as its Policy Promotion Committee
Chairman in July 2004, the pair needed to discuss lots of matters in their positions directing the future of the industry, so
it was only natural that they ended up in serious discussionsof the future. As international resource competition started tointensify, they focused their attention on understanding how to
overcome this problem and survive.
At this point, the topic of a business integration between
the former INPEX and Teikoku Oil came up. As each one
learned more about the condition and value of the other’s company, they started to feel that each company would complement the other. On the one hand, the former INPEX held good
assets in many locations, from Asia and Oceania to the Middle
East and Eurasia, and had acquired considerable knowledge
and experience through working relationships with Oil Majors
and the various national oil companies of oil-producing countries. And on the other hand, Teikoku Oil had experience working as an operator in Japan and overseas, and had engineers3with the know-how to put this into practice. Both companies
were also financially sound, and together could create an idealbalanced portfolio without any duplication of operations acrosstheir core overseas regions.
They felt that, in addition to being able to act as operator for development and production of the Ichthys and Abadi
fields, combining the strengths of these two companies would
result in a powerful oil exploration and production company
with the ability to meet international competition on an equal
standing in terms of technologies and finances. Also, they anticipated that connecting LNG from Ichthys and other fields
to the domestic pipeline network in Japan would realize a gas
supply chain model capable of integrated management andoperation, from gas production through to sales. They wereconfident that a marriage of the two companies would createsynergies that were greater than the sum of the two.
At the same time, they were confident that joining forces
would give the two companies the strength to achieve sustainable growth while also making a significant contribution to theimportant mission of creating a stable energy supply for Japan
into the future.
Teikoku Oil also had the DNA to back Mr. Isono’s decision. In the past, Teikoku Oil employed many engineers in
the restoration and management of oil fields in Southeast Asia,with that DNA remaining part of the company even today.
While it is mainly focused on domestic business these days, it
has always maintained a strong desire to become involved sometime in projects overseas.
In December 2004, Mr. Matsuo and Mr. Isono agreed to
begin concrete negotiations toward a business integration.

from each company and meetings with advisors, and utilizing
the chat function of Skype for internal meetings.
In this way, preparations made steady progress until theend of October 2005 when, just prior to the business integration announcement, the companies began briefing shareholders and other stakeholders. As explained above, they felt thedecision would be supported because it was clear that a union
between the two companies would generate great strength, but
a range of circumstances meant that they could not proceed
easily. While senior management of both companies were explaining the integration to stakeholders, Extraordinary Meetings of the Board of Directors of both companies were held on
November 5, 2005. The business integration was decided andannounced on the same day.
However just after the announcement, Nippon Oil

Press conference discussing the business integration
From left: Then President Naoki Kuroda and Chairman Kunihiko Matsuo, INPEXCORPORATION
Then Chairman Akira Isono and President Masatoshi Sugioka, Teikoku Oil Co.,Ltd.

Integration proceeds under utmost secrecy
With the agreement of both presidents, the two companies
embarked on top secret preparations for concrete negotiations.
In January 2005, representatives from both companies secretly met outside the companies to start practical discussions.
Preparations for the integration covered a lot of ground, but
one of the more critical tasks was evaluating the business assetsof each company. Reserving a room adjoining the president’s
office under another project name, the document collection
work proceeded in a nighttime library after confirming employees had gone home for the day. The asset evaluations proceeded under the strictest care, with efforts including always
changing the location for discussions between representatives
4

Part I History of company’s predecessors and moves toward company integration

Corporation (currently JXTG Nippon Oil & Energy Corporation), the largest shareholder of Teikoku Oil, expressed acautious stance toward the integration and the former INPEX
was dragged into discussions. The discussions among Nippon
Oil Corporation, that was considering a business integration
covering upstream, midstream and downstream processes, andTeikoku Oil, that was focused only on upstream business, andthe former INPEX continued for more than a month. Finally,in mid-December, the issue was resolved by agreeing to consider
collaborations on new oil exploration and production projects
when it was considered to be beneficial, while at the same time
respecting the autonomy of each company’s management.

Fusion of two companies establishes INPEX Holdings, Inc.
Approval was obtained at the January 2006 Extraordinary General Meeting of Shareholders and Class Meeting of
Shareholders, and then the two companies jointly established
INPEX Holdings, Inc. in April 2006, with capital of ¥30 billion and Naoki Kuroda as President & CEO. Establishmentof the holding company was just the first step in the process,with the second step being a merger of INPEX Holdings, theformer INPEX and Teikoku Oil, and the final objective being
a full integration.
“I want us all to work together to leverage the good partsof INPEX’s and Teikoku Oil’s company cultures, to fix the parts
that need fixing, to change the parts that need changing, and to
become a great group company with a new company culture. I
want us to develop an attitude that enables positive communication between each other, that enables us to perform our duties through teamwork, and that enables us to move forward asa single outward-looking team,” said Mr. Kuroda to employees
of both companies.
To achieve a successful merger of the companies, not only
was the unwavering resolve of senior management required, but
the persistent effort of everyone from executives to frontline
employees was also required. Above all, although the merger
was a mutual collaboration to operate oil exploration projects, not only were the company histories, corporate culturesand employee makeups significantly different, but the former
INPEX had just added many new employees, immediately prior
to listing on the stock exchange, through transfers from JapanOil Development Co., Ltd. when it was integrated and from
JNOC. Entrusted by Mr. Matsuo and Mr. Isono with steering the merger, Mr. Kuroda identified the urgent challenges

within this environment of boosting morale in light of difficult
targets, and cultivating a sense of unity within the company.
While enforcing the basic policy of no staff reductions throughretrenchments, he launched the company-wide efforts toward
integration.
When INPEX Holdings was established, efforts weremade to actively achieve mutual understanding and information sharing with both management and employees, at thesame time as integrating systems and structures while INPEX
Holdings employees took on duties from both the former
INPEX and Teikoku Oil. In addition, steady efforts were madeto convey the significance of the business integration, which
was to become an internationally competitive growth company, to everyone, including employees in the field. This also
included improving morale when faced with this objective, andcultivating uniform values and awareness. Care was also taken

Listing notice and commemorative shield for INPEX Holdings, Inc.
Listed on the First Section of the Tokyo Stock Exchange on April 3, 2006

Mining-mura kara no Tabi-dachi (New Beginnings from a Mining Village) publication produced to promote mutual understanding between former INPEX,
Teikoku Oil and Japan Oil Development5to obtain the understanding and cooperation of labor unions
at each company.
Preparations required a range of practical work including
designing structures and systems, building human resources
systems, complying with the Japanese SOX Act, and developing internal control systems. In May 2006, the company’s
Mission and CSR Principles were established as policies for implementing the management vision after full integration, andas CSR initiatives for the whole Group. Then in June 2006,
the Health, Safety and Environmental Policy was establishedin accordance with the Mission and CSR Principles as a basic
philosophy. This basic policy was also passed on to the newcompany after the full integration.
With the addition of Teikoku Oil technical experts
through the business integration, there are now 700 experts
across the whole Group. Forming mixed teams, they havealso started working on new exploration projects in Libya andBrazil.
In April 2007, INPEX Holdings accepted its first intakeof new employees to lead the company into the future.

Full integration begins a new journey
In August 2006, Akasaka Biz Tower was selected to housethe new post-integration entity. Then in April 2008, the former
INPEX and Teikoku Oil entered into an agreement to merge
with INPEX Holdings as of October 1, 2008. Approval for themerger was obtained at INPEX Holdings’ June 2008 Annual
General Meeting of Shareholders and Class Meeting of Shareholders, where it was also decided to name the new company
INPEX CORPORATION (INPEX).
Then finally the day arrived. After four years in the making, on October 1, 2008, an international company was bornwith the ability to meet international resource competition
on an equal standing. With involvement in 72 projects in 26
different countries worldwide, it had a tremendous balanced
portfolio of project regions, contract types, work stages (exploration, development and production), and oil and gas withproved reserves and provable reserves of 1.645 billion BOE and2.721 billion BOE respectively as of March 31, 2008.
INPEX established three fundamental strategies: (1) Sustainable expansion of the upstream business, (2) Establishmentof a gas supply chain and proactive expansion of the gas business, and (3) Evolvement into a company that offers diversified
forms of energy. It aims to raise the daily net production level6

A look back on our business integration
Naoki Kuroda, Senior Corporate Advisor

It is now 10 years since our merger in 2008, and I believethat the integration of the two companies has proceeded very
well with many positive outcomes. This is due to the understanding and cooperation of all directors and employees, and I
would like to extend my appreciation to all.
I was appointed as the president of the former INPEX
in 2005 at a time when confidential discussions concerning
the integration were taking place. A year later, I became thepresident of INPEX Holdings and, eventually, the president of
the newly established INPEX CORPORATION following themerger in 2008.
The few years following the integration were a particularly
challenging period for INPEX as several key projects poised toshape the future of the company, including the Ichthys andAbadi LNG Projects as well as the Azadegan Project in Iran,were in critical stages of development at a time when the company was undergoing multiple organizational restructurings.

Prior to the merger, the former INPEX consisted of about
400 employees, a size not nearly sufficient to effectively executesuch mega projects as operator.
Although we could expect to tap into the resources ofjoint venture partners for each project, as well as other external resources available in the market, it was crucial for us toestablish our own groundwork and capabilities as operator. For
this reason, I believe the merger was an essential step for us
to expand and transition from an exploration company intoa world-class E&P company capable of spearheading exploration, development and production operations.
Ten years after the merger,
the Ichthys LNG Project commenced production in 2018.
The current business environment surrounding our industry
is certainly not easy, but I lookforward to seeing INPEX continue to grow and prosper.

Head Office located within Akasaka Biz Tower in Minato-ku, Tokyo

10 years from the merger
up to 800,000 to 1 million barrels by 2020, and to establish afirm position as an upstream company with global competitiveness. As a company with a mission to provide a stable supplyof energy to Japan, INPEX has begun a new journey into the
future.

Part I History of company’s predecessors and moves toward company integration

Masatoshi Sugioka, Senior Corporate Advisor

Looking back over the 10 years since the merger, myheart is filled with emotion as I recall the constant challenges
we faced on a daily basis. There was a genuine excitement emanating throughout the company as we all, in our individual
capacities, pursued our common goal of growing into a globally competitive operator leveraging the combined strengths
and capabilities from the integrated company.
This past decade has beenan opportunity for INPEX todevote itself to learning fromthe world and to give rein togrow further. As a result, wehave scored numerous operational achievements both large
and small, from the worldclass Ichthys LNG Project tothe mature oil fields in Japan. These achievements, regardlessof size and scope, today have come to embody INPEX and allthat it represents.
I am truly grateful for all the hard work put in by ourdirectors and employees until now, and would like to extend tothem my sincere gratitude.
INPEX has built a solid framework as a global E&P company during the last 10 years, but there remains a lot more to
be done. The exploration, development and production of oil
and gas is by nature a global endeavor, and for us to advocate
our rightful position as a global player in the industry, we must
face the challenges involved in applying the mechanisms wehave nurtured on a global scale, not limited to technical fields
but in all disciplines. These are common challenges that werealso faced by our E&P industry peers in their own times.
Let us take this opportunity to celebrate the successfulcommencement of production at the Ichthys LNG Project,which lays the groundwork for the future growth of our company while coinciding with our 10th anniversary. Furthermore,
let us consider Ichthys as a springboard for our further growthand success as a global company.

7

Part

II

First 10 years after merger

Preface

8Part II First 10 years after merger

The current INPEX was created on October 1, 2008. It
has worked hard to drive key projects seamlessly both in Japanand abroad, and to achieve the important goals set during
the business integration, while maximizing the synergies of asmooth integration of the former INPEX and Teikoku Oil.
The greatest of those goals, and the shared dream wasto establish itself as a competitive E&P company, capable ofself-sustained growth on the world stage. To achieve that goal,
we determined to develop our capabilities, experience andhuman resources through materializing the Ichthys and Abadi
projects as the operator.
In this respect, the Ichthys Project is of particular notethroughout the first ten years of the current INPEX. Making
the final investment decision (FID) after overcoming many obstacles, production finally started. The journey was exciting but
also a full of difficulties.
With the LNG plant site unavoidably changed to Darwin, 900 kilometers away from the production facility, work
had proceeded at a steady pace to create development plans,
sign engineering, procurement and construction (EPC) contracts, and obtain environmental approvals and licenses. At thesame time, other work focused on to solidify the company’s
financial position through a capital expansion of ¥500 billion,
raising project financing of ¥2 trillion, and finalizing long-termsales contracts for 8.4 million tons of LNG, after which thelong-anticipated FID was made in January 2012.
Another important goal was to create a stable gas supply
chain by connecting LNG from the company’s Ichthys andother projects to its own gas supply infrastructure in Japan. In
August 2008, just prior to full integration, construction of the
Naoetsu LNG Terminal was decided, with construction of the
Toyama Gas pipeline beginning in April 2012. By connecting
the highly cost-competitive Minami-Nagaoka Gas Field to one
of Japan’s greatest high-pressure pipeline networks stretching
1,400 kilometers, they created an important piece of supply
infrastructure for domestic gas and overseas LNG that enabled
growth and new development of the company’s domestic gas
supply business.
In light of the progress made toward achieving these goals,
INPEX was expected to deliver clear long-term corporate strategy to investors and other stakeholders. As a response, INPEX
announced Medium- to Long-term Vision in May 2012.
This included the basic goals of responsible management
as a global company, enhanced HSE in operations, continuingenhancements to governance, creation of a vibrant organization,

development of global HR, and building of robust financial
structures. It included efforts to bring all areas of business tolevels appropriate for a global company.
It also included a business strategy that clarified threebusiness pillars for INPEX through the 2020s, and detailed agrowth strategy and priority initiatives during development of
the Ichthys Field. Going forward, INPEX management would
progress in line with this Medium- to Long-term Vision.
With this in mind, the company actively focused on upstream businesses, including preparations for development of
the Abadi Field, extension and expansion of the Abu Dhabi
concession, development of the Kashagan Field, expansion of
exploration operator activities, and acquisition of new assets.
In Japan, the company developed the Naoetsu LNG Terminal and Toyama Gas pipeline as part of efforts to expand its
domestic gas supply business. With a focus on Ichthys, it also
secured its own fleet of ships, including ownership of its first
LNG tanker and chartering of other vessels. Operation has now
begun and the company’s gas supply chain is complete, with aview to further development going forward.
In what may be a new dawn, INPEX has launched into
initiatives toward renewable energies, starting with solar power
generation and geothermal power generation.
With oil prices reaching historical lows from the end of
2014, INPEX was under pressure to respond urgently andseverely, with actions including reducing costs, reviewing investment programs, and reviewing its portfolio in order tostrengthen its business structure and improve business efficiencies. In fact, the company was experiencing the greatest changes
to the business environment in its entire history. Incidentally,
it was at this time that production from the Attaka, Mahakamand other concessions, which had underpinned growth forthe company for 40 years, started to decline. Therefore, fiscal 2014 and onward represented difficult times for businessperformance.
Looking back over the past ten years, INPEX has faced
numerous major challenges over what feels like the most difficult of journeys. During this period, INPEX has remained
focused on becoming a global operator and has made great
strides in responding to the many different experiences it faced,
including developing HSE-related systems under the “safety
first” motto, overall planning and process management, procuring and contracting materials and insurances, securing andmanaging human resources and finances, and the legal system.
At the same time, the company went through a decade of

upheaval, experiencing firsthand how much the business environment could change over a short period of time and how important an agile and flexible response is to things like changing
energy supply/demand structures with the arrival of shale oiland other energies, the climate change problem, the growth inrenewable energies, tighter corporate governance and the flowof ESG investments.
The long-awaited Ichthys production came online lastyear. But INPEX has experienced big developments on the business front over the past ten years. Upstream business production volume increased from about 400,000 to about 500,000
barrels per day, with the Ichthys Field growing to a point where
it could achieve 700,000 barrels per day at plateau production.
With confirmed reserves mainly in the Ichthys and Abu Dhabi
assets growing from 1.6 billion BOE to 3.6 billion BOE (crude
oil equivalents), the company’s business infrastructure has beenenhanced enormously. Together, the start of full production at
Kashagan, the expansion of the Abu Dhabi concession, and thestart of production at Ichthys have enhanced the company’s
portfolio. And in Japan, long-term production systems havebeen strengthened at the Minami-Nagaoka Gas field.
INPEX has expanded its domestic gas supply infrastructure to the two billion cubic meter level, with plans to further
expand to 2.5 billion cubic meters in the near future. At thesame time, it is developing renewable energies as a businessthrough geothermal power generation at Sarulla, and progress
toward geothermal and wind power generation.
Next for INPEX is large-scale development of the Abadi
Gas Field. Utilizing the accomplishments of the past 10 years
to enable its next stage of growth in line with a new growthvision, and leveraging those difficult experiences in future opportunities, INPEX will push through these changing times as
it continues to advance as a global company.
The following pages detail the growth and experience trajectory of INPEX over these past ten years.
For the sake of convenience, all timeline references to actions of the company’s predecessors will be referred to as being
taken by INPEX.

Preface92008–09
2008
Oct Three companies merged to establish INPEX CORPORATION
Nov Acquired interest in the Block BM-C-31, Campos Basin, offshore Brazil
Nov Acquired the Semai II Production Sharing Contract in the Seram Sea, offshore
West Papua, Indonesia
Dec Acquired 40% participating interest in the Block 18, Oriente Basin, onshore
Ecuador

2009
Jan
Mar
Apr
Apr
Apr
Apr

10

Initiated FEED for Ichthys LNG Project LNG liquefaction plant
Acquired interests in the discovered but undeveloped area located close to
the Van Gogh Oil Field offshore Western Australia
Opened Darwin Office in Australia
Completed Japan-GTL Demonstration Plant
Invested in ELIIY Power Co., Ltd., which is planning mass production ofhigh-capacity lithium-ion batteries
Initiated offshore FEED for Ichthys LNG Project production facilities

Jun
Jul
Aug
Oct
Oct
Nov
Dec

Commenced crude oil production from the Frade Field, Campos Basin, offshore Brazil
Lifted first cargo from Tangguh LNG Project in Indonesia
Commenced construction of Naoetsu LNG Terminal
Completed Shin Oumi Line (68 kilometers between Tomioka, Joetsu City andToumi, Itoigawa City)
Ceased production at Griffin oil fields located offshore Western Australia
Transferred partial interest in the Abadi field, Masela Block to PT EMP Energi
Indonesia (EMPI)
Commenced crude oil production from the North Belut Gas Field in the SouthNatuna Sea Block B in Indonesia

FPSO vessel at Frade Field

Train 1 and Train 2 at Tangguh LNG Terminal

Unloading berth at Tangguh LNG Terminal

Naoki Kuroda, then INPEX President, speaking at a party announcing completionof the Shin Oumi Line

Frade Field offshore Campos, Brazil commences oil
production
In June 2009, the Frade Field offshore of Campos, Brazil started producing oil. This was the first time a Japanesecompany had participated in a Brazilian petroleum upstream
project that progressed to production. Discovered in 1986,
the Frade Field is situated offshore in 1,050 to 1,300 meters ofwater, about 370 kilometers northeast of Rio de Janeiro.
With its Petroleum Law Revision of 1997, Brazil opened
to foreign companies its upstream oil concessions that had
previously been exclusive domain of the country’s national oil
company Petrobras. In line with the INPEX strategy of gaining
a foothold in Brazil through participation in upstream projects, the company took part in an international bidding process conducted by Petrobras in July 1999. At that time, theFrade Field was in the exploration and evaluation stage, andwas successful in acquiring the Frade Field concession interest. INPEX is participating in this project through Frade Japão
Petróleo Limitada (FJPL), which holds 18.3% interest. FJPL isa Brazilian subsidiary of INPEX Offshore North Campos, Ltd.,

whose shareholders are INPEX, Sojitz Corporation and Japan
Oil, Gas and Metals National Corporation (JOGMEC). With
Chevron as operator (participating interest of 51.7%), FJPL
(18.3%) is partnering with Petrobras (30%) in development
and production from this project.
This field was developed on the concept of tying back thesubsea wells to a floating production, storage and offloading(FPSO) vessel. The final investment decision (FID) for the
Frade Field was obtained in June 2006, with production starting in June 2009. Due to small oil seeps, the project partners
voluntarily suspended production temporarily in March 2012,
but safely resumed oil production in April 2013.

of the project as well as geographical challenges of project development in such a remote location.
The Tangguh LNG Project is composed of three Blocks:
Berau, Wiriagar and Muturi, located between Berau Bay andBintuni Bay in Bintuni, in the Indonesian province of West
Papua. As a result of exploration carried out since the mid1990s, giant gas fields straddling these three Blocks were identified. In 1997, President Suharto named this large LNG project“Tangguh” as the third major LNG project following Arun andBontang. INPEX acquired a 16.30% participating interest in
this project in October 2001 through MI Berau, a company
jointly established with Mitsubishi Corporation (INPEX net
7.17%). INPEX later acquired a further stake, increasing its
net interest to 7.79%. Joint venture partners in this project
are the operator BP (40.2%), CNOOC (13.9%), Nippon Oil
Exploration (Berau) (12.2%), KG Berau Petroleum (8.6%),
LNG Japan Corporation (7.3%), and KG Wiriagar Petroleum(1.4%).
The Tangguh LNG Project obtained approval from theIndonesian government in January 2005 for the development

plan with total annual LNG production capacity of 7.6 million
tons through trains 1 & 2. FID was made in March 2005 andwent on to ship the first LNG cargo in 2009. In July 2016, theproject made FID for the development of a third train to develop the huge amount of recoverable reserves and increase thevalue of the project. Development work is currently progressing toward the planned start of production in 2020. After thestartup of train 3 for production, the annual LNG production
capacity will increase to 11.4 million tons and it will be one of
the world’s largest LNG projects.

Part II First 10 years after merger

Tangguh LNG Project commences LNG shipment
In July 2009, the Tangguh LNG Project lifted the firstcargo from the LNG production and offloading facility inthe Bintuni Bay, West Papua Province, Indonesia. The project
moved to full-scale operations in the short period of four years
and four months from the final investment decision (FID) in
March 2005. It was a tremendous result considering the scale

INPEX discontinues oil production at Griffin oil fields
offshore Western Australia
In October 2009, the Griffin oil fields in the WA-10-L
production license region offshore Western Australia, withINPEX involvement through its subsidiary INPEX Alpha,ceased production. This was the first project in Australia that
INPEX, as a Japanese company, became involved from exploration through oil field discovery, development and production.
It was also a major project that gave INPEX an opportunity for
2008–2009

11

2010
Jan
Jan
Feb
Feb
Feb
Feb
Mar
Apr
May
Jun
Jul

Received regasified LNG from Shizuoka Gas Co., Ltd.
JODCO exhibited at the 3rd World Future Energy Summit 2010 (Abu Dhabi)with the main theme of renewable energy
Commenced CO2-EOR joint study with JOGMEC in Abu Dhabi
Commenced crude oil production from the Van Gogh Oil Field, offshore Western Australia
Acquired interests in Block BM-ES-23 Espirito Santo Basin, offshore Brazil
Formulated the Corporate HSE Mid-Term Plan (Phase 1)
Obtained final approval for development plans for Chirag Oil Project of ACG
Block, Caspian Sea, Azerbaijan
Obtained approval of development on the Kitan Oil Field Joint Petroleum Development Area, Timor Sea (JPDA06-105)
Signed Joint Venture Agreement for development in the Orinoco Oil Belt,
Venezuela
Toshiaki Kitamura became the President & CEO
Decommissioned Offshore Iwaki Platform

Jul Decided extension of Shin Tokyo Line (fourth phase) (between Takase, Tomioka City and Kamiozuka, Fujioka City)
Jul Resolved to issue new shares and conduct a secondary offering of shares inorder to fund Ichthys LNG Project development expenditures
Aug Commenced demonstration tests with JGC and BASF of new technology toremove CO2 from natural gas
Aug Acquired participating interest in the Block 117, onshore Peru
Aug Acquired interests in Nganzi Block, onshore D.R. Congo
Aug Commenced crude oil production from the Ravensworth Field, offshore Western Australia
Sep Sold Offshore Northwest Java and Offshore Southeast Sumatra interests to
Pertamina
Sep Acquired 15% participating interest in the Sebuku Block in Indonesia
Oct Withdrew from the Azadegan development project in Iran
Nov Released Invitation to Tender for the Central Processing Facility for Ichthys
LNG Project

GRIFFIN VENTURE, the FPSO vessel used for offshore processing and storageof oil from the Griffin oil fields

full participation in oil and gas exploration and development
in Australia.
The Griffin oil fields consisted of three fields, the Griffin,
the Chinook and the Scindian. They were located about 62
kilometers off the coast of Western Australia in the Carnarvon
Basin and in a water depth of about 130 meters. Discovered in
1989 and 1990, the fields started production in January 1994.
After processing and storage on an FPSO vessel, the oil was offloaded to tankers, and gas was pumped through a 70-kilometer
subsea pipeline for sale within Australia. With a 20% participating interest in the project, INPEX Alpha worked on production
with the operator BHP Billiton (45%) and ExxonMobil (35%).
The fields were producing about 80,000 barrels of oil per
day at peak. However, through natural depletion the volume
dropped to less than 4,000 barrels per day until 2009 when
production finally ceased. The fields produced a total of 178
million barrels of oil equivalent.

12Part II First 10 years after merger

NINGALOO VISION, the FPSO vessel processing oil from the Van Gogh Oil Field
and Coniston Oil Field

From left: Then Chairman Naoki Kuroda, President Toshiaki Kitamura andVice Chairman Masatoshi Sugioka launching the new organizational structure in June 2010

INPEX commences oil production at multiple oil fields
offshore Western Australia
In February 2010, INPEX started producing oil throughits subsidiary, INPEX Alpha, at the Van Gogh Oil Field locatedin production license region WA-35-L offshore Western Australia. In August 2010, production also started from the Ravensworth Oil Field in the WA-43-L region. This was soon after
production in the Griffin oil fields ceased in 2009, which was
one of INPEX’s core business activities in Australia.
Discovered in 2003, the Van Gogh Oil Field is locatedabout 50 kilometers offshore Western Australia at a water depthof 400 meters. In 2007, development the field was decidedwith the concept of tying back the subsea wells to an FPSO
vessel. INPEX Alpha has a 47.499% participating interest in
this project, with the remaining 52.501% held by Apache Corporation (currently Santos) as the operator. In May 2015, theConiston Oil Field located in the Coniston Unit, straddling the
WA-35-L region where the Van Gogh Oil Field is located andthe neighboring WA-55-L region, started production throughthe FPSO used at the Van Gogh Oil Field.

The Ravensworth Oil Field, also discovered in 2003, islocated 45 kilometers offshore Western Australia but in ashallower depth of 210 meters. The decision to move to development was made in 2007. INPEX Alpha has a 28.500%
participating interest in this project, with the operator BHP
Billiton holding 39.999% and the remaining 31.501% heldby Apache Corporation (currently Santos). The oil produced
from the Ravensworth Oil Field is processed and offloaded at
the FPSO operated in the neighboring WA-42-L production
license area.
INPEX withdraws from Azadegan development project
The Azadegan Oil Field, a giant onshore oil field locatedabout 80 kilometers west of Ahwaz, the capital of Iran’s Khuzestan Province, was discovered in 1999. In 2000, the concessionof Saudi Arabia held by Japan through Arabian Oil Company,
Ltd. was expired. In reaction to this, the Japanese government
was looking for a replacement concession in the Middle East
to secure the country’s energy security. In November 2000, on
the occasion of Iranian President Khatami’s visit to Japan, the
2010

13

Nov Transferred partial interest (10%) in the Masela Block
Nov Withdrew from the Block 18 without migration to service contract, onshore
Ecuador
Dec Released Invitation to Tender for Ichthys LNG Project onshore LNG facilities
Dec Obtained approval for Abadi Gas field FLNG development plans

14

enterprise, with comprehensive support from the Japanese
government, so having to withdraw halfway through was aregrettable result. Nevertheless, this project provided INPEX
with first-hand experience of the changes in the external environment, such as oil prices, materials and equipment markets
and international affairs, which are unavoidable when conducting upstream businesses. Since then, the useful experienceand knowledge gained by INPEX through this episode hashelped with other project management and risk management
situations.

JODCO exhibiting at 3rd World Future Energy Summit 2010 in Abu Dhabi

Decommissioning work of platform at the Offshore Iwaki Gas Field

two governments signed a basic agreement giving Japan priority
negotiation rights for the Azadegan development. At the time,
INPEX had succeeded in acquiring a large concession in the
Caspian Sea to add to its key assets in Indonesia and Australia.
It set out to transform into a company capable of expanding
globally and rank among the international oil companies ofEurope and the US some day in the future. Therefore, it had
decided that becoming an operator of one of the major oil fielddevelopment businesses in the Middle East was an essential
strategy for that goal. For this reason, it entered the contest as
a private sector company and began serious negotiations with
NIOC toward acquiring a concession. As a result of tough negotiations, in February 2004, INPEX and Naftiran IntertradeCo., Ltd (NICO), a subsidiary of NIOC, finally managed tosign a service agreement. It was called a “buyback” agreement
regarding the evaluation and development of the Azadegan Oil
Field with participating interests of 75% and 25% respectively.
The contract for Azadegan Oil Field development adopts a
two-stage concept. The full production level for stage 1 was
expected to reach 150,000 barrels per day after 4 years and 4

months from the date of the contract, and the full productionlevel for stage 2 was expected to reach 260,000 barrels per day
after 8 years from the date of the contract.
Subsequently, in accordance with the basic development
plan, oil reservoir evaluation work, basic design work on thefacility, and development preparations were conducted. However, the project economics had turned for the worse since2004 because the international situation surrounding Iran deteriorated and dramatic increases in steel market prices caused
considerable increases in development costs. As a result, in October 2006, INPEX assigned 65% of its participating interest
to NICO and transferred operatorship. Furthermore, the international situation continuously deteriorated, and sanctions
against Iran by the US got tougher in particular. Therefore, investment to Iran became practically impossible. As a result, in
October 2010, INPEX made an overall decision to withdraw
from the project in light of discussions with relevant parties
including the Japanese government.
As explained above, this project was a large project thatwas part of a planned strategy to advance further as a global

Part II First 10 years after merger

INPEX decommissions offshore Iwaki platform
In May 2010, INPEX started decommissioning the platform at its Offshore Iwaki Gas Field, located about 40 kilometers offshore of Naraha Town, in Fukushima Prefecture, Japan,
at a water depth of 154 meters.
The Iwaki Gas Field was the first offshore gas field on the
Pacific Ocean side in Japan. It was discovered in 1973 throughjoint exploration drilling by INPEX and Esso Exploration. The
field produced gas and condensate for 23 years between the startof production in 1984 and 2007. For development of the gas
field, it was taken into account that this area has severe weather
and nautical conditions, and frequent earthquakes. Therefore,
the facilities were designed and manufactured to withstand a
100-year weather event such as a typhoon with waves up to
20 meters and wind speeds up to 62 meters per second, anda 200-year earthquake event on the level of the Great Kanto
Earthquake. Construction of the platform started in 1981. Ata height of 247 meters from the ocean floor and with a total
weight of 33,500 tons, the giant offshore facilities were completed in 1984. This was thanks to the superiority of Japan’s
industrial technologies. Drilling of the production well took
about one year from its start in February 1984, which enabled
gas production to start in July 1984. All gas and condensate
produced in the gas field was transported to the Naraha Plant
through a 40-kilometer long undersea pipeline for supply as aclean power generation fuel to the neighboring Hirono Thermal Power Station operated by Tokyo Electric Power Co., Inc.
At the initial stage recoverable gas was estimated at 3.5 billion
cubic meters. However, the reservoir turned out to be better
than expected, delivering a total of 5.6 billion cubic meters ofgas over its lifetime. After gas production ended in July 2007,

INPEX plugged and abandoned all production wells, and thenstarted preparing for conductor pipe decommissioning, andplatform decommissioning work that included washing clean
the pipeline.
During platform decommissioning, a Sapura 3000 heavy
lifting vessel was brought from Malaysia. One of only a few
in the world, the floating crane has a lifting capacity of about
2,700 tons and comes equipped with hull thrusters to enable
dynamic positioning. Work entailed (1) lifting and decommissioning the topside facilities, (2) truncation of the jacket legs
92 meters under the water surface, (3) lifting and decommissioning the two meter diameter main piles from the eight jacket
legs, (4) pumping air into the upper jacket to create a buoyancy
tank for lifting it and moving it for temporary placement on
the ocean floor, and (5) pulling down the upper jacket to be
used as a reef for fish. It was one of the largest steel platform
decommissions globally. Therefore, the work required a rangeof technical challenges to be overcome and a high level of cooperation between the company and various contractors in Japanand overseas. In July 2010, the work was completed successfully ahead of schedule, and without any accident.

INPEX formulates Corporate HSE Medium-term PlanINPEX Holdings, Inc. was established in April 2006 aheadof full integration. At the time, it determined that activities inline with an international standard HSE Management System(HSEMS) were essential for driving greater globalization of thecompany’s E&P activities. So in June of that year, INPEX defined a new Health, Safety and Environmental (HSE) Policy for
the whole Group. In 2007, it established the Corporate HSE
Committee to discuss rules and requirements for building the
HSEMS. It then formulated HSEMS rules covering all health,safety and environment initiatives to properly implement thecommitment of the HSE Policy. Since then, INPEX has systematically focused on building its HSEMS while launchingvarious initiatives for ongoing improvements to environmental
and occupational safety and health aspects of operator projects.
Through this process, in February 2010, INPEX formulated its Phase 1 Corporate HSE Medium-term Plan (FY2010–2012) that aims to broaden HSE awareness and improve
the level of HSE activities. The five objectives set in the plan
2010

15

2011
Feb
Feb

were (1) Enhance cooperation with HSE staff at Operational
Organizations, (2) Improve capabilities of HSE staff througheducation and training. (3) Establish and achieve medium-term
numerical targets, (4) Acquire HSE capabilities equal to the average level among International Oil Companies (IOCs), and(5) Contribute toward preventing global warming throughgreenhouse gas emission reductions and energy-saving measures. As a result, it succeeded in dramatically raising the levelof HSE activities. They included application of the IFC performance standards and IFC guidelines to voluntary corporate
standards, establishing the INPEX 7 Safety Rules, and holding
HSE Meetings for HSE managers in Japan and overseas. And
promotion of the system of HSE awards, development of systems for responding to large-scale oil spill, and development ofearthquake response manuals in anticipation of a Tokyo inland
earthquake were also included.
The Phase 2 Corporate HSE Medium-term Plan
(FY2013–2015) established seven objectives to raise the company’s level of HSE activities to a level equal to the IOCs 1sttier group. As a result, it succeeded in further raising its ability
to execute HSE activities. Through this, voluntary standardization of Safety Cases and establishment of related management
requirements through the creation of a new team specializing
in Process Safety were achieved. In addition, dramatic improvement of LTIF and TRIR results, revision of emergency
response procedures and a corporate crisis response manual
through the adoption of an Incident Command System, andadoption of an HSE risk activity reporting system were also
provided. In 2016, INPEX formulated a new Phase 3 Corporate HSE Medium-term Plan (FY2016-2020) that followed onfrom Phase 2. The eight objectives were established to rapidly
yet steadily achieve HSE competencies on a level equal to theIOCs 1st tier group. Its eight objectives were (1) Reform the
INPEX HSEMS in accordance with the newly released IOGP
guidelines, (2) Enhance the HSE assurance and governancesystem by conducting risk-based audits and HSE reviews, (3)Enhance technical support using HSE resources, (4) Develop
HSE activities reflecting worksite feedback, (5) Commit tomajor accident prevention by promoting Process Safety management, (6) Continue monitoring and evaluating LTIF and
TRIR, (7) Improve emergency and crisis response capabilities,and (8) Drive forward management plans for reducing GHG
16

Part II First 10 years after merger

Apr
May
May
Jun
Jun
Jun

Acquired participating interest in the Walker Ridge 95/96/139/140 Blocks located in the Gulf of Mexico in the US
Confirmed gas and condensate in the Dai Nguyet structure in Blocks 05-1b &05-1c, offshore southern offshore Vietnam
The Environment Safety Unit was renamed to the HSE UNIT
Opened Rio de Janeiro Office in Brazil
Decided investment of the Toyama Line (between Itoigawa City and Toyama
City)
Final investment decision made on the Ruby gas field in the Sebuku Block inIndonesia
Agreed on joint geothermal energy development survey with Idemitsu Kosan
Co., Ltd. in Hokkaido and Akita Prefecture
Decided purchasers for entire 8.4 million tons per annum of LNG from theIchthys LNG Project

Jun Established the Health, Safety and Environmental Policy
Jul Split the Technical Division Technology Development & Support Unit into Subsurface Evaluation Unit and Field Development Unit
Jul Obtained approval for the Ichthys LNG Project Environmental Impact
Statement
Jul Undertook legal restructuring and transferred Company assets related to the
Ichthys LNG Project
Oct Commenced crude oil production from the Kitan Oil Field, Joint Petroleum
Development Area, Timor Sea (JPDA06-105)
Nov Oil sheen occurred in the vicinity of the Frade field Campos Basin, offshore
BrazilNov Acquired 100% participating interest in the Babar Selaru Block, south offshore Indonesia

Recovery support activities for the Great East Japan Earthquake at Rikuzentakata City (September 2011)

Provisional fumarolic testing of geothermal survey wells in the Oyasu area of
Yuzawa City, Akita Prefecture (November 2017)

INPEX joins Great East Japan Earthquake relief andrecovery efforts
On March 11, 2011, a huge magnitude 9.0 earthquake occurred in the Pacific Ocean offshore of the Tohoku region in Japan,
and with a powerful tsunami immediately afterward, 15,896 people died, and 2,537 people are still missing for as of June 10, 2018,according to the National Police Agency, resulting in massive damage and a large number of people lost their livelihood.
INPEX luckily escaped any human loss or serious property damage, but Fukushima Prefecture, with which INPEX
had a long and deep relationship through production operations at its Offshore Iwaki Gas Field, severely damaged by theearthquake, tsunami and the effects of nuclear disaster after theearthquake. INPEX’s business sites at Nagaoka City and Kashiwazaki City had previously experienced the Niigata Chuetsu
Earthquake (2004) and Niigata Chuetsu Offshore Earthquake(2007), and the company was strongly aware of the necessity ofprompt relief and support, so the following relief and recovery
efforts were immediately implemented.
• Donation of 200 million yen, plus a further 4.8 million yen

provided by INPEX Group executives and employees, to theaffected areas through the Japan Red Cross•P rovision of essential household items, including drinking
water, emergency food items, blankets and other relief goods
to affected areas (Soma City, Fukushima Prefecture)•P rovision of petroleum products, refined and manufactured
from domestic oil at an INPEX Group refinery to affectedareas (Iwaki City and Soma City, Fukushima Prefecture) due
to severe fuel shortages•P rovision of physical support such as restoration work of
town gas supplies
In July 2011, INPEX set up a paid volunteer leave system to support volunteer activities in affected areas conductedby employees, with related transport and accommodation, as
well as equipment, paid for by INPEX. In the same month, 31
employees participated in recovery work in the city of Rikuzentakata, Iwate Prefecture. Since then, and up until December
2016, 82 restoration and recovery activities have been conducted by INPEX employees, with participation by more than
700 people.

INPEX 7 Safety Rules

emissions. During FY2016, the company successfully shared
HSE lessons on construction work by enhancing HSE technical support in Japan and overseas and holding HSE Forums.
Such efforts contributed to achieving LTIF of 0.11 and TRIR
of 0.97 which were the top 25% level of IOGP member companies; however, considering that both benchmarks started toshow an increase in FY2017, enhanced efforts have been undertaken to ensure further improvements. In April 2017, INPEX
revised its HSE Policy in line with this latest plan. Also, it once
again declared that it would work to develop an HSE culture
in which HSE is regarded as an indispensable factor in all areasof decision making, and that will be pursued on a daily basis.
The company is now also actively involved in efforts to improve
HSE performance across the whole Group, revise its HSEMSManual, and expand the scope of HSE management to its domestic subsidiaries and others.

2011

17

Nov Held the first Environmental Meeting (on Nov 28 and 29)
Nov Agreed in principle to acquire participating interest in the shale gas projects
in the Horn River, Cordova and Liard basins, British Columbia State, Canada
Dec Transferred partial participating interest in the Masela Block, Abadi Gas Field
to a subsidiary of Shell
Dec Agreement made with Osaka Gas Co., Ltd. for partial transfer of Ichthys LNG
Project equity interest
Dec Final investment decision made on the Coniston Unit located offshore Western Australia
Dec Sold interests in the West Bakr block, Egypt
Dec Joined United Nations Global Compact Initiative

Oil production started at the Kitan Oil Field

INPEX launches joint study in preparation for firstcommercial geothermal power generation project
In June 2011, INPEX and Idemitsu Kosan Co., Ltd.
agreed to conduct the joint study, namely a geothermal power
generation feasibility study, in Amemasudake area (Akaigawa
Village and Sapporo City) of Hokkaido and the Oyasu area
(Yuzawa City) of Akita Prefecture. This was a major step towards realizing the basic INPEX strategy of Evolvement into a
company that offers diversified forms of energy, established at
the time of the business integration in 2008, INPEX had madeits first inroads into the renewable energy business. INPEX adjudicated that the discovery of subsurface geothermal resources
would allow the application of the technologies and knowledge, acquired over many years identifying and developing underground oil and gas resources, so it expected to realize strong
synergies in this new endeavor.
New Energy and Industrial Technology Development
Organization (NEDO) had already surveyed the Amemasudake and Oyasu areas to promote geothermal energy development, and had identified them as having high potential for
18

Part II First 10 years after merger

geothermal resources. Our initial surveying started in 2011,
with surface study including geological survey, gravity survey
and electro-magnetic survey. Then in July 2013, with the additional participation of Mitsui Oil Exploration Co., Ltd., thesecond stage began with drilling of geothermal exploratory
wells to survey such things as geological structure, undergroundtemperature and permeability of the reservoir. After that, thecompanies investigated commercialization, including flow testof exploratory wells at both sites.
From 2013, INPEX also started the joint study at theBandaisan area and Azuma-Adatara area of Fukushima Prefecture as a member of the Fukushima Geothermal Project Team,a group of 11 Japanese companies, with a view to geothermalenergy development.

International symposium held as part of INPEX’s endowed chair on Energy
Security and the Environment at the University of Tokyo’s Graduate School of
Public Policy (November 2011)

Amemasudake area,
Hokkaido

Oyasu area,
Akita Prefecture

Sites of joint surveys on geothermal power generation

2005. INPEX overcame such difficulty and achieved its target
through combined efforts of people across the company.
Securing long-term buyers of entire LNG production
from the Ichthys LNG Project was a big step forward in obtaining the FID.

Ichthys LNG Project finalizes sales agreements
covering all LNG to be produced
In June 2011, the Ichthys Project Joint Venture reachedagreements to enter into long-term sales contracts for liquefied
natural gas (LNG) from the Ichthys LNG Project, which was
required for development of Ichthys by INPEX as operator.
The long-term sales contracts, running for 15 years from 2017,
will supply 5 Buyer Consortium consisting of Tokyo ElectricPower Co., Inc. (1.05 million tons per annum (mtpa), now
JERA Co., Inc.), Tokyo Gas Co., Ltd. (1.05 mtpa), The Kansai Electric Power Co., Inc. (0.80 mtpa), Osaka Gas Co., Ltd.
(0.80 mtpa), and Kyushu Electric Power Co., Inc. (0.30 mtpa),
2 Buyer Consortium consisting of Chubu Electric Power Co.,
Inc. (0.49 mtpa, now JERA Co., Inc.) and Toho Gas Co., Ltd.
(0.28 mtpa), CPC Corporation, Taiwan (1.75 mtpa), Total
and INPEX (0.90 mtpa each). Then from December 2011 toJanuary 2012, the Ichthys Project Joint Venture signed legallybinding Sales and Purchase Agreements with these 10 companies. The signing of these contracts meant the Project secured
the sales of the total volume of the annual LNG production of
8.4 million tons.
This 8.4 mtpa of LNG is equivalent to over 10% of Japan’s annual LNG import volume. Approximately 70% of thisvolume will be shipped to Japanese buyers, which means the
Ichthys Project contributes to a stable energy supply to Japan.
Securing buyers for the entire LNG production was originally
expected to be difficult when INPEX started marketing in
2011

19

2012
Jan Agreed with Toho Gas Co., Ltd. and Tokyo Gas Co., Ltd. for partial transfer ofIchthys LNG Project equity interest
Jan Confirmed the final investment decision on Ichthys LNG Project
Jan Acquired participating interest in the deepwater Blocks S and R, located offshore Sabah, Malaysia
Mar Acquired Ichthys LNG Project production licenses
Mar Agreed to acquire a 17.5% participating interest in the Prelude FLNG Project,offshore Australia
Mar Established Japanese GTL (Gas to Liquid) technology in commercial scale
Mar Suspended production after another seep occurred in the Frade field, Campos
Basin, offshore Brazil

Apr
Apr
Apr
May
May
May
May
Jun

Established the GHG working group under the HSE committee
Adopted IFC Performance Standards and EHS Guidelines as Corporate voluntary standards
Started construction of Toyama Line (between Itoigawa City and Toyama City)
Formulated the Medium-to Long-term Vision of INPEXAgreed partial transfer with Chubu Electric Power Co., Inc. (currently JERA
Co., Inc.) for Ichthys LNG Project equity interest
Launched construction of the Ichthys LNG plant
Acquired 40% participating interest in Block 10 in Iraq
Established the New Ventures Division

Jun
Jun
Jul
Jul
Aug
Aug
Aug
Aug

20

Concluded an agreement for reciprocal backup supply of natural gas in emergencies with Tokyo Gas Co., Ltd. and Shizuoka Gas Co., Ltd.
Acquired 50% participating interest in the exploration block AC/P36, offshore
Australia
Teiseki Propane Co., Ltd. and Tokyo Gas Energy CO., Ltd. were merged
Agreed partial transfer with TOTAL group companies for Ichthys LNG Project
equity interest
Acquired a 40% participating interest in shale gas projects in the Horn River,
Cordova, and Liard basins in British Columbia, Canada
Opened Calgary Office in Canada
Acquired a 7.2% participating interest in the Lucius project in the Gulf of Mexico in the US
Acquired a 9.99% indirect interest in Block 14, offshore Angola

Aug Decided to construct the large-scale photovoltaic power generation system
INPEX Mega Solar Joetsu in Joetsu City, Niigata Prefecture
Aug Acquired next generation certification logo “Kurumin”
Oct Established the INPEX Advisory Committee
Oct Awarded offshore Exploration Blocks in the 27th Seaward Licensing Round inUK
Nov Acquired 26% participating interest in the exploration block KG-DWN-2004/6
in the Bay of Bengal, India
Nov Concluded a Service Contract for Exploration Block 10 in Iraq
Dec Terminated the refining business at the Kubiki Refinery of Teiseki Topping
Plant Co., Ltd.
Dec Completed the Ichthys LNG Project financing arrangements
Dec Added INPEX 7 Safety Rules to corporate voluntary standards
Dec Completed fourth phase construction work for the Shin Tokyo Line extension

Ceremony marking the final investment decision (FID)
for the Ichthys LNG ProjectPrelude FLNG vessel departing for offshore production site

Production facilities at the Offshore Angola Block 14

Members of the INPEX Advisory Committee: (front row from left) Masayuki
Yamauchi, Tsutomu Toichi, Kaori Kuroda and Kent Eyring Calder

Ichthys LNG Project announces financial investment
decision (FID)
In January 2012, the final investment decision was obtained for the Ichthys LNG Project. With INPEX participating
through one of its Australian subsidiaries, this was the first time
for a Japanese company to lead an LNG development operatorship of this scale. The project would entail liquefaction of natural gas from the Ichthys Gas-condensate Field at an onshore gasliquefaction plant built at Darwin, producing and shipping 8.4
million tons of LNG annually, and 1.6 million tons of LPG. It
would also produce and ship about 100,000 barrels of condensate per day (at its peak) from a floating production, storageand offloading (FPSO) facility and Darwin.
INPEX acquired this concession solely in 1998, after
which it conducted test drilling as the operator and then discovered the Ichthys Gas-condensate Field in 2000. From thatpoint, it spent over ten years on a range of work, starting fromthe basic front-end engineering and design (FEED) work fordevelopment, until reaching the most important milestone,
the FID. The Ichthys LNG Projects is forecast to have a long

40-year production life, which puts it at the center of INPEX’s
medium- to long-term growth strategy. For Japan as well, theproject is making an important contribution to energy stability.
The real engineering, procurement and construction(EPC) work—detailed design, materials procurement and construction—ahead of the start of production started after obtaining the FID. In May 2012, a groundbreaking ceremony
was held for the onshore gas liquefaction plant on the outskirtsof Darwin, after which full-scale construction work started forthe plant. The many guests at the ceremony included dignitaries
from the Australian Commonwealth Government, including
Prime Minister Julia Gillard, Resources, Energy and Tourism
Minister Martin Ferguson, and Northern Territory Chief Minister Paul Henderson; the Senior Vice Minister of Economy,
Trade and Industry and the Japanese Ambassador to Australia
from the Japanese Government; and many other dignitaries ofcompanies related to the project.

Australia, INPEX agreed to acquire a 17.5% participating interest in the Prelude FLNG Project being developed by RoyalDutch Shell’s subsidiary, Shell Development Australia (SDA),in the WA-44-L region offshore Western Australia. This was
one of the world’s first FLNG (floating liquefied natural gas)projects using a floating facility for gas liquefaction. In July
2011, INPEX selected Royal Dutch Shell as a strategic partnerand hoped to acquire experience and knowledge about FLNG
development for use in future LNG projects.
The Prelude FLNG Project consists of two gas fields located in Western Australia’s WA-371-P region, acquired by
Royal Dutch Shell in 2006, with the Prelude gas field discovered in 2007 and the Concerto gas field in 2009. FID was madein May 2011 with plans to develop and produce 3.6 million
tons of LNG and 400,000 tons of LPG annually at peak, and
36,000 barrels of condensate per day at peak.
Participating interests in this project were divided between
the operator SDA (67.5%), INPEX (17.5%), KOGAS (10%)
and OPIC (5%).
In June 2017, the FLNG vessel—the most importantfacility in the project—left South Korea where it was built andarrived at the site offshore Western Australia, and the Prelude
gas field started production in December 2018 after a series ofcommissioning work.

Part II First 10 years after merger

INPEX acquires stake in Prelude FLNG Project
In March 2012, through its subsidiary INPEX Oil & Gas

INPEX acquires stakes in deepwater exploration
blocks offshore Sabah, Malaysia
In January 2012, INPEX simultaneously acquired a 75%
participating interest in deepwater Block S in Sabah, Malaysia, and a 37.5% participating interest in deepwater Block R,
southwest of Block S, from Malaysia’s national oil company,
Petronas. Both blocks held promise for oil and gas discovery
because they were located in the vicinity of large oil fields suchas the Kikeh and the Gumusut fields. As INPEX’s first operator project in Malaysia, INPEX Offshore North West Sabah
worked closely with partner Petronas Carigali (PCSB), a subsidiary of Petronas, in the S Block region. Meanwhile, INPEX
Offshore South West Sabah conducted exploration activities inBlock R with the operator JX Nippon Oil & Gas Exploration(Deepwater Sabah) and PCSB.
2012

21

2013
Jan
Feb
Mar

The companies conducted a three-dimensional seismic
survey and other geological and geophysical studies on both
blocks before drilling wildcat wells. They eventually withdrew
from the S Block in 2016 after being unable to find oil or gas.
They discovered several oil layers at the Bestari-1 exploration
well, drilled in Block R in 2015, but withdrew from that also
because the appraisal wells were unable to confirm if there werecommercial quantities available in the reserves.
INPEX establishes MEDIUM- TO LONG-TERM VISIONIn May 2012, INPEX established its MEDIUM- TO
LONG-TERM VISION OF INPEX -Ichthys and our growth
beyond. With the FID obtained for the Ichthys LNG Projectin January of the same year, INPEX established the VISION to
set targets for achieving sustainable growth over the mediumto long-term, and for clarifying key initiatives for the next five
years leading up to the Ichthys startup.
The energy situation was changing rapidly and becoming
more complex, so there was an acute awareness of a shift toward
gas and renewable energies amid increasing demand for energy,
partnerships and acquisitions within the energy development
industry expanding dynamically, and the need to respond to
the arrival of unconventional resources and issues surrounding
safe operations and the global environment. To achieve continuous growth in this environment while focusing on the start ofproduction at Ichthys, INPEX established concrete targets toachieve three growth targets in the 2020s. It also clarified concrete measures concerning priority initiatives for the following
five years, and the necessary management policies, required foreach target. By achieving these targets, INPEX would become aleading and internationally competitive oil and gas E&P company, while growing into an integrated energy company withnatural gas at its core.
The three targets INPEX set itself were (1) Continuous

22

Part II First 10 years after merger

Apr
Apr
Apr
Apr
Apr
May

MEDIUM- TO LONG-TERM VISION OF INPEX -Ichthys and our
growth beyond

enhancement of our E&P activities (1 million barrels per day
by the early 2020s), (2) Strengthening our gas supply chain(domestic gas supplies of 2.5 billion cubic meters annuallyby the early 2020s and 3 billion cubic meters in the longterm), and (3) Reinforcement of our renewable energy initiatives (research, development and commercialization targeting
growth for the next generation). The three management policies INPEX wanted to develop were (1) Securing / developing
human resources and building an efficient organizational structure, (2) Investment for growth and return for shareholders,and (3) Responsible management as a global company.

Launched construction of the central processing facility (CPF) of the Ichthys
LNG Project in Geoje Island, Korea
Established the INPEX HR Vision
Awarded interests in the West Sebuku Block, South Makassar, offshore
Indonesia
Formulated the Corporate HSE Mid-Term Plan (Phase 2)
Merged Teiseki Topping Plant Co., Ltd., and Teiseki Transport System Co., Ltd.,and named the merged company INPEX Logistics (Japan) Co., Ltd.
Acquired 25% participating interest in the exploration block Area 2 & 5, offshore Mozambique
Obtained authorization for the restart of production activities at the Frade
Field in Campos Basin, offshore Brazil
Start of operation of INPEX Mega Solar Joetsu
Acquired 30% participating interest in exploration block Area 15, Uruguay

May
Jun
Jun
Jun
Jun
Jun
Jun
Jul

Concluded a Cooperation Agreement for Magadan 2 and 3 blocks in the Seaof Okhotsk, Russia
Established Gas Supply & Infrastructure Division (Coordination & Administration Unit, Strategy & Planning Unit, Naoetsu LNG Terminal, Pipeline Operation& Maintenance Unit, and Toyama Pipeline Construction Office)Decided to construct of new LNG vessels for Ichthys LNG Project
Succeeded in appraising the Dai Nguyet gas and condensate discovery in
Blocks 05-1b and 05-1c offshore southern Vietnam
Acquired 100% interest in the exploration Block WA-494-P, offshore Western
Australia
Started construction of Ichthys LNG Project FPSO facility in Okpo, Korea
Agreed to transfer part of the Ichthys LNG Project equity interest to CPC Corporation, Taiwan
Completed the construction of the pipeline connecting Naoetsu LNG Terminal
with the existing pipeline network

TANGGUH FOJA, the first LNG tanker docked at the Naoetsu LNG Terminal

INPEX Mega Solar Joetsu

INPEX completes construction of Naoetsu LNG
Terminal
In December 2013, INPEX held a completion ceremony
for the Naoetsu LNG Terminal. This was the company’s first
LNG receiving facility built in Joetsu City, Niigata Prefecture.
With the opening of this terminal, INPEX improved its domestic gas supply capacity and stabilized its supply system by mixing LNG produced overseas and gas produced in Japan from
the Minami-Nagaoka Gas Field in Niigata Prefecture. This also
further expanded its infrastructure to achieve its target of reinforcing the gas supply chain, one of the growth targets in
INPEX’s Medium- to Long-term Vision.
Japan’s demand for gas was central to a transition awayfrom petroleum-based fuels, and there were expectations that
this transition would remain strong into the future. The FID
for the Naoetsu LNG Terminal was made in August 2008
and actual construction commenced in August 2009. With
construction proceeding smoothly, the first LNG tanker, theTANGGUH FOJA, docked in August 2013. After that, commissioning of the key facilities proceeded in turn and the terminal was opened on December 1, 2013, ahead of schedule. The

terminal includes two above-ground LNG tanks with storage
capacity of 180,000 kiloliters, a berth which enables the large
210,000 cubic meter loading class Q-flex LNG tanker to dock,vaporizers and calorific value adjustment facilities. The terminal
can supply enough gas to satisfy the annual gas needs of about
five million households.
In 2016, cryogenic LPG facility was also completed in response to moves to adjust calorific values to 45 mega joules per
cubic meter, and its operation is ongoing.
INPEX commences Mega Solar Joetsu photovoltaic
power generation in Joetsu, Niigata
In April 2013, INPEX held a completion ceremony for
INPEX Mega Solar Joetsu, the company’s first photovoltaic power
generation facility. It was also INPEX’s first commercialization
project related to its Medium- to Long-term Vision growth target of Reinforcement of our renewable energy initiatives.
INPEX used part (46,710 square meters) of the premises
owned by its subsidiary INPEX Logistics (Japan) Co., Ltd.
(INPEX Logistics) in Joetsu City, Niigata Prefecture. INPEX
started installing the solar panels in October 2012, with a
2013

23

2014
Jul Started drilling exploratory wells for geothermal energy development by geothermal power generation joint venture established with Idemitsu Kosan Co.,Ltd.
Jul Agreed to transfer part of participating interest in Block 31, offshore Suriname
to Tullow Suriname B.V.
Aug First LNG carrier arrived at Naoetsu LNG Terminal
Sep Commenced crude oil production from the Kashagan field in the Caspian Sea,
Kazakhstan
Sep Fukushima Geothermal Project Team comprised of ten companies including
INPEX commenced a joint survey for geothermal energy development at Bandaisan in Fukushima Prefecture
Sep Participated in exploration projects in Irkutsk, Russia

Acquired additional exploration license in the 27th Seaward Licensing Roundin UK
Oct Commenced production from the Ruby gas field in the Sebuku PSC in
Indonesia
Nov Established the wholly owned subsidiary INPEX Energy Trading Singapore Pte
Ltd.
Dec Completed the Naoetsu LNG Terminal
Dec Acquired 29.1667% participating interest on blocks in the Kanumas Area in
the northeastern part of offshore Greenland, Denmark

OCEANIC BREEZE naming ceremony (October 2017)

Oil production started in the offshore production facilities
at the Ruby Gas Field, Indonesia

Production facilities at the Upper Zakum Oil Field

maximum of approximately 2,000kW of electric generating capacity, and went on to start operation in April 2013.
Then in July 2015, second new photovoltaic power generation facility owned by INPEX Logistics commenced the commercial operations. With this, the total expected annual power
generation capacity of the INPEX Mega Solar Joetsu projectcame to about 5.33 million kWh per year, which is equivalent
to the annual power consumption of some 1,600 households.
When constructing the facility, a number of creative ideas
were used to improve the power generating efficiency, including
solar panels designed for snow bound region, and the foundations for the panels being increased in height to prevent accumulation of snow on the panels during winter.

the hull called “Sayaendo type.” The ultra-steam turbine plantachieves reduced transportation costs through a significant improvement in fuel efficiency. She is co-owned by INPEX SHIPPING and Kawasaki Kisen Kaisha Ltd. (“K” Line) for a time
charter by INPEX SHIPPING. In October 2017 at the naming
ceremony, she was named “OCEANIC BREEZE” by Toshiaki
Kitamura, then president and CEO of INPEX, and she wasdelivered in April 2018.
In May 2013, IT Marine Transport Pte. Ltd, (ITMT), a
joint venture with TOTAL, was established to transport 1.75
million tons of Ichthys LNG per annum, to be delivered to
CPC Corporation, Taiwan, through time charter agreementwith “K” Line.
Built by Kawasaki Heavy Industries, Ltd., this world’s
largest Moss-type LNG ship’s specification is about 300 meters
length of perpendicular, 52 meters breadth, with tank capacityof 182,000 cubic meters. The ship features a TFDE (Tri-Fuel
Diesel Electric propulsion system, utilizing a diesel engine fueled by natural gas, marine diesel oil, or heavy fuel oil). Thissystem achieves reduced transportation costs through high fuelefficiency. In September 2017 at the naming ceremony, she wasnamed “PACIFIC BREEZE” by Jeng-Zen Fang, then vice president of CPC, and she was delivered in March 2018.

INPEX awarded extension on Upper Zakum Oil Field
concession offshore Abu Dhabi
In January 2014, the Abu Dhabi government granted
INPEX an extension of over 15 years to the Abu Dhabi Upper
Zakum Oil Field concession where it was participating in development and production through its subsidiary Japan Oil
Development Co., Ltd. (JODCO). The decision was made toextend the concession until December 2041, and the project’s
fiscal terms and conditions were revised.
JODCO started development of the Upper Zakum Oil
Field with ADNOC in 1978, and production started in 1982.
ExxonMobil joined the partnership in March 2006 through apartial transfer of ADNOC’s interest, and the field’s development and production continued. This field had become a key
oil field in Abu Dhabi, and the parties were working at the timeto increase production capacity to 750,000 barrels per day.
In November 2017, the parties agreed on a plan to further
lift production capacity in the oil field to 1 million barrels per
day by 2024. At this point the concession agreement was extended yet again by ten years, to December 2051.
The Upper Zakum Oil Field is the upper part of the
Zakum Oil Field, which is one of the largest oil fields in theworld. Because this is the most recent of Abu Dhabi’s large oil

Construction begins on LNG tankers to service Ichthys
LNG Project
In June 2013, INPEX made a decision to build and charter its first LNG ship to transport 0.9 million tons of Ichthys
LNG per annum to the INPEX Naoetsu LNG Terminal.
Built by Mitsubishi Heavy Industries, Ltd., the specification is 288 meters length of perpendicular, 49 meters breadthwith a tank capacity of 155,300 cubic meters. The ship featurescontinuous cover over Moss spherical tanks integrated with
24

Part II First 10 years after merger

Oct

Jan

Extended the concession agreement for the Upper Zakum Oil Field, offshore
Abu Dhabi
Jan Commenced additional oil production from ACG oil fields in the Caspian Sea,
Azerbaijan (Chirag Oil Project)
Mar Decided to construct a second INPEX Group large-scale photovoltaic power
generation system in Joetsu City, Niigata Prefecture
Mar Selected as the Nadeshiko Brand 2013 by the Tokyo Stock Exchange as an
outstanding enterprise in terms of encouraging the empowerment of womenin the workplace
Apr Commenced production at the South Belut Gas Field in the South Natuna Sea
Block B in Indonesia

Apr
May

Established the INPEX Values
Acquired 40% participating interest in Block WA-502-P offshore Western
Australia
May Signed Heads of Agreement on LNG sales with Tokyo Electric Power Company, Inc., and Shizuoka Gas Company, Ltd., for the Prelude FLNG Project inAustralia
May Concluded a contract with JOGMEC concerning the Commissioned Work
Support Work Related to Studies on the Basic Policy and Plan for Mediumand Long-Term Offshore Methane Hydrate Production Tests
Jun Opened Oslo office in Norway

Production platform for the Chirag Oil Project in the ACG oil fields concession
in the Caspian Sea

fields to start production, it has lots of room for expanding
production capacity in the future. Therefore, securing the longterm concession was a significant achievement for INPEX.
INPEX joins Japanese government-sanctioned methane
hydrate survey
In May 2014, INPEX, together with Japan Petroleum
Exploration Co., Ltd. (JAPEX) and Japan Drilling Co., Ltd.
(JDC), undertook a commission for Support Work Related toStudies on the Basic Policy and Plan for the Medium and LongTerm Offshore Production Test of Methane Hydrate. This wasa program being implemented by JOGMEC to promote development of methane hydrate in Japan. INPEX committed
to use the technologies, experience and know-how, developed
through its engagement for oil and natural gas exploration anddevelopment activities for the research and development ofmethane hydrate resources in Japan.
Substantial quantity of methane hydrate has been expected in the offshore areas around Japan to become a new domestic energy source to contribute to a stable national energy
supply for Japan by establishing robust production technology
for its commercialization. In 2013, the first offshore production
test was carried out to produce gas from a sand-layer methane
2014

25

2015
Jun Acquired 40% participating interest in Block WA-504-P offshore Western
Australia
Jun Commenced Ichthys LNG Project gas export pipeline installation work
Jul Unloaded first modules for construction of Ichthys LNG Project onshore gasliquefaction plant
Jul Acquired additional interest in the Lucius Deepwater US Gulf of Mexico
Aug Agreed partial transfer of equity interest in the Ichthys LNG Project with theKansai Electric Power Co., Inc.
Aug Confirmed gas and condensate in the Sao Vang structure of Blocks 05-1b and05-1c offshore southern Vietnam
Aug Discovered gas and condensate in Block WA-274-P, offshore Western
Australia

Sep Agreed to partial transfer of equity interest in the Deepwater Block S locatedoffshore State of Sabah, Malaysia
Sep Started upgrading facilities at Koshijihara Plant, Minami-Nagaoka gas field
Oct Participated in Japan Methane Hydrate Operating Co., Ltd.
Oct Discovered oil reservoirs in the block BM-ES-23 in Espirito Santo Basin, offshore Brazil
Oct Commenced oil production from the Umm Lulu Oil Field offshore Abu Dhabi,
UAE
Oct Established sections responsible for process safety management and security and crisis management in the USE UNIT

Jan

Start of construction of gas trunk pipeline for Ichthys LNG Project

Drill stem tests at exploration concession in offshore southern Vietnam blocks

Production facilities at the Lucius Oil Field

Fujairah Terminal used to ship production (Murban oil) from ADCO Onshore
Concession

hydrate typed formation under the seabed. This was the firstsuccessful test in the world and it led the plan of the mediumto long-term offshore production test in the government’s Planfor the Development of Marine Energy and Mineral Resourcesannounced in the end of 2013.
In October 2014, a new company Japan Methane Hydrate
Operating Co., Ltd. (JMH) was established, and INPEX madea capital participation. JMH, which received capital participation by 11 companies engaged in oil and gas development andin engineering, joined medium- to long-term offshore production test for sand-layer type methane hydrate led by the government. JMH has the ability to operate efficiently and smoothly
by its “all-Japan” organization but with the knowledge acquired
through its activities being shared across the private sector.

Oil (Con Son) Co., Ltd. on the southern coast of Vietnam.
The exploration blocks are located at 300 kilometers southeast from Ho Chi Minh City in Vietnam. Teikoku Oil (Con Son)
Co., Ltd., Idemitsu Oil and Gas Co., Ltd. (as an Operator) andNippon Oil Exploration Limited had concluded a production
sharing contract with Vietnamese National Oil (Petro Vietnam)
in 2004, acquired an investment license from the Vietnamese
government and has proceeded with the exploration works.
In addition to the gas and condensate discovery by exploration wells drilled in 2011 and 2013, Joint Venture made a big
step forward towards commercialization through the new gas
and condensate discovery in a different structure.
Subsequently, after the detailed evaluation of reserves forthese discoveries, Joint Venture made a declaration of commercial discovery in August 2016 and the development plan has
been commenced.

Lucius Oil Field in US Gulf of Mexico commences oil
production
In January 2015, oil production started at the Lucius Project located in US Gulf of Mexico. This project was INPEX’s
first ultra deepwater production project. The Lucius Oil Field
is located approximately 378 kilometers offshore of Louisiana
in about 2,160 meters of deepwater and is distributed in the
Keathley Canyon 874, 875, 918 and 919 blocks.
INPEX acquired a 7.2% interest in this field, and entered
this project, in August 2012 through its US subsidiary Teikoku
Oil (North America) Co., Ltd. Anadarko Petroleum Corporation is the operator, and INPEX, with a participating interest
currently of 7.75%, is participating in the development andproduction from this project as a partner with ExxonMobil,
Petrobras and Eni.
Produced crude oil and natural gas from the Lucius project are processed at production facilities installed offshore(SPAR platform) with the capacity to produce about 80,000
barrels of oil per day and about 450 million cubic feet of gas perday. The processed oil and gas are sent to the onshore facilities

in Louisiana through the submarine pipelines and are sold andshipped.
Commercial production from this field was achieved in
an extremely short period of time, in about five years from its
discovery in December 2009. This project enabled INPEX toacquire ultra deepwater operational know-how such as the fast
decision making and appropriate risk management by operator,
and allowed INPEX to accumulate related technical knowledge.

INPEX discovers new gas and condensate reservoirs
offshore southern Vietnam
In August 2014, the new accumulation of gas and condensate enough to consider commercialization was discovered in Exploration Blocks 05-1b and 05-1c participating through Teikoku
26

Part II First 10 years after merger

Jan
Jan
Jan
Jan
Feb
Feb

Discovered additional oil reservoirs in the BM-ES-23 in the Espirito Santo
Basin, offshore Brazil
Established the Diversity & Inclusion Group in the Human Resources Unit,
General Administration Division
Commenced crude oil production from the Lucius Oil Field in the US Gulf of
MexicoAgreed to partial transfer of participating interest in Deepwater Block R offshore Sabah State, Malaysia to Santos
Commenced oil production from the Nasr Oil Field offshore Abu Dhabi, UAE
Commenced drilling production wells for Ichthys LNG Project
Agreed to sell all participating interest in Block SL20183 in Louisiana State,
USA

Feb
Feb
Apr
May
Jun
Jun

Acquired 100% interest in the EPNT14-1 onshore exploration acreage inNorthern Territory, Australia
Acquired 40% participating interest in Blocks WA-513-P and WA-514-P, offshore Western Australia
Acquired 5% participating interest in the ADCO onshore concession in Abu
Dhabi, UAE
Commenced crude oil production from the Coniston Oil Field offshore Western Australia
Participated in the world’s largest Sarulla Geothermal Independent Power
Producer Project in Indonesia
Discovered new oil reservoir in Minami-Kuwayama Oil Field in Niigata
Prefecture

INPEX awarded ADCO Onshore Concession in Abu
Dhabi
In April 2015, INPEX acquired a 5% participating interest, through its subsidiary JODCO Onshore Ltd. (JOL), in the
Abu Dhabi ADCO Onshore Concession. The concession is oneof the world’s largest groups of oil fields producing about 1.6
million barrels of oil per day. INPEX’s acquisition is based on
a 40-year agreement, starting in January 2015, with the Emirates government and ADNOC. With the concession holding
sufficient expected reserves to enable 40 years of production,
participation in this large project will contribute to continuing
2015

27

2016
Jul Concluded a Heads of Agreement with Chubu Electric Power Co., Inc., for a
joint power supply business
Jul Concluded a contract with JOGMEC concerning the Commissioned Work
Small-scale Demonstration of Ceramic Membrane-based Produced Water
Treatment Technology
Jul Commissioned by the Agency of Natural Resources and Energy of the Ministry of Economy, Trade and Industry of Japan to drill an offshore exploratory
well in a location offshore of Shimane and Yamaguchi prefectures
Jul Started power generation at the second construction of the INPEX photovoltaic power generation system Mega Solar Joetsu
Sep Submitted the revised plan for development of Abadi LNG Project
Sep Announced an updated production schedule and raised the expected production capacity of the Ichthys LNG Project

Nov
Nov
Nov
Dec

Opened Astana Office in Kazakhstan
Conducted a short-term flow test in Amemasudake Area, Hokkaido by geothermal power generation joint venture established with Idemitsu Kosan Co.,Ltd.
Commenced crude oil production from Block 14 of Lianzi Field offshore
AngolaCompleted construction for 890 kilometers offshore pipeline for the Ichthys
LNG Project
Established Corporate Governance Guidelines
Further discovery of new oil accumulations in the BM-ES-23 block in the Espirito Santo Basin, offshore Brazil

Jan
Jan
Jan
Mar
Apr
Apr
Jun
Jun

Agreed with nine city gas companies in the Tokyo metropolitan area on the
supply of wholesale electricity
Concluded a Natural Gas Sales and Purchase Agreement with Nihonkai Gas
Co., Ltd.
Agreed to sell all participating interest in Block WA-155-P (Part 1) offshore
Western Australia to Carnarvon Petroleum Ltd.
Received authorization to establish the Geological Carbon Dioxide Storage
Technology Research Association
Received notification from the Indonesian government demanding a review of
the Abadi LNG Project development plan
Formulated the Corporate HSE Mid-Term Plan (Phase 3)
Commenced drilling operations on an exploratory well offshore from Shimane
and Yamaguchi prefectures (Completed on Oct 26)
The Fukushima Geothermal Project Team comprised of INPEX and tenother companies commenced drilling survey (Phase 3) in Bandai District,
Fukushima Prefecture for Geothermal Energy Development

Jul Made final investment decision to expand the Tangguh LNG facility in Berau
Block, Indonesia
Jul Commenced partial operation of the Toyama Line
Sep Agreed business partnership with three city gas companies (Seibu Gas Co.,
Ltd., Matsumoto Gas Co., Ltd., Suwa Gas Co., Ltd.) for wholesale electricity
supplyOct Commenced dispatch of crude oil from Kashagan Oil Field in North CaspianSea, Kazakhstan
Oct Completed construction of the Toyama Line
Dec Acquired interests in Exploratory License for Block 3 (Perdido Fold Belt) of thenorthern Gulf of Mexico, in Mexico
Dec Entered the production phase at Zapadno-Yaraktinsky Block Oil Field in Irkutsk, Russia
Dec Signed a Heads of Agreement with Rosneft Oil Company in relation to cooperation on joint exploration, development and production of hydrocarbon at alicense block in the offshore zone of Russia

New oil reservoir discovered at Minami-Kuwayama No. 3 well

Production well drilling started for Ichthys LNG Project

Production facilities at the Kashagan Oil Field

Announcing completion of the Toyama Line

expansion of INPEX upstream businesses.
The ADCO concession consists of 11 oil fields in production and four that remain undeveloped. With the generic nameof Murban oil, production from the concession is a high quality
light crude with a low sulfur content and high gasoline yield.
It is the crude of choice for many buyers in Japan and the restof Asia. A portion of production from the concession is transported through an onshore pipeline to the port of Fujairah on
the Indian Ocean for shipping without having to traverse theStraits of Hormuz.

The Minami-Kuwayama Oil Field extends across a vast
area within Niigata Prefecture, from Ozeki in Akiha-ku, Niigata City to the northern part of Gosen City.
The oil field is also located in the vicinity of some otheroil and gas fields along the Agano River such as the Niitsu Oil
Field, Minami-Aga Oil Field and Matsuzaki Gas Field.
The Minami-Kuwayama Oil Field was discovered in 2003
through the Minami-Kuwayama TT-1 exploratory well, which
was drilled to explore the depths beneath the area southwestof and adjacent to the Kuwayama Gas Field. Approximately
160,000 kiloliters (about 1 million barrels) of oil were produced at the Minami-Kuwayama Oil Field between the startof production tests in 2004 and 2015, mainly using a jet pumpextraction system using CT (Coiled Tubing). Meanwhile,countermeasures were taken to prevent the accumulation ofasphaltene within the production wells. INPEX holds a 90%
participating interest in the oil field, while TOHO EARTHTECH, Inc. holds the remaining 10%.

Kashagan Oil Field in Kazakh sector of North CaspianSea commences full-scale production
In October 2016, INPEX commenced shipment of crude
oil from the Kashagan Oil Field, a giant oil field located in the
Kazakh sector of the North Caspian Sea. INPEX North Caspian Sea, Ltd., a subsidiary of INPEX, currently holds a 7.56%
equity interest in the Kashagan project.
The Kashagan Oil Field is located about 75 kilometers offshore and southeast of Atyrau, the capital of the Atyrau Oblast
region of the Republic of Kazakhstan. The oil field lies some
4,200 meters beneath a shallow sea where the water is 3–5 meters deep, and extends over a surface area of approximately 75
kilometers by 45 kilometers with estimated reserves of about 35
billion barrels of oil in place, making it one of only a handful ofgiant oil fields around the world. In September 1998, INPEX
acquired an interest in the Offshore North Caspian Sea Contract Area, joining the consortium members in the discovery
of hydrocarbons from the first exploration well in July 2000.
INPEX and its partners subsequently drilled appraisal wells
confirming oil deposits at each one, leading to the declarationof commerciality in 2002.
However, after development work on the oil field began
in 2004, INPEX and its partners encountered a series of challenges. Conventional rigs could not be deployed due to the extremely shallow depths of the sea, while the oil reservoirs wereboth highly pressurized and contained high levels of hydrogensulfide, and working conditions were harsh especially during thefrozen winters. Compounding to these challenges was the shift
in the project’s operational structure whereby the equal shares
held by several major oil companies including ExxonMobil and
Shell made consensus building difficult. The current operatorof the Kashagan Project is North Caspian Operating Company(NCOC), a consortium of seven partners including INPEX and
Kaz MunayGas (KMG), Kazakhstan’s national oil company.
INPEX and its partners ultimately overcame the challenges and oil production started in 2013. That same year, however, gas leaks in the pipeline forced the project to be suspended
and the pipeline was re-laid over a period of about three years.
Thereafter, following a series of stringent inspections, production re-started in September 2016.

INPEX discovers new oil reservoir at MinamiKuwayama Oil Field, JapanTo further develop and enhance the productivity of the
Minami-Kuwayama Oil Field in Niigata Prefecture, INPEX
spudded the Minami-Kuwayama-3 well in April 2015, resulting in the discovery of a new, 24 meter-thick oil column at
a depth of about 3,900 meters. The Minami-Kuwayama Oil
Field’s reservoirs are mainly located at a depth of 3,000–3,500
meters.
28

Oct
Oct

Part II First 10 years after merger

2016

29

2017
Jan
Jan
Feb
Mar
Mar
Mar

Toyama Line construction

Basic test drilling work offshore of Shimane and Yamaguchi Prefectures

The Kashagan Project has adopted a phased development
plan, in which the production target for the initial phase has
been set at 370,000 barrels of oil per day. INPEX and its partners are currently engaged in production and development activities to meet this target.

INPEX drills Shimane-Yamaguchi Oki exploratory wellcommissioned by Japanese government
An exploratory well offshore Shimane and Yamaguchi prefectures commissioned by the Agency of Natural Resources andEnergy of the Ministry of Economy, Trade and Industry (METI)
of Japan was drilled in 2016 at a location approximately 130 kilometers northwest of Shimane Prefecture and 140 kilometers northof Yamaguchi Prefecture where the water depth is approximately
210 meters. The drilling operations, which were ultimately impacted by adverse weather conditions, began in June 2016 andwere completed without incident in October 2016. The well was
drilled to a depth of 2,900 meters below the seabed resulting in the
discovery of a thin gas reservoir in a shallow zone as well as somegas indications in deeper zones. In addition, strong gas indications
were confirmed, suggesting the presence of a high pressure gas column in the deepest zone. The location of the well was selectedbased on intelligence gathered from a three-dimensional geophysical survey that INPEX conducted in 2013 as well as the results of agovernment-sanctioned national geophysical survey conducted by
the seismic survey vessel SHIGEN in 2011.
The project was part of the Heisei 26–28 Domestic Offshore Drilling Program in Japan formulated by the national government in order to investigate the potential for new oil and gas
sources in Japan. This was the first government-commissioned
drilling program that INPEX undertook after its consolidation.
It is highly significant that the project was successful in confirming the presence of natural gas in the area, where exploratory drilling
had not taken place since the 1980s, and that it was implemented
with the understanding and cooperation of the local communities andother stakeholders in both Yamaguchi and Shimane prefectures.

INPEX completes Toyama Line (natural gas trunk
pipeline extension)
In October 2016, INPEX held a completion ceremony for
the Toyama Line, a natural gas trunk pipeline linking Itoigawa
City in Niigata Prefecture to Toyama City in Toyama Prefecture. With this new line, the INPEX natural gas pipeline network in Japan is now about 1,500 kilometers long.
INPEX started discussions on this pipeline around theyear 2000. However, with the 2008 decision to build the
Naoetsu LNG Terminal, Nihonkai Gas Co., Ltd. expressed desire to have natural gas supplied via the pipeline. INPEX took
the opportunity and started full-scale surveys and investigations in 2009. With results pointing to the feasibility of theline, the final investment decision was made in May 2011 anda groundbreaking ceremony was held in April 2012. During
construction, INPEX engaged with local communities, andearned their understanding and cooperation, while ensuring
operational safety at all times. Construction work of the 103
kilometer pipeline was then completed in June 2016.
From July 2016, INPEX commenced partial operations of
the Toyama Line to the Toyama plant of Nissan Chemical Industries, Ltd. Then later in October 2016, INPEX commenced
supply of natural gas to the Iwase plant of Nihonkai Gas.

30

Part II First 10 years after merger

Launched the low pressure production system at Koshijihara Plant, MinamiNagaoka gas field
Agreed in principle with ADNOC to extend the duration of joint developmentof the Satah and Umm Al Dalkh oil fields offshore Abu Dhabi, UAE
Discovered an oil reservoir at Block 10 in Iraq
Concluded an agreement in principle with Astomo Energy Corporation on thesale of LPG from Ichthys LNG Project
Completed construction of the Demonstration Plant for Produced Water
Treatment at Yabase Oil Field
Commenced commercial operation of the first unit of the Sarulla Geothermal
Independent Power Producer Project in Indonesia

Mar
Apr
Apr
May
Jun
Jun

Sold all shares in INPEX NATUNA Ltd., to PT Medco Daya Sentosa
Established the Domestic Energy Supply & Marketing Division through thereorganization of the Oil & Gas Business Division 2 and Gas Supply & Infrastructure Division
Ichthys LNG Project’s central processing facility (CPF) sailed away from theconstruction site in Geoje, Korea
Established the INPEX Group Human Rights Policy
Sold the participating interest in Block PDL3 in Papua New Guinea to the national oil and gas company of Papua New Guinea
FLNG facility for Prelude FLNG Project sailed away from the construction sitein Geoje, Korea

Drilling wildcat wells at Exploration Block 10 in Iraq

Low-pressure extraction equipment begins operation at Koshijihara Plant,
Minami-Nagaoka Gas Field

INPEX discovers oil reservoir at Exploration Block 10
in Iraq
INPEX launched its first project in the Republic of Iraq
in 2012 with the acquisition of a 40% participating interest in
Exploration Block 10 located 150 kilometers west of the cityof Basra in southern Iraq, through its subsidiary INPEX SouthIraq, Ltd. Block 10 covers an area of about 5,600 square kilometers. In February 2017, INPEX succeeded in discovering
deposits of quality oil through an exploration well drilled at theblock. Crude oil production tests that were subsequently conducted confirmed the discovery of a highly productive oil reservoir with a production volume capacity of more than 8,000
barrels per day. These results suggest a high probability of discovering a large oil field depending on the evaluation results ofadditional exploration activities.
Block 10 is operated by Lukoil Overseas Iraq Exploration
B.V., a subsidiary of Russia’s LUKOIL with a 60% participating interest. INPEX and LUKOIL were successfully awarded
rights to explore Block 10 in 2012 through a licensing roundorganized by the Iraqi government, and signed a 30-year service

contract including a 5-year exploration period and a requirement to conduct seismic surveys and drill an exploration well.
Following the discovery of quality oil deposits through the first
exploration well, a second exploration well was drilled and also
produced positive production test results. INPEX and LUKOIL will conduct further exploration work to study commercial development opportunities.
INPEX commences compressor plant operations at
Koshijihara Plant, Minami-Nagaoka Gas Field, JapanIn April 2015, INPEX began installing a compressor at
the its Koshijihara Plant to increase supply capacity and recoverable reserves at the Minami-Nagaoka Gas Field, one of Japan’slargest gas fields. Following the completion of this installation
work in December 2016, the infrastructure was put into operation in January 2017 and now runs all year round.
INPEX began production operations at the MinamiNagaoka Gas Field in 1984, and the gas field has since become acornerstone of the company’s domestic natural gas business. The

new infrastructure is expected to increase recoverable gas and
2017

31

Jul Strengthened LNG marketing and legal functions
Jul Ichthys LNG Project’s Floating Production Storage and Offloading (FPSO)
Facility sailed away from the construction site in Okpo, Korea
Jul Chubu Electric Power Co., Inc., and Diamond Power Corporation (DPC) decided to supply wholesale electricity to Ueda Gas Co., Ltd., Nagano Toshi Gas
Co., Ltd., and Honjo Gas Co., Ltd.
Aug Established the Gas Business Development Unit in the Global Energy Marketing Division
Sep LNG ship for delivering Ichthys LNG to CPC Corporation, Taiwan was named“PACIFIC BREEZE”
Sep Extended the duration of the production sharing agreement for ACG oil fields
in the Caspian Sea, Azerbaijan by 25 years

Sep Acquired the participating interest in exploration license PL767 located in thewestern Barents Sea, Norway
Oct Transferred the New Business Planning Unit of the Corporate Strategy &Planning Division into a standalone organization and renamed it the Renewable Energy & Power Business Unit
Oct Commenced commercial operation of the second unit of the Sarulla Geothermal Independent Power Producer Project in Indonesia
Oct LNG ship for delivering Ichthys LNG to the INPEX Naoetsu LNG Terminal wasnamed “OCEANIC BREEZE”
Nov Acquired 100% interest in the Exploration Block WA-532-P offshore Western
Australia

Nov Conducted short-term flow tests in the Oyasu region, Akita Prefecture by
Geothermal power generation joint venture established with Idemitsu Kosan
Co., Ltd.
Nov Agreed to increase production capacity from the Upper Zakum Field offshore
Abu Dhabi to 1 million barrels per day by 2024; The concession of the oil field
was extended until the end of 2051
Dec Agreed to extend the duration of the concession for the Offshore D.R. Congo
Block for a period of 25 years
Dec Surrendered offshore Mahakam Block and the Attaka Block in Indonesia

Production facilities at the ACG oil field concession in the Caspian Sea

Fumarolic testing for the Sarulla Geothermal Power Generation Project

Operation started at Sarulla Geothermal Power Generation Plant (2017)

condensate reserves of gas and condensate by about 20%, andto extend the oil field’s production life by about 20 years.
As of March 31, 2018, cumulative production from the
Minami-Nagaoka Gas Field reached 24 billion cubic meters ofnatural gas and, 3.6 million kiloliters of condensate and oil,while the average daily production volume for fiscal year 2017
was 3.78 million cubic meters of natural gas and, 540 kilolitersof condensate and oil.

The ACG oil fields are located in the southwestern Caspian Sea about 100 kilometers east of Baku, the capital of the
Republic of Azerbaijan, and cover an area of about 432 square
kilometers. The oil fields consist of the Azeri Oil Field, Chirag
Oil Field and Deepwater Gunashli Oil Field. During the firsthalf of 2017, the oil fields produced an average of 585,000 barrels of oil per day. With BP as operator, six platform rigs havebeen constructed in the ACG contract area and production
wells and injection wells extend from these platform rigs. Afterthe produced oil is processed at a floating facility, it undergoes
final processing at an onshore facility. International shipping
has become much more efficient thanks to the completion of
the Baku-Tbilisi-Ceyhan (BTC) Pipeline in 2006. The pipeline
links Baku, the capital of Azerbaijan, with Ceyhan in the Republic of Turkey. INPEX has a 2.5% participating interest in
the BTC Pipeline, and also has capacity rights to use the line.
As part of the production sharing agreement extension,
all shareholders in the ACG oil fields, with the exception of
SOCAR, transferred an equal proportion of their participatinginterests to SOCAR. As a result, INPEX’s participating interestin the ACG oil fields decreased from 10.96% to 9.31%. Despite this, INPEX expects the production volume across theentire contract area to increase by more than two billion barrels
over the 25-year extension period, in addition to economic advantages brought on by revised financial terms and conditions.

Production sharing agreement for ACG oil fields in
Caspian Sea, Azerbaijan, extended by 25 years
Since 2003, INPEX has been engaged through its subsidiary INPEX Southwest Caspian Sea, Ltd. in the development
and production of crude oil in the Azeri-Chirag-Deepwater
Gunashli (ACG) oil fields in the Azerbaijan sector of the Caspian Sea, where oil production began in 1997. In September
2017, INPEX and its partners entered into an agreement with
the State Oil Company of the Azerbaijan Republic (SOCAR)
to extend the duration of the production sharing agreement by
25 years until December 31, 2049.
32

Part II First 10 years after merger

Sarulla Geothermal Independent Power Producer
Project commences commercial operations
In 2015, through its subsidiary INPEX Geothermal Sarulla, Ltd., INPEX joined the Sarulla Geothermal Project under
Independent Power Producer (IPP) scheme in the Sarulla Concession in North Sumatra Province, Sumatra Island, Indonesia.
This is world’s largest project of its kind. In addition to being
INPEX’s first renewable energy project outside Japan. The Sarulla initiative is also in line with the company’s Medium- to
Long-Term Vision. As a large scale geothermal development,
it will provide electricity to Indonesia, a country where INPEX
has been conducting oil and gas exploration for many years.
This project is expected to contribute to the economic development of Indonesia.

In this project, INPEX joined Sarulla Operations Ltd., aspecial purpose company established by ITOCHU Corporation, Kyushu Electric Power Co., Inc., PT Medco Power Indonesia, and Ormat Technologies, to construct geothermal power
generation plants with total output of approximately 330 MW.
All electrical power generated will be sold to Perusahaan Listrik
Negara, Indonesia’s government-owned electricity company,
for a period of 30 years.
The construction on the power plant started in 2014. The
first unit commenced commercial operation in March 2017,
and the second unit in October 2017. Both units produce approximately 110 MW of electricity. In May 2018, the third
unit also commenced commercial operation. The total electricity output is now approximately 330 MW, achieving theplanned output, providing enough electrical capacity to power
2.1 million households in Indonesia.

2017

33

2018
Jan Acquired interests in Exploration License PL950 in Western Barents Sea,
NorwayJan Acquired interests in Exploration License for Block 22 (Salina Basin) of thesouthern Gulf of Mexico, Mexico
Feb Acquired the participating interest in the Lower Zakum concession offshore
Abu Dhabi and extended the concession of the Satah and Umm Al Dalkh oil
fields for a period of 25 years
Mar Acquired a 100% participating interest in Exploration Block WA-533-P offshore Western Australia
Mar Commenced Pre-FEED work for the Abadi onshore LNG Project

34

Apr
May
May
May
Jun
Jun

Appointed as Asset Leader for the Lower Zakum Oil Field offshore Abu Dhabi,
UAE
Commenced commercial operation of third unit of Sarulla Geothermal Independent Power Producer Project in Indonesia
Formulated the Vision 2040 and Medium-term Business Plan 2018–2022
Completed all commissioning of Ichthys LNG Project required for the start ofproduction
Takayuki Ueda became the President & CEO
Established Abu Dhabi Project Division and Renewable Energy & Power Business Division

Jul
Oct
Oct
Oct
Nov
Nov

Commenced production in Ichthys LNG Project
Commenced condensate shipment from Ichthys LNG Project
Commenced LNG shipment from Ichthys LNG Project (for Naoetsu)
First LNG carrier from Ichthys LNG Project arrived at Naoetsu LNG Terminal
Commenced LNG shipment from Ichthys LNG ProjectHeld commemoration ceremony for the start of operations and arrival of LNG
from Ichthys LNG Project, in Darwin and Naoetsu
Dec Started production from the production well of the Prelude FLNG Project inAustralia

Drillship for the Abadi 2nd Drilling Campaign in 2002

Appointed as Asset Leader for Lower Zakum Oil Field
Japan-UAE Business Forum (Photo: JETRO)

From left: Chairman Toshiaki Kitamura and President
Takayuki Ueda launching the new organizational structurein June 2018

INPEX acquires exploration licenses in Mexico and Norway
In Norway, INPEX had conducted a series of evaluations
on exploration potential in offshore areas and made approaches
for participation in promising concessions through its subsidiary, INPEX Norge AS, established in 2014. As a result, it acquired a 40% participating interest in September 2017 in the
exploration license PL767, operated by Lundin Norway, being
located in the southwestern part of the Barents Sea offshore of
Norway. In August 2017, INPEX made a joint bid with Lundin Norway on an open area in the western part of the Barents
Sea, and consequently acquired a new license PL950 in January
2018 with a participating interest of 30%. PL950 was the second exploration project for INPEX Norge in Norway.
In Mexico, INPEX, through its subsidiary INPEX E&P
Mexico, S.A. de C.V., teamed up with subsidiaries of US
company Chevron, Energia de Mexico, S de R.L. de C.V. andMexico’s state-owned petroleum company Pemex Exploracióny Producción S.A. de C.V. to make a joint bid in round 2.4
of Mexico’s bidding process for a deepwater exploration concession. INPEX E&P Mexico, S.A. de C.V. acquired the

Exploration Block 22 AP-CS-G03 with a 35% participating interest together with Chevron (operator with 37.5%) and Pemex(27.5%) in January 2018. The block is located in the Salina
Basin in deep water in the southern Gulf of Mexico, and it was
the second block in Mexico for INPEX, after the acquisitionof a 33.3333% interest in Block 3 in the Perdido area in thenorthern Gulf of Mexico in 2016, together with subsidiaries ofChevron (operator with 33.3334%) and Pemex (33.3333%).
This string of exploration block acquisitions helped expanding INPEX’s exploration portfolio in its prioritized exploration areas.

(FLNG) concept, with equipment for treatment, liquefaction,
storage, and offloading of natural gas to achieve annual LNG
production of 2.5 million tons. It obtained approval from theIndonesian government and started front-end engineering anddesign (FEED) work. Because significant increase of gas reserves
was confirmed through appraisal wells drilling, it submitted arevised development plan to the government in 2015 with increased annual LNG production capacity of 7.5 million tons.
However, in April 2016, the Indonesian government requested that INPEX should reconsider development as an onshore LNG scheme. After a series of constructive discussions
with its partner Shell and the government, it was decided todevelop the Abadi Gas Field as an onshore LNG project withannual LNG production capacity of 9.5 million tons. From
March to October of 2018, Pre-FEED (conceptual design)
work was conducted ahead of the FEED work.

Part II First 10 years after merger

Abadi LNG Project enters Pre-FEEDThe Abadi LNG Project is operated by the INPEX subsidiary INPEX Masela, Ltd. which was established for the development and production of the Abadi Gas Field, which was
discovered in 2000.
The Abadi Gas Field is located 150 kilometers off the coastof the Tanimbar Islands, east Indonesia. INPEX Masela, Ltd.
formulated a development plan in 2010 using a floating LNG

First condensate shipment from Ichthys LNG Project at Ichthys Venturer

INPEX appointed asset leader of Lower Zakum Oil
Field offshore Abu Dhabi
In April 2018, INPEX was appointed by ADNOC as theAsset Leader for the Lower Zakum Oil Field where it had a
10% participating interest through its subsidiary JODCO
Lower Zakum Limited. In addition to INPEX’s announcement
in a press release dated April 30, the appointment was also announced at the Japan-UAE Business Forum held on the same
day in the presence of Japan’s Prime Minister Shinzo Abe who
was visiting Abu Dhabi.
Asset Leader is a new system adopted for new ADCO interests. One foreign partner per asset group is appointed to therole and advises ADNOC on development and production of
the assets. The role also entails working closely with the operator of the Lower Zakum Oil Field to achieve production targets, review optimal EOR technologies, reduce costs, transfer
technologies and conduct other work.
INPEX was appointed to this role in recognition of its involvement in oil development and production projects in Abu
Dhabi, and its efforts to resolve a range of technical challenges.
It was the first time that a company other than one of the oil
majors was appointed as Asset Leader for a giant offshore field
in Abu Dhabi.
2018

35

With 45 years’ experience working in Abu Dhabi, INPEX
has been involved in a broad range of technology areas, including regional geology, IOR/EOR (secondary and tertiary
recovery), asphaltene issue, geomechanics and rock physics,
drilling and well completion, oil reservoir characterization andmodeling, production and facilities, development planning andmulti-disciplinary integrated studies. This knowledge and thesetechnologies are INPEX’s strengths. Through fulfilment of its
responsibilities as an Asset Leader, it endeavors to further improve its technical capabilities.
INPEX is also the only international oil company withinterests in both the Lower and Upper Zakum Oil Fields, so
it plans to leverage this position to maximize synergies in thedevelopment of both fields.
INPEX expects to gain greater coordinating and negotiating capabilities by coordinating development plans for these
giant oil fields with ADNOC and the major oil companies as
Asset Leader of the Lower Zakum Oil Field, involved in offshore Abu Dhabi oil development with a complex array of
stakeholders. Specifically, this means putting together Lower
Zakum Oil Field partners (an Indian consortium, China’s
CNPC, Italy’s ENI and France’s Total) and working with theUpper Zakum Oil Field partner (ExxonMobil) to discuss thesynergies between the two oil fields.
Ichthys LNG Project celebrates operationalcommencement
The Ichthys LNG Project, which INPEX is undertaking
as operator, commenced production of gas from the wellheadin July 2018 following the completion of final safety verifications. Shipments of offshore condensate (ultra-light crude oil)from the floating production, storage, and offloading facility(the Ichthys Venturer) started in early October 2018. In addition, the long-awaited first shipment of LNG from the onshore
LNG liquefaction plant in Darwin began in late October 2018.
This first shipment of LNG was delivered to the Naoetsu LNG
Terminal operated by INPEX in Niigata Prefecture in Japan at
the end of October, organically linking the company’s LNG
development business overseas to its gas distribution network
in Japan. Shipments of LPG from the onshore gas liquefaction
plant in Darwin started in mid-November.
To celebrate the Ichthys LNG Project’s smooth startup
36Part II First 10 years after mergerof operations, the Ichthys LNG Production Commencement
Ceremony was held at the Darwin Convention Center on November 16.
The ceremony was attended by about 400 individuals including Prime Minister Shinzo Abe of Japan, Prime Minister
Scott Morrison of Australia, Minister of Economy, Trade andIndustry Hiroshige Seko of Japan, Minister for Resources andNorthern Australia Matthew Canavan, Chief Minister of theNorthern Territory Michael Gunner and other government officials from both countries as well as the buyers of the LNG and
LPG produced from the project, financial institutions involvedin project financing, project partners, members of local communities, other project stakeholders and INPEX directors andemployees. At the ceremony, the participants celebrated the commencement of operations of the Ichthys LNG Project positioned
as a symbol of the cordial relations between Japan and Australia.
Prior to the ceremony, Minister of Economy, Trade andIndustry Hiroshige Seko of Japan, Minister for Trade, Tourism
and Investment Simon Birmingham, Minister for Resources
and Northern Australia Matthew Canavan of Australia, andMinister for Primary Industry and Resources Kenneth Vowlesof the Northern Territory participated in a plaque unveiling
ceremony officially marking the startup of operations of theIchthys LNG Project’s onshore gas liquefaction plant. The
plaque was unveiled by Ministers Seko and Birmingham to theapplause of the many INPEX workers and others in attendance.
The plaque is inscribed with the names of all the Japanese andAustralian ministers in attendance and will watch over operations at the plant site for the next 40 years and beyond.
Meanwhile, another ceremony was held on November 29
in Joetsu City, Niigata Prefecture, where LNG from the first Ichthys LNG tanker was received at the Naoetsu LNG Terminal,
to celebrate the offtake of LNG from the Ichthys LNG Project.
The event was attended by project stakeholders including
Ryo Minami, Director-General, Natural Resources and Fuel
Department, Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry (METI), His Excellency
the Honourable Richard Court, Ambassador of Australia toJapan, Noboru Ohno, Director-General of Regional Development of Joetsu City, Niigata Prefectural Government Office,and Hideyuki Murayama, Mayor of Joetsu City. Also present
were natural gas customers based in Japan.

The event included the screening of a video featuring thehistory of the Project beginning with INPEX’s acquisition of
the offshore exploration permit and ending with the arrivaland unloading of the Project’s first LNG cargo at the Naoetsu
LNG Terminal. The event served as a demonstration to Projectstakeholders of INPEX’s significant step toward the development of a global gas value chain business.
Following the commencement of LNG shipments in October 2018, LNG production at the Ichthys LNG Project will
gradually increase and will reach a plateau production volume
of approximately 8.9 million tons per year, which is equivalent to more than 10% of Japan’s annual LNG imports. (Initialplans at FID consisted of producing 8.4 million tons per year,
but following a review in September 2015, the production output target was increased by approximately 6%). The Ichthys
LNG Project will also produce approximately 1.65 million tonsof LPG per year as well as 100,000 barrels of condensate per
day at peak.

Ichthys LNG Project Production Commencement Commemorative
Ceremony
From left: INPEX Chairman Toshiaki Kitamura, Chief Minister of theNorthern Territory Michael Gunner, Prime Minister Scott Morrison of Australia, and Prime Minister Shinzo Abe of Japan

Full-page advertisement in the Nikkei Newspaper (November 16, 2018)

Ceremony held to commemorate receipt of LNG from the Ichthys LNG Project

Ichthys LNG Project Production Commencement Commemorative
Ceremony
Hiroshige Seko, Minister of Economy, Trade and Industry in Japan (thirdfrom left) takes the lead in breaking open the ceremonial sake barrel

2018

37

Feature

1

INPEX, bringing forth
the bounty of Ichthys

From the northwest continental shelf of Australia, at
the turn of a new century, gradually expanding ripples werebeing created. An ancient fish more than 10 meters long was
brought to the peaceful surface of the sea. Slowly, over the
18 years since this gas and condensate field was discovered,
the bounty of those ripples has now reached Asia and Japan.
The story of “Ichthys,” of this magnificent ancient fish,
started from a single challenge.

Discovery of the Ichthys Gas-condensate Field
The Ichthys story started 12 years after the arrival of theformer INPEX in Australia in 1986. During that period, theformer INPEX managed to discover several oil fields and begin
production on the northwest continental shelf of Australia,
which includes the Timor Sea, through joint projects with BHPPetroleum (currently BHP Billiton) and other operators.
Through these various projects, the former INPEX had
independently evaluated the area of offshore Western Australia
as having further potential for exploration. Then, in 1998, theLocation of the Ichthys Field

Contract area 2018 (left) compared to the original acquisition in 1998 (right)

38

Part II First 10 years after merger

Mixed Japanese/Australian team at Perth Office, Level 17, Central Park Tower(January 1999)

Australian authorities opened up the 5,000 square kilometers
WA-285-P Block, which was an area they had kept closed formany years.
Acquiring this block would give a boost to the company’sbusiness expansion in Australia, as well as an excellent opportunity to consolidate its presence in the country. At that time,
the company was expanding its businesses in other regions as
well, and had to strive to overcome staff shortage and spread
exploration risk. Based on its own evaluations, the company
attempted to enlist the major oil companies in joint bidding
proposals but failed to reach agreement. After deciding to makean independent bid, the former INPEX was awarded the blockin August 1998. With both expectations and uncertainties, thiswas the company’s first challenge to take on an exploration operatorship outside of Indonesia.
To overcome the staff shortage, the company sourced
local staff in Perth by using the local network it had built up
over more than 10 years of joint projects. While preparing toopen up its regional office, the company applied to the government and other relevant authorities for licenses and approvals.
As a result, two-dimensional seismic surveys were successfully
conducted in the block the same year. Through analysis of the
newly acquired seismic prospecting data, three potential prospects were confirmed as candidates for obligatory test drilling
work as independent structures in the northwestern part of theblock. While starting the drilling preparation works in 1999,
the company vigorously pursued the option of farming out*some of the work to major oil companies as an attempt tospread risk. Unfortunately, no company followed the option
this second time either.
From March 2000, exploration activities continued bydrilling three exploration wells in the prospects. Praying for the
successful discovery of a large-scale oil and gas field, the company named the wells “Dinichthys,” “Titanichthys,” and “Gorgonichthys” after the scientific names of giant fossilized fishes.

Sedco 703 drilling rig in operation at “Dinichthys-1,” the first exploration well drilled during the first round of drilling

Drill stem test at first exploration well

Production tests were conducted on the first well, “Dinichthys-1,” with a successful production of large volumes of gas
and condensate. Then, the following two test wells recorded
even greater volumes of production, so the wells lived up to
their names.
* To reduce capital burden, owners of exploration and development rights may retainpart of a concession for themselves and transfer the remaining portion to others.

The prospects were originally expected to be independentof each other. However, after analyzing the geological featuresof the exploration wells, geophysical logging and drill stem test
(DST) data, the former INPEX decided that the three structures could very likely be part of a single giant structure. Afterthe success of the exploration wells, three-dimensional seismic
surveys were conducted in 2001 to ascertain the size of the giant
structure. At the same time, various geological evaluations werecarried out, including the analysis of core samples from thethree exploration wells, and an integrated interpretation was
Feature 1: INPEX, bringing forth the bounty of Ichthys

39

conducted. As a result, the company came to the conclusionthat there probably were commercial quantities of gas and condensate lying in that giant structure. Then, in 2002, the structure was named “Ichthys” the suffix in the names of all threetest well, which on its own means “fish” in Greek language.
A second drilling round commenced in June 2003, withthree exploration wells being drilled. As expected, all three wells
were successful, which confirmed the continuous nature of thereservoir. This clarified the presence of a giant underground gas
and condensate field that could be commercially developed.
The former INPEX then applied to the Australian government
for permission to investigate commercialization of the giant gas
and condensate field and other regions. Authorization was received in May 2004.

Wanting to develop on its own
In 2000, the year of the Ichthys’ successful exploration
drill, the former INPEX was conducting exploration projects
as an operator and discovered the giant Abadi Gas Field in the
Masela concession in Indonesia, and confirmed the extent of
the gas and condensate reservoir. The company was faced witha difficult internal management decision—how to develop thetwo giant gas and condensate fields of Ichthys and Abadi thatwere discovered at the same time. After through consideration,
the company realized the importance of the concept of liquefying the production gas for sale as LNG. However, this concept
involved the construction of production wells, offshore facilities, pipelines, and gas liquefaction plants, and this required
an enormous investment. Despite listing on the First Sectionof the Tokyo Stock Exchange in November 2004, the former
INPEX only had consolidated sales of 218.8 billion yen anda workforce of 269 employees, which fell short of the humanresources and capital required.
On the other hand, other companies which had heardof the large-scale gas and condensate field discovery did approaches to obtain a partial interest in Ichthys and even the roleof development operator. However, the former INPEX did notchoose that road and, being already involved in oil and gas development business, it naturally had a strong desire to develop
and produce on its own this giant field that it had so painstakingly found by itself. Additionally, the successful development
and production of Ichthys field would give the company a solid
track record as an international operator, which would in turnincrease the possibility of obtaining new development concessions. Up to that point, the former INPEX had participatedonly as non-operator in many exploration and development
40

Part II First 10 years after merger

projects, but it had learned and acquired knowledge from othermajor and large independent oil companies. In other words,
the former INPEX chose the road that offered the most growth
as a development and production operator.

But the road to development was not easy
Before producing LNG, an LNG plant for processing andliquefying the gas had to be constructed. From estimated reserves at Ichthys, the company forecast expected production of
millions of tons per year. This meant that a large facility would
be needed, as well as a large construction site.
In 2005, the local Perth Office started to consider in detailthe options of development concepts and conceptual designs,
including construction site candidates for the LNG plant, in
continuation to the work already started in 2002. Because theconstruction of an LNG plant has an enormous financial andenvironmental impact on the surrounding area, the agreementof local governments and residents was essential. Australia inparticular has considerable respect for environmental sustainability and for the rights of indigenous Australians. Careful investigation from many perspectives was needed, in addition to
studying the technical and economic effects of developing thepotential site candidates. As such, narrowing down the numberof site candidates was not easy.
At the same time, the gas division of the former INPEX
started marketing activities in Japan to secure buyers for its
LNG. To successfully raise a large amount of funds and investment return, the company had to secure long-term LNG
buyers in advance. This was necessary to fulfil the conditions
for the final investment decision (FID). With this in mind, themarketing unit started reaching out to potential buyers such as
Japanese electricity and city gas companies. However, due tothe oversupplied market, Japanese buyers were taking a cautious approach to procuring LNG by signing a new contract.
Therefore, meetings with buyers did not go as smoothly asplanned.

Gaining support and beginning the journey
The former INPEX was determined to develop the field
on its own, and had made progress with difficulty throughtrial and error. But then some powerful partners arrived. With
the establishment of INPEX Holdings, Inc. in April 2006, thecompany acquired the support of Teikoku Oil, which had operation experience both in Japan and overseas.

Additionally, the successful execution of the project also
required the participation of major oil companies with financial strength, abundant experience in LNG technologies, andinvolvement in many global LNG projects. As a result of theselection process, joined the Ichthys LNG Project in August
2006 with a participating interest of 24%. The former INPEX
had already been involved with Total through various projects,
including the Offshore Mahakam Project in Indonesia. With
Total’s participation, this project was able to make a giant leap
forward.
Concurrent with these changes, the Department of Industry, Tourism and Resources of Australia stated that they
expected the development of Ichthys to contribute to the economic development of Australia for many years. The project
was granted Major Project Facilitation status, which provided
support for fast-tracking the necessary licenses and approvals
from the federal government, state government, and related
local authorities.
The former INPEX head office also established an internal Ichthys Project Division to connect the overseas site andhead office departments. It served to advance and manage theproject, and to provide business support, which completed acompanywide structure to promote the development.
There were also important moves in the site selection activities for the LNG plant. With the Perth Office pushed in all
directions, the Northern Territory government hoped to attract
the LNG plant to Darwin as one of the potential construction site candidates in November 2007. Darwin had the drawback of being located about 900 kilometers from Ichthys field,
which meant increased costs associated with the pipeline, but
it had environmental, and infrastructure advantages over othersites. After giving the matter detailed consideration, the former
INPEX decided that constructing the LNG plant in Darwin was
the best among a number of possible options. After coordinating with all parties, the company signed a Project Development
Agreement (PDA) with the Northern Territory government inJuly 2008. The agreement was for long-term land use and othermatters, and then in September 2008, it made the formal decision to construct the LNG plant in Darwin.
Then, in October 2008, after merging into the current
INPEX Corporation, INPEX laid out the organizational structure for the Ichthys LNG Project. In January 2009, front end
engineering design (FEED) work started and project development got into full swing.

FEED work includes series of thorough investigations
Between 2007 and 2008, an additional two wells were
drilled at Ichthys and INPEX gained a deeper understandingof the breadth and other characteristics of the gas reservoir. In
2010, three-dimensional seismic surveys of the area were conducted, and the latest available technique were used to understand the finer details of the Ichthys field structure and to form
the base of Ichthys field development planning thereafter.
INPEX applied this data to the FEED work it had commenced in 2009 to investigate a range of development methods
and optimal production volumes. It then used the results todetermine actual specifications for the production wells, thesubsea production facilities, the offshore production, processing and offloading facilities, the subsea pipeline, and the LNG
plant. At the same time, it started the process toward selecting
an engineering, procurement, and construction (EPC) contractor who would do the actual construction work of the facilities.
While the FEED work was progressing, INPEX thoroughly investigated other previous projects in addition to
conducting the basic design work and risk analysis. The investigation included several case studies on schedule delays and cost
overruns that actually occurred with large-scale LNG projects
in the past. In light of that, company specifications were carefully produced for their use in the tendering processes to selectan EPC contractor for each package. From the end of 2010,
cost, quality (technical capability) and procurement evaluations
were conducted to select EPC contractors. This was done incooperation with head office specialist resources, for coordination/negotiation with the EPC contractors. As a result, EPC
contractors that were highly reliable in Japan and overseas wereselected. INPEX then worked carefully with the contractors tolook at the FEED results and prepare for the FID.

Additional well drilled to confirm the finer details of the Ichthys Field structure

Feature 1: INPEX, bringing forth the bounty of Ichthys

41

Briefing for local residents in Darwin

Approvals acquired for FID
In addition to technical and economic verification of thedevelopment plan, there were three critical matters for the final
investment decision (FID): 1. acquiring licenses and approvals
from government, 2. raising funds, and 3. securing buyers.
The basic requirement for acquiring environmental approvals was that construction of the large LNG plant did not
negatively impact the natural environment or local communities. Environmental examination began with the delivery of theresults of an environmental impact study to the government inApril 2010. INPEX took the local situation into considerationand the examination included an eight-week public review process. This was twice the legally-mandated period and, in addition, a briefing was held in Darwin to gain the understanding of
locals, as well as to conduct an extensive gathering of opinionsfrom local residents. Thanks to the careful way the process washandled locally, the Northern Territory environment minister
granted approval in May 2011, with the federal government environment minister following suit in June 2011. INPEX thencontinued the process of getting the agreement of local residents.
From a survey conducted, more than 80% of residents who knew
about the Ichthys LNG Project were in favor of the project.
Licenses for laying the gas export pipeline from the Ichthys
Field to Darwin were received from each administrative jurisdiction in May 2011. In April 2011, together with the submissionof the concession development plans, INPEX also applied to
the Australian federal government and Western Australian government for production licenses in the Ichthys Field, and thenreceived the production license offer in November of that year.

Capital increase and project financing
Raising a large amount of funds was another big challenge
when developing Ichthys project. INPEX had to strengthen
its own financial position to obtain the massive bank loans it
42Part II First 10 years after merger

needed to carry out this upstream development project involving a considerable number of uncertainties. In August 2010,
the company increased its capital by about 520 billion yen
through a public offering.
Despite being one of the largest capital increase in theTokyo stock exchange market at that time, and some existing shareholders being critical in a dilution of share price, themanagement team visited and explained to investors in Japanand overseas to convince them that the development of Ichthys
would contribute to increase profits in the future and greatly
enhance share price value, and, as a result, INPEX managed toraise funds mostly as planned.
Improving its consolidated capital account from about 1.4
trillion yen as of March 31 2010 to about 2 trillion yen as ofMarch 31 2011, INPEX was able to secure the equity capitalfor developing Ichthys project and achieve a stronger financial
position necessary for obtaining the massive bank loans.
Next, the company focused its efforts on obtaining
non-recourse financing* through a large international syndicate. INPEX had experience acquiring corporate loans fromJapanese banks, such as Japan Bank for International Cooperation (JBIC) or Japan’s three megabanks, with JOGMEC and
INPEX’s guarantees. However, because of the immense size of
Ichthys investment, a level of financing was required that Japanese banks alone could not cover. Therefore, INPEX neededa scheme whereby it would borrow jointly with Total inviting
overseas banks as well.
* Non-recourse financing: A loan where the repayment is made out of project cash
flow only with security over the project assets, so that lenders are not entitled torecourse to sponsors (parent companies).

Luckily there were no country risk concerns with Australia, and shareholders (partners), INPEX, Total and the various
utility companies buying the LNG had all excellent creditworthiness. The forecasted earnings from LNG were solid, and theprice of oil at the time was high. For all these reasons, INPEX
sought a financing method based on future cash flow from
Ichthys LNG Project being used for repayments. Preparations
started in 2009 and included many meetings with Total, financial advisors, and lawyers. The initial talks were with JBIC,
the biggest potential lender which required relatively stringent
conditions. The project was also presented to Nippon Export
and Investment Insurance (NEXI), JOGMEC, overseas export
credit agencies, and Japanese and Australian banks capable ofproviding large loans. After preparing a full set of documentson the project, serious negotiations with the financial institutions began in April 2011.
Unlike corporate financing, with shareholders guaranteeing

the debt, in project financing the lending institution carries therepayment risk once the completion guarantee is released. For
this reason, INPEX was hit with a barrage of questions from financial institutions around the world who wanted to analyze theproject risk. The Finance Unit set about answering the questions
with the cooperation of external advisors in a range of fields, inaddition to internal engineers and field experts. In May 2012,
INPEX launched a syndication putting together major terms
and conditions, and received finance amounts and interest offers from banks. Terms and conditions were further negotiatedwhile completing a massive amount of work on documentationof agreements. Finally, in December 2012, finance-related agreements were signed for the unprecedented total amount of 20 billion US dollars, from eight Japanese and overseas export credit
agencies and 24 commercial banks.

contractors take responsibility for any loss or damage to the facility and equipment during construction, they sought a broader
range of indemnities in the construction insurance arranged by
INPEX. The insurance capacity required for the Ichthys LNG
Project was on a scale never seen before in the insurance industry. To see whether the construction insurance conditions agreed
with the EPC contractors could really be arranged, INPEX
reached an agreeable compromise with the contractors under advice from insurance consultancies. It took a long year or so after
obtaining the FID. But at the end of 2012, INPEX succeeded inarranging construction insurance terms that the EPC contractors
agreed with through the participation of more than 50 insurancecompanies from the insurance markets of London, Tokyo, Singapore, Australia, and the Middle East.

FID obtained with everyone’s cooperation
Despite an adverse situation, INPEX secures buyers
through ongoing serious dialogue
Gas Business Unit was going through difficulties to secure LNG buyers, which was another requirement for the FID.
Due to the global financial crisis of 2008, the LNG demand
forecasts were revised downward and, therefore, domestic buyer
requirements became even stricter than ever before. With thedifficulty of finding enough domestic buyers for the entire production, INPEX started communications with buyers overseas
in mid-2010. Despite the regular visits and close communication with domestic and overseas buyers, it was tough to reachthe stage of negotiating detailed terms and conditions.
In the beginning of 2011, INPEX finally received a concrete counteroffer from one buyer, which triggered progress indiscussions with other buyers and drew closer to agreements.
On such occasion, in March 2011, the Great East Japan Earthquake struck Japan. Due to this unprecedented event, the negotiations were almost stalling again, but INPEX marketing
unit continued sincere dialogue with buyers. Finally, at the endof June 2011, INPEX succeeded in reaching basic agreementswith 10 buyers. By the time of FID in January 2012, the company had already signed long-term LNG sales and purchaseagreement for the full production.

Arranging the largest ever construction insuranceWith the help of its Logistics & Insurance Unit, INPEX
negotiated the details of construction insurance, needed after
obtaining the FID, with the EPC contractors. Because EPC

The final investment decision drew near over the period
from the end of 2011 to January 2012. Busy with final confirmations and checks of FID prerequisites, relevant departments
in INPEX’s Tokyo and Perth offices were also extremely busy
preparing for a quick start to work after obtaining the FID.
INPEX adjusted the pace of progress in various areas, including making EPC preparations, completing financing, arranging
sales contracts, arranging insurance, and assigning interests to
LNG buyers. These, and the timing of the FID, were both extremely critical, so departments in charge frequently gathered
for detailed meetings and coordination.
Licenses and approvals were obtained or secured, andwhile project financing was not yet obtained, financial institutions had expressed their willingness to lend. Long-term 15year LNG purchase agreements were entered into with buyers,and basic design documents were completed after FEED andsubsequent EPC preparations were completed. Terms and conditions of EPC contracts for LNG plant construction, offshore
production facilities, gas export pipeline, and other facilities
were also negotiated with major domestic and foreign companies. Agreements were signed, at which point preparations
for starting the EPC work were complete. With prospects also
looking good for the supply base, personnel transport, and insurance arrangements, the timing was ripe.
In January 2012, INPEX obtained the FID for the Ichthys LNG Project, the long-awaited first time for a Japanesecompany to lead an LNG development operatorship of thisscale. The decision was also the result of company-wide efforts
that seemed to leave no employee without some involvement in
the project. At last, development work on this massive projectFeature 1: INPEX, bringing forth the bounty of Ichthys

43

started making concrete moves toward its planned annual production of 8.4 million tons of LNG and about 1.6 million tonsof LPG, and 100,000 barrels of condensate per day at its peak.
Then President & CEO Toshiaki Kitamura emphasizedthat the FID was only a checkpoint in the development process: “From the perspective of the overall project, the final investment decision for Ichthys was just a single milestone, eventhough the process required unwavering resolve while staking
the future of the company. From the planning stage, we had
progressed to a new starting line where we had to actually
begin, and complete, construction of some of the largest production facilities and equipment in the world.” Mr. Kitamura
then spoke of the importance of the development work: “Theperiod prior to production was an important time that really
put us to the test as an operator.”

Final investment decision (FID) ceremony

Design and construction work begins around the world
With the FID obtained, INPEX signed a series of EPC
contracts for onshore and offshore facilities and started detailed
design and construction work for each facility at more than 10
sites throughout Europe, America, and Asia (the development
concept and an outline of structures manufactured around theworld are shown on pages 46–47). With the giant production
facilities comprising everything from production wells to liquefaction facilities, works began on the various work packages
for drilling, subsea production systems (SPS), umbilical, riser
and flowline (URF), the central processing facility (CFP), thefloating production, storage and offloading (FPSO) facility, thegas export pipeline and the onshore LNG plant.
In May 2012, INPEX held a groundbreaking ceremony
for the Darwin LNG plant. Guests at the ceremony included
Prime Minister Julia Gillard and the Resources, Energy and44

Part II First 10 years after merger

CPF and FPSO onsite
Subsea wellhead assembly installation operations
LNG plant groundbreaking ceremony
Left: INPEX Chairman Naoki Kuroda
Center left: Australian Prime Minister Julia Gillard
Center right: Northern Territory Chief Minister Paul Henderson
Right: TOTAL E&P Australia Managing Director Mike Sangster

Tourism minister from the federal government, and the Northern Territory chief minister. Many government dignitaries also
attended from Japan, showing the high expectations that eachcountry had for the project. The first stage of construction for
the LNG plant was large-scale civil works, followed by preparations for large-scale construction. For this, lodgings had tobe constructed on the outskirts of Darwin for a 3,500-strong
workforce. The LNG plant was constructed using a modular
construction technique, so construction of the various LNG
modules started at four yards in Thailand, China, and the Philippines. From August 2012, dredging work was also conducted
at Darwin Port for a period of about two years. Despite original
concerns that underwater blasting would be needed to remove
hard rocks—and this greatly impacts the marine environment—a state-of-the-art cutter suction dredger was successfully
employed to remove the material.

FPSO groundbreaking ceremony

In January 2013, a CPF construction keel-laying ceremony
was held at Samsung’s shipyard in Korea. As a core facility, the
CPF is one of the world’s largest offshore facilities for separating
gas and liquids such as condensate out of production from the gas
and condensate fields. In June 2013, a keel-laying ceremony was
also held for the FPSO, another core facility where liquids fromthe CPF are further separated to produce condensate for storageand offloading to tankers. It took place at the shipyard of Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME),
also in Korea, and construction work got into full swing.
With building and construction work proceeding well, thehalfway mark was reached in Darwin LNG plant constructionin June 2014 and then from July the modules manufactured in
the various yards were brought in and installation started. Meanwhile offshore, two drilling rigs were brought in in February
2015 and drilling of 18 Phase 1 production wells started into thegas and condensate reservoir between 4,000 and 4,500 metersbeneath the seabed. Then work to lay the gas export pipeline,
which measures about 890 kilometers in total length, kicked off
in June 2014, and was completed in November 2015.
In September 2016, the final three of 230 modules manufactured in the yards was brought into Darwin and installed. At
the same time, work was continuing on construction of otherfacilities, including LNG, LPG and condensate tanks, the highthermal-efficiency combined-cycle power generation facility,
product shipping berths, and office buildings. In March 2018,
after carefully completing commissioning, preparations for the
first LNG plant train to start production were finalized. Prior tocompletion though, in September 2015, INPEX revealed that
LNG production capacity was expected to increase from theinitial plan of 8.4 million tons per year to 8.9 million tons.
The construction of CPF and FPSO was completed in
February 2017, and the facilities were named Ichthys Explorer

Panoramic view of onshore LNG plantand Ichthys Venturer, respectively. Ichthys Explorer departed
Korea in April 2017 bound for Australia, and arrived at Ichthys
field in May. Ichthys Venturer then arrived in August, and bothfacilities were installed in their offshore locations.
After that, commissioning work picked up pace ahead of
the start of production. Although troubled by issues including
bad weather from cyclones and the always-complicated commissioning work, the FPSO was ready for production in March
2018, followed by the CPF in May. Incidentally, during 2015,
INPEX had more than 2,200 employees engaged in EPC workfor Ichthys project at locations all round the world.

First ship sets sail on a new era for INPEXWith all facilities ready by July 2018, the production
wells were at last able to be opened to start producing gas. All
upstream facilities were carefully started up in order, startingfrom the CPF, using produced gas. LNG production was thenstarted at the LNG plant, and the first condensate cargo wasshipped from the FPSO on October 1.
Feature 1: INPEX, bringing forth the bounty of Ichthys45

Finally, on October 22, the first ship bound for Japan, the
LNG tanker PACIFIC BREEZE, was loaded with LNG, and departed from Darwin. Twenty years after acquisition of the exploration concession in 1998, 18 years after discovery of the gas andcondensate field, and six-and-a-half years after the final investment decision, the long-awaited first LNG cargo had shipped.
After about one week at sea, the LNG tanker appearedout of a rainbow-spanned sea on the morning of October 31
and, under the watchful eyes of the Naoetsu LNG Terminal
operators, pulled alongside the pier and unloaded its cargo of
Ichthys LNG to onsite tanks. After regasification, the LNG wastransported by pipeline to domestic consumers.
Chairman Toshiaki Kitamura attended the November 16
ceremony in Darwin to commemorate the commencement ofoperations for the Ichthys LNG Project, where he thanked everyone for their support, including representatives of the governments of Japan and Australia, members of the local communities,
Ichthys LNG buyers, financial institutions, joint venture partners and contractors. He explained that mutual bonds and trust
were the main driving force behind the Ichthys LNG Project todate, and that he would take all possible measures to achieve aquick ramp-up to peak production and safe operations. He also
expressed his wish to contribute over the coming 40 years to astable energy supply to Japan, and to the economic and social
development of the Northern Territory and the rest of Australia.
During the EPC work, INPEX experienced a range ofdifficulties, from staff shortages stalling progress to sudden
withdrawals of subcontractors, poor workmanship discovered
during construction and commissioning, difficult negotiations

with contractors about contract interpretations, and division of
responsibilities, and ongoing coordination with joint venture
partners. With reflection back on that time, it is possible thatany one of those issues could have affected the success or failureof the project. All stakeholders, institutions, and organizations
joined forces to apply extraordinary effort and exertion to overcome these difficulties, until they finally managed to secure thestart of production.

Major construction and instruction works around the world
Thailand
LNG plant module fabrication

United Kingdom (Aberdeen)
SPS manufacturing

China
Main pipe rack module fabrication

EpilogueWith a burning passion to bring forth the bounty of Ichthys by itself, INPEX took on a great challenge at the start ofthe 21st century. Now INPEX has reached this milestone, an
important challenge to achieve 40 long years of stable operation
lies ahead. It is only by meeting this challenge that INPEX will
be considered a fully-fledged development and production operator. The path will be long, but it will also be an opportunity
to demonstrate the true value of the company.
On the other hand, the bounty of Ichthys is not just evident in high asset values, but also in the development of anability to support the company into the future. From before
Ichthys FID and through the EPC work, young employees
from every department at INPEX, from administration toengineering, have been thrust to the frontline of active operations. They have gained experience alongside veteran employees
at the local Office and at worksites. Working valiantly on thefrontline of Ichthys and tackling difficulties as they arose has
been an ideal opportunity for young employees. They acquireda broad range of necessary knowledge
and experience, expertise, and communication skills as true oil men andwomen. In this way, capable young
INPEX employees will be able to fly off
to new ventures after Ichthys to pass ontheir experience and knowledge to others. The capabilities developed throughIchthys will certainly become the driving force for unlocking the future for
INPEX.

1

2

3

South Korea
CPF and FPSO construction

2

3

4

5

1

8
6
7

OnshoreOffshore
Drilling

4

Indonesia
URF facility fabrication and GEP pipe storage

Ichthys Field
Production well drilling

Philippines
Electrical instrument module fabrication

7

5

Australia (Darwin)
Gas liquefaction plant construction

8

Project Development Concept

46Part II First 10 years after merger

6

Feature 1: INPEX, bringing forth the bounty of Ichthys

47

Feature

2

Bonds of trustwith Abu Dhabi leadto a bright future

The Emirate of Abu Dhabi, in the United Arab Emirates, is home to some of the largest oil fields in the world. In
May 2004, INPEX made Japan Oil Development Co., Ltd.
(JODCO) into a wholly owned subsidiary, inheriting the oil
development and production business that JODCO had been
conducting in Abu Dhabi for more than 30 years since 1973.
JODCO reached 2 billion barrels of cumulative crude oil
lifting in April 2004, one month prior to joining the INPEXGroup, having contributed significantly over many years toJapan’s energy security as a Japanese oil developer. Following
its acquisition of JODCO, INPEX continued to work with its
partners on oil fields under development located in the vicinity
of ones already in production, and succeeded in commencing
oil production at the Umm Lulu and Nasr oil fields between
2014 and 2015.
Through JODCO, INPEX has since been further expanding its footprint in Abu Dhabi by acquiring new concessions
and extending existing ones as part of its mission to contribute to meeting the energy needs of Japan over the long-term.
The Abu Dhabi authorities have adopted a strategy of selecting
genuine partners in the upstream domain committed to participating in diverse projects that will contribute to enhanced
economic and social development in the UAE. In light of this,INPEX has worked hard to further strengthen its multi-faceted
relationships with ADNOC and other key stakeholders in Abu
Dhabi to secure and maintain its oil concessions.

Technical strengths a decisive factor in the extensionof the Upper Zakum concession
In 1978, INPEX began developing the Upper Zakum Oil
Field in partnership with Abu Dhabi National Oil Company(ADNOC), and started production in 1982. The oil field’s

Ceremony affirming the agreement to increase the Upper Zakum Oil Field’s
production capacity to 1 million barrels per day by 2024 (Photo: ADNOC)
INPEX President & CEO Toshiaki Kitamura (right) with ADNOC CEO Dr. Sultan
Ahmed Al Jaber (center) and ExxonMobil CEO Darren W. Woods (left) (November 2017)

48

Part II First 10 years after merger

production capacity continued toincrease thereafter, reaching the
550,000 barrels per day threshold,and the Upper Zakum Oil Field became one of Abu Dhabi’s principal
oil fields.
In March 2006, ExxonMobil
acquired a 28% stake in the Upper
Zakum concession from ADNOC
and proceeded to conduct a redevelopment study. ExxonMobil thenmade a proposal to increase theoil field’s production capacity to
750,000 barrels per day through exAbu Dhabi oil fields (INPEX participation)tended reach drilling from artificial
islands. INPEX leveraged its experience working in the Upper Zakum
its relations with ExxonMobil, which was prepared to pull out
Oil Field to contribute to the disof the project altogether if necessary.
cussions on the ExxonMobil-led development proposal.
Today, INPEX continues to work with ADNOC and ExxDuring this process, INPEX also pursued a further extenonMobil on the plan to increase the Upper Zakum Oil Field’ssion of the concession period and a revision of the fiscal terms
production capacity to 750,000 barrels per day using an inthat would ensure adequate returns on the enormous additional
novative artificial island-based development combined withinvestment required. INPEX considered these items to be preextended-reach drilling technology. The three companies also
requisites for the production capacity enhancement project toreached an agreement in November 2017 to further increase
go forward, and negotiated its proposal alongside ExxonMobil
the oil field’s production capacity to 1 million barrels per day bywith Zakum Development Company (ZADCO), the operat2024, resulting in a further 10-year extension of the concession
ing company of the oil field.
until December 2051.
With a positive response from ADNOC, an agreement
was reached in January 2014 that included an improvement
to the fiscal terms and an extension of the concession period
Participating interest in ADCO Onshore Concession
by more than 15 years, from March 2026 to December 2041.
acquired through successful bid
During the negotiations, INPEX had to carefully steer thechallenging discussions to maintain the good relations it had
With the 1939 onshore concession expiring in January
built up with ADNOC and Abu Dhabi, while also considering
2014, the Abu Dhabi government decided to grant a combined
40% interest in a new, 40-year concession through an international bidding process. At the time of INPEX’s acquisition of a
5% participating interest in April 2015, the ADCO Onshore
Concession, as it was known then, produced about 1.6 million
barrels of oil per day and was one of the world’s largest deposits
of oil, consisting of 11 onshore oil fields in production and fourthat remained undeveloped.
The Abu Dhabi onshore concession originally began in
January 1939 after the Ruler of Abu Dhabi granted Petroleum
Development (Trucial Coast) Ltd. a 75-year concession agreement to explore and develop petroleum in Abu Dhabi. Fullscale exploration activities began after the end of the Second
Upper Zakum Oil Field
World War. Thereafter, following the discovery of a number of
Feature 2: Bonds of trust with Abu Dhabi lead to a bright future49Abu Dhabi offshore oil field concessions acquired andextended amid tough competition

Abu Dhabi Onshore Concession production facilities

oil fields including Bab, Bu Hasa, Asab, Shah and Sahil, development work led to the production and exportation of Murban
crude.
Petroleum Development (Trucial Coast) later changed its
name to Abu Dhabi Petroleum Company (ADPC). As natural resources nationalism grew around the world in the years
that followed, ADNOC acquired a 25% interest in the concession in 1973, which was then raised to 60% in 1974. ADPC
was restructured in 1978 to become Abu Dhabi Company for
Onshore Oil Operations Ltd. (ADCO), thereby bringing theconcession’s operatorship under the control of an Abu Dhabi
company, much like the Emirate’s offshore concessions. Thus,
the Abu Dhabi onshore concession became known as the
ADCO Onshore Concession.
At this point, Murban oil accounted for about half of Abu
Dhabi’s total oil production, and Japan was one of the world’s
largest importers of the grade.
When the ADCO Onshore Concession opened to international bidding, INPEX decided to participate in the bidding
through JODCO. INPEX submitted its pre-qualification documents in mid-2012 and was pre-qualified in early 2013, at
which point the bidding process began. INPEX presented its
bidding documents at the end of 2013, after which there werebriefings and due diligence conducted by ADNOC.
While the former concession expired in January 2014, adecision on granting stakes in a new concession was still pending at the time. In January 2015, JODCO was notified thatADNOC had entered an agreement with Total SA for a 10%
interest in the concession, and that INPEX could also take aninterest if it accepted the same terms and conditions. Accepting
these terms and conditions was a major decision. In April 2015,
INPEX concluded a 40-year agreement for a 5% interest effective January 2015, where JODCO Onshore Limited (JOL) wasestablished as the interest holder.
50

Part II First 10 years after merger

A wellhead in the Abu Dhabi Onshore Concession

Thereafter, South Korea’s GS was granted a 3% interest in
the concession in May 2015, followed by a 10% interest being
awarded to BP in December 2016. Finally, in February 2017,
China’s CNPC and CEFC (currently China ZhenHua Oil)were granted interests of 8% and 4%, respectively, bringing thetotal participating interest assigned to international players to
40%.
Today, ADNOC Onshore serves as the operator of what
is known as the Abu Dhabi onshore concession, where INPEX
has begun development work alongside ADNOC and others
to raise oil production to 1.8 million barrels per day. Oil produced from the concession is shipped from the port of Jebel
Dhanna on the western coast of Abu Dhabi as well as from theEmirate of Fujairah on the Indian Ocean, where the oil is firsttransported through the Abu Dhabi/Fujairah crude oil pipeline, which became operational in 2012. The oil exported fromthe Fujairah terminal effectively bypasses the Strait of Hormuz,
a maritime transit route considered to be prone to geopoliticalrisk.

ADNOC and JODCO peer review of Zakum integration study

The ADMA Block, an offshore oil field concession dating from 1953 until 2018, was located off the coast of Abu
Dhabi and comprised seven oil fields including Upper Zakum,
which is one of the world’s largest, as well as Umm Shaif, Lower
Zakum, Umm Lulu, Nasr, Satah and Umm Al-Dalkh.
The Upper Zakum Oil Field concession agreement was
first extended in 2014 and again in 2017. However, the concession agreements for the remaining oil fields were due to expire
in March 2018, prompting major international oil companies
and many other key players in the industry to vie for new stakes
in these oil fields.
During this time, INPEX worked to reach an agreementin principle with ADNOC in January 2017 to extend the concession agreements for the Satah and Umm Al-Dalkh oil fields.
Discussions included the terms on which the duration of thejoint development of the oil fields would be extended by approximately 25 years until December 2042, and INPEX’s participating interest in the Umm Al-Dalkh Oil Field would be
increased from 12% to 40%.
Meanwhile, INPEX also joined the bidding process forthe other oil fields in the ADMA Block. ADNOC and the Abu
Dhabi authorities had divided the ADMA Block oil fields into
three groups for the new bid. These three groups consisted of
the Umm Lulu and Satah al-Razboot (SARB, an oil field solely
developed by ADNOC) oil fields, the Lower Zakum Oil Field,
and the Umm Shaif and Nasr oil fields. Ownership of a participating interest in Abu Dhabi’s offshore oil fields was considered attractive due to the relatively low cost of production,
the large volume of reserves and Abu Dhabi’s political stability.
The bid therefore attracted the interest of numerous parties
from around the world, with as many as fourteen companies

Signing the new concession agreement for the Lower Zakum Oil Field(February 2018) (Photo: ADNOC)

and organizations considered to be vying for stakes in the oilfield concessions. INPEX had set its sights on pursuing a concession agreement for the Lower Zakum Oil Field, the largest
among the offshore oil fields. Under the ADMA Block concession framework, INPEX was the only international oil company with participating interests in both the Upper Zakum andLower Zakum oil fields, and it therefore leveraged this advantage by implementing a study on the synergies of an integrated
development of the two oil fields, and submitted a technicalproposal based on this study to ADNOC.
Despite the most intense competition for a stake in theLower Zakum Oil Field, in February 2018 INPEX succeeded
in being awarded a 10% participating interest in the Lower
Zakum Oil Field to be held through JODCO Lower Zakum
Limited over a 40-year period extending until March 2058.
An extension of the Satah and Umm Al-Dalkh concession was
also formally signed to substantiate the agreement in principle
reached earlier. The concession agreement for these fields now
runs until March 2043.
JODCO’s operational and technical contributions to Abu
Dhabi’s oil development and production industry over morethan four decades are believed to be a key contributing factor
in INPEX’s acquisition and extension of these concessions, as
are the Japanese government’s proactive efforts to engage in resource diplomacy with Abu Dhabi and the UAE.
Over the last decades, INPEX has built a sound reputation for excellence in Abu Dhabi, as evidenced by its appointment by ADNOC as the asset leader for the Lower Zakum Oil
Field in April 2018, marking the first instance for a company
other than an Oil Major to be appointed asset leader for a giant
offshore field in Abu Dhabi. INPEX is committed to meetingthe expectations of all its stakeholders and will continue to proactively engage in the oil development and production business
in Abu Dhabi over the long-term.

Students undertaking the Kumon method of learning mathematics (from 1998)

Feature 2: Bonds of trust with Abu Dhabi lead to a bright future51

FeatureSocial contribution activities help build trusting
relationships
INPEX has long worked on building cordial, long-term
relationships with Abu Dhabi, and conducts various activities
designed to contribute to social development in Abu Dhabi.
These activities, which have been carried out in earnest since
the latter half of the 1990s, are focused on education, the environment and cultural exchange.
Education and the development of human resources are
considered to be key priorities for the authorities of Abu Dhabi.
INPEX has proactively supported the training of Emirati students by organizing seminars in Japan for geology majors at theUnited Arab Emirates University from as early as 1993, subsequently also including students from the Petroleum Institute—currently part of the Khalifa University of Science, Technology
and Research—from 2007. Meanwhile, in 1998, INPEX played
an active role in introducing the Kumon method of learning
mathematics to Abu Dhabi’s primary school education authorities, later expanding this initiative to support the introductionof Kumon at ADNOC-sponsored schools in 2018, in view of
INPEX’s enhanced presence in Abu Dhabi’s oil and gas development and production sector. Since 2006, INPEX has also
been instrumental in a project to accept Emirati children at theJapanese School in Abu Dhabi. In the spring of 2018, the Japanese School produced its first Emirati junior high school graduates who had entered the school’s kindergarten program in
2006, and two of these graduates have entered a high school inJapan. In terms of contributions to cultural exchange, INPEX
has for many years assisted in the showcasing of traditional Japanese falconry in Abu Dhabi, while also helping introduce andpromote traditional Japanese values and practices such as thetea ceremony and judo. Also, as part of a concerted effort torevive the local pearl farming industry, which earlier in history
had supported the economy of Abu Dhabi, INPEX has played
a role in helping local pearling operations adopt Japanese pearl
culture technologies.
Behind INPEX’s social contribution activities in Abu
Dhabi is a desire to help improve the Emirate’s social challenges
and promote a mutual understanding to further enhance thestrategic partnership between Japan and Abu Dhabi. These activities have also enabled INPEX to strengthen its relationships
with government institutions as well as academic and researchorganizations, creating new channels that would not have beenpossible by focusing solely on the company’s core business ofoil and gas development and production. In such ways, INPEX
has successfully reinforced its ties to the local community reflecting its deep-rooted commitment.
52

Part II First 10 years after merger

3

Aiming for greater heights
with a more robust gas supply chain

Supporting a project to accept UAE children at the Japanese School in Abu
Dhabi (from 2006)

INPEX’s business in Japan started with the operationof gas fields and transportation of gas through long-distancepipelines, and has since expanded to midstream anddownstream-business. Along with business expansion, securing a stable gas supply also became important, so operations greatly evolved to cover all processes in the gas
supply chain, including overseas gas field production andoperation, liquefaction, shipping and unloading from LNG
carriers, and finally regasification of the LNG. Each phasein the gas supply chain is creating value to the business, andthe aim is to develop this model further to complement thebusiness as a whole.

Panoramic view of Naoetsu Harbor (March 2017)
Photo: Port Development Division, Bureau of Transportation Policy, Niigata
Prefectural Government

Preparing for the strong demand of natural gas
construction of an LNG receiving terminal
In January 2010, INPEX carried out a plan to source gas
from LNG which began to be received from the Shizuoka Gas
company via the Shizuoka pipeline. This LNG sourced fromthe Pacific Ocean side of the country, combined with the domestic gas operations on the Sea of Japan side, meant INPEX
could secure gas from two different sources, and this improved
its ability to utilize the full pipeline network and create a stablesupply of gas. Meanwhile, the demand for natural gas as anenvironmentally-friendly energy source was expected increasesignificantly due to global warming. However, there was a limit

to how much demand that could meet when relying on Japanese gas field deposits and LNG from Shizuoka Gas alone.
INPEX frantically searched for the supply of LNG from othercompanies in order to ensure a third and fourth source of gas
but things did not go as hoped. After various studies, in 2005
the conclusion was reached that an LNG receiving terminal
should be constructed for the supply of LNG from overseas.
This construction project was the start of a long journey involving a huge amount of capital investment.

Feature 3: Aiming for greater heights with a more robust gas supply chain53

Construction of the cherished Naoetsu LNG Terminal(1) Acquisition of the Naoetsu Site
As the potential locations for LNG terminals are limited
to seaside areas, investigations targeted existing harbors near
the Sea of Japan between Niigata and Toyama. Naoetsu wasconsidered to be the optimal location in relation to the INPEX
pipeline network, plus the area is being developed as the leadingenergy harbor near the Sea of Japan. However, the completionof a landfill project in Naoetsu led by the prefectural government was still a long way off and it was not possible to findsuitable land in the harbor area that was not being used. Then,
there was a major turning point. After hearing INPEX’s intention to construct an LNG receiving terminal, the governmentof Niigata prefecture and Joetsu city realized the importance ofthe business and how the construction would stimulate the region. A decision was made to conduct a study to bring forward
the land reclamation in the Naoetsu harbor. After many discussions, INPEX made an official request to Niigata prefecture andJoetsu city in September 2007 to cooperate with the construction of the Naoetsu LNG receiving terminal and an agreement
was formalized. This memorandum stated the prefecture wouldchange the harbor plans and land would be reclaimed for theterminal construction at the Arahama wharf in Naoetsu harbor.
It also stated that INPEX would acquire that site and in cooperation with Joetsu city would endeavor to realize the construction plans for the LNG receiving terminal. The cooperationfrom Niigata prefecture along with the understanding of many
stakeholders including Joetsu city and the Hokuriku Region
Development Bureau propelled this project forward.

(From right) Joetsu City Mayor Masayuki Kiura, Niigata Prefecture Governor
Hirohiko Izumida and Teikoku Oil President Masatoshi Sugioka shaking hands
after signing a written memorandum ahead of construction of the LNG receiving terminal (September 2007)

54

Part II First 10 years after merger(2) Acquiring the know-how for optimal facility
construction
In August 2008, the LNG Receiving Terminal Construction Division was established and the construction plan wasmade official. The plan included a berth for massive LNG carriers, two 180,000 kiloliters above-ground tanks, regasificationequipment and heat adjustment facilities on a 25 hectare site.
However, as INPEX did not have the expertise and experience
to construct LNG facilities, it started by visiting LNG terminals at major electricity and gas companies to acquire knowledge. INPEX considered outsourcing the construction work,
but as the terminal is near the Sea of Japan and as they had theirown ideas for the plan, they decided to construct the terminal
themselves to avoid potential issues from suspending the operation. Meanwhile, Tokyo Gas Engineering (now Tokyo Gas
Engineering Solutions Corporation) was appointed as technicaladviser to carry out the project smoothly. The groundbreaking
ceremony was held in July 2009 and construction began thefollowing month. Construction progressed well and the facility
took shape when two dome-shaped LNG tank roofs were lifted
in September 2011. Meanwhile, due to various external factors
during construction, flexible measures had to be taken on site
to revise the facilities and plans. Thorough safety management
was needed with 1,200 employees per day at peak construction.
In July 2013, the extensions of the Naoetsu and Shin Nagaoka
pipelines were completed and connected to the LNG Terminal.
In August 2013, the first LNG carrier docked into the harborand in December of the same year, four years and four months
after the commencement of work, Naoetsu LNG Terminal wascomplete, without any major accidents or difficulties and one
month ahead of schedule. It started operation following thecompletion ceremony.

LNG carrier arriving at the completed Naoetsu LNG Terminal

Completion of a major gas supply chain
During the construction of the LNG receiving terminalemphasis was put on creating a terminal that never stops. The
only INPEX LNG receiving terminal is in Naoetsu, no others
exist, so if the terminal stops operation so too will the supply ofnatural gas. Among the policies to avoid potential suspensionof operations was the inclusion of duplicate piping, preparation of spare equipment such as pumps, and various schemes tocombat the changing climate and marine conditions near the
Sea of Japan. As for the control system, in addition to having a
DCS (decentralized control system) that allows control of theterminal remotely with the touch of a button, leveraging fromtheir operational experience INPEX added a system that controls the operations on site. As a security measure, access to the
DCS is limited to the personnel who have sufficient knowledge
to use the system. Employees gain valuable experience throughthe daily use of the system, including techniques for the safe
and smooth berthing, unloading and departure of LNG carriers. As of 2018, more than four years after the start of operation, everyone at Naoetsu LNG Terminal is brimming withconfidence after acquiring lots of experience in this regard.
At Naoetsu LNG Terminal, approximately 900,000 tonsof LNG per year will be received from Ichthys. This LNG,
combined with domestically produced natural gas and the
LNG from Shizuoka Gas Company, will ensure sound gas
sources that will support the business in the future. INPEX has
finished business integration and has drawn close to the day
when the central idea behind business development—to supply
Japan with the natural gas it developed overseas—becomes a reality. In October 2018, the first LNG tanker loaded with LNG
from Ichthys arrived into Naoetsu Harbor to the keen interestof local colleagues. With this, the development of a robust gas
supply chain was finally completed.

First receipt of LNG at the Naoetsu LNG Terminal LNG unloading operation (left); closely watched by the central control room (right)

Feature 3: Aiming for greater heights with a more robust gas supply chain

55

New business opportunities due to gas deregulation

Five mountain tunnels drilled despite being hampered by hard bedrock andflooding (total length of approximately 12.6 kilometers)

Laying pipeline underground with the Tateyama mountains in the background(Asahi, Toyama Prefecture)

Cultivating new demand:
Construction of the Toyama Pipeline

so considerable time was devoted to gaining the understandingof local residents about the safety of the pipeline. Construction work for this project was even more difficult than previous
projects in terms of topography and geology. The pipe was laid
along the coast which brought construction difficulties as there
were many points where it crossed rivers both large and small,plus the line was obstructed by steep terrain with hard bedrockand debris, and there were many cases of flooding. Furthermore, the project required advanced techniques including theconstruction of mountain tunnels and the use of shielding
and jacking method on traffic-prone urban roads as well as
rivers. At its peak, there were 1,000 workers at more than 100
on-site locations.
As a result of difficulties in construction and certain unavoidable route changes, the construction period was extended
by 18 months. Construction was eventually completed in June
2016, and after partial initiation the opening ceremony washeld in October of the same year and natural gas was supplied
to Nihonkai Gas. With the completion of the Toyama pipeline,
the huge INPEX pipeline network reached a total length of
more than 1,500 kilometers.

By building its own LNG receiving terminal, INPEX secured a new source of gas leading to a stable supply to meetthe strong demand. However, this also proved to be the startof a new challenge. In order to cultivate demand for naturalgas, it is essential to be competitive and increase the numberof customers beyond the current level. A strategy to extend
the pipeline network to new regions was developed to achieve
cost competitiveness. This strategy continued after the integration of the businesses, where “expanding the scale of thenatural gas business in Japan” became a business target, which
includes an LNG supply chain that incorporates overseas gas
assets. This strategy was carried out and the Toyama pipeline
was born. Nihonkai Gas Co, which developed an urban gas
supply business in Toyama prefecture, informed INPEX about
the need for the supply of natural gas through a pipeline. In
2008, the decision to construct the Naoetsu LNG Terminal
was made official, then the completion of the Shin-Oumi pipeline came into view in 2009 and an opportunity to construct apipeline toward Hokuriku appeared. INPEX began a full-scaleevaluation in the autumn of 2010. Despite the challenges of
construction in mountainous areas and uncertainty about economic viability, more detailed studies were conducted and adecision was made to construct the Toyama pipeline in May
2011. The pipeline extends approximately 103 kilometers fromthe end of the Shin-Oumi pipeline in Itoigawa, Niigata prefecture, through to Toyama city, Toyama prefecture, and construction began in 2012. There was little familiarity with gas
pipelines in this region, plus there was a heightened awarenessof safety in Japan due to the nuclear power issues brought by
the Great East Japan Earthquake that occurred the year before,
56

Part II First 10 years after merger

With the start of operation of the entire Toyama pipeline, the sales volume of natural gas as of March 2018 reachedapproximately 2.11 billion cubic meters in combination withan increased supply to gas thermal power stations. The annual
sales volume exceeded two billion cubic meters. In the 2012
Medium- to Long-term Vision, INPEX announced a strengthened gas supply chain as a growth target with the long-term aimof a domestic gas supply volume of three billion cubic meters
per year. The aim of achieving 2.5 billion cubic meters by themid-2020s was also stated, and INPEX has already drawn close
to this amount. In April 2017, the revised Gas Business Act
was enacted, which entirely deregulated participation in the gas
retail market. As a result, following the deregulation of electricity retail the previous year, it was predicted that lowering
the barriers to competition between energy businesses would
lead to greater competition through participation of other industries and measures for diversified services. However, INPEX
will take flexible measures to meet the various needs of wholesale city gas businesses that are proactively developing business.
This has led to a business opportunity to increase the volume
of gas sales, expand into new regions and develop new services.
The Domestic Energy Supply & Marketing Division was therefore established in April 2017. The objectives of this division
include enabling the Company to be flexible and respond tothe changing business environment, to build stronger partnerships through enhanced cooperation, and to make new plansand proposals for urban gas suppliers and related companies.
The gas supply chain that plays a role in the further growth of
INPEX is not only about the stable supply of gas in Japan but
also the start of a new challenge toward the full scale deregulation of the gas retail market.

Natural gas pipeline network (as at August 2018)

Feature 3: Aiming for greater heights with a more robust gas supply chain

57

Part

III Future outlook
1. Interview with Takayuki Ueda, President & CEO
achieve exceptional performance in our Ichthys LNG Projectand other large-scale operatorships while making steady progress in our projects.
Within a period of stagnating oil prices from the latter
half of 2014, we had the backup of our domestic gas business,
which is hardly impacted at all by oil prices, our Abu Dhabi
projects and other businesses, so from the asset portfolio perspective as well, the merger had a great impact.
Going forward, this merger will bring benefits to Abadi,
Abu Dhabi and other large-scale projects, which I am certain
will enable our company to grow even more.

Vision 2040, the future of INPEXQ Vision 2040, which you announced in May 2018,details this, but with great changes expected to occur
across INPEX and the energy sector out to 2040, whatsort of company do you want INPEX to become?
Synergies of the merger lead to large-scale projects
and a quality asset portfolio
Q Ten years after the merger, how would you evaluate its

impact (outcomes)?
October 2018 marked the 10th year since our merger between the former INPEX and former Teikoku Oil. The combination of Teikoku Oil’s strengths in domestic projects inparticular and its abundant experience in operations, together
with INPEX’s quality overseas assets in Indonesia, Australia,
Abu Dhabi (JODCO) and other countries, produced many
synergies that contributed to tremendous growth for our company over the past 10 years.
One specific impact of the merger was our ability to leverage the combined technical capabilities and human resourcesof the two companies in large-scale operatorships. Advanced
technical capabilities, experienced personnel and the leveraging
of both are extremely important when working as an operator of large-scale projects. The merger brought us the technicalcapabilities and the human resources, and we developed theinfrastructure for making full use of each, so we were able to58

Part III Future outlook

Both INPEX and the international energy market are experiencing great change right now. Over the medium to longterm, the global middle-class population will grow and economic growth in emerging countries in the Asia region andelsewhere will continue, so demand for primary energy willcontinue to increase. As those emerging countries transition
away from coal as a fuel source, demand for oil is expected toremain strong into the future. However, even greater growth indemand is expected for natural gas, which results in fewer CO2
emissions than other fossil fuels, and renewable energies, whichhave a minimal impact on the environment.
Adopted in 2015, the Paris Agreement set a target of limiting the increase in the average global temperature to less than
two degrees Celsius above pre-industrial levels as a long-term,
globally shared goal. The agreement also requires proactive
measures by the entire international community toward elimination of greenhouse gases and the establishment of a low-carbon society. As a result, the roles that natural gas and renewableenergies play will become considerably more important. Stableenergy supplies and an improved self-development rate remainchallenges for Japan. While the Japanese government set a targetof 40% or higher for self-development rate by fiscal 2030, theactual rate as of 2017 was less than 30%, which was below thetarget level, so the need for INPEX initiatives will continue.
Partly due to an awareness of this business situation, weestablished “VISION 2040, Delivering tomorrow’s energy
solutions” in May 2018.
In Vision 2040, we established three business targets: (1)Sustainable growth of oil and natural gas E&P activities, (2)Development of global gas value chain, and (3) Reinforcementof renewable energy initiatives.
As the first of our business targets, in our core businessarea of oil and natural gas E&P activities, we aim to achieve a
net production volume of one million barrels of oil equivalent
per day over the long term while continuously expanding reserves, and to significantly increase net income and cash flowfrom operations while improving capital efficiency, to become a
top 10 international oil company (IOC) in terms of production
volume, reserves, profitability, technical capabilities and othercriteria.
As the second of our targets, in development and supplyof natural gas, we aim to further expand our gas supply chain,
which has been developed so far mainly in Japan, and build aglobal gas supply chain. We also aim to maximize the value of
our natural gas projects, including Ichthys and Abadi, as we
become a major player in the development and supply of gas
in Asia, Oceania.
And as the third target, in the area of renewable energies,
we aim to continue driving our geothermal power business,with its strong synergies with our E&P activities, and to enterand expand our participation in wind power generation. Whilealso maintaining a focus on the contribution of these renewableenergies to our bottom line, we aim to bring them to 10% of
our portfolio in the long term.
In all of our activities related to these targets, we will reduce our carbon footprint and, through an asset portfolio thatallows us to respond flexibly to the changing business environment out to 2040, we aim to continuously increase our corporate value.

Aiming to become a top 10 IOC through qualitative
growth (technical and management capabilities, etc.)
and a market perspective
Q Vision 2040 details your aim to become a top 10

international oil company, but what points do allmembers of staff need to focus on for INPEX to
become one of those top 10?
As we just discussed, one business target that we established in Vision 2040 is to become a top 10 IOC.
However, the international energy market that we are apart of is approaching a major turning point. While increasing production of shale oil and shale gas in North America is
dramatically changing the structure of the international energy
market, the LNG market is also undergoing deregulation. Withderegulation of the electricity and gas markets in Japan, existingenergy providers are expanding into each other’s territories andnew providers are entering the markets, while the compositionof the global energy industry is also changing dramatically.
As deregulation is taking many forms in the domestic andinternational electricity, gas and LNG markets, having a market
perspective is more important than ever for us if we are to succeed in becoming a top 10 IOC. In the past, we thought of theoil and natural gas we produced as commodities for sale. Froma market perspective though, we will supply markets with what
they need at the appropriate prices and times they want. This
will enable us to operate as a business with high market value.
The next thing we need to become a top 10 IOC is
growth in total capabilities, including qualitative growth areas
such as technical capabilities, financial strength, profitability
and management in addition to quantitative growth in production volume and reserves. And to achieve growth in our
total capabilities, it is important to always be willing to take onchallenges.
Finally, perhaps we are not as recognize in society as wemight wish. To improve awareness of INPEX in the global
community, we have to improve our ability to actively communicate our message both internally and externally in order tobecome a more visible company.

1. Interview with Takayuki Ueda, President & CEO

59

Connecting Ichthys operator experience and knowhow to Abadi and beyond

Developing renewable energy businesses with a focus
on geothermal and wind power generation

Q INPEX started gas production operations as part of

Q In light of a diversification of demand for energy overits operatorship of the Ichthys LNG Project. What
are your future plans for the knowledge and humanresources you built up through that project?

the medium- to long-term, Vision 2040 has a businesstarget of enhancing its renewable energy initiatives.
Specifically, what renewable energies, under whatorganizational structures, are you thinking of whentalking about developing the business?

The Ichthys LNG Project is not just the first large-scale
LNG project that INPEX has worked on as operator, but itis the first one for any Japanese company. In addition to the
upstream exploration process that led to discovery of the Ichthys Gas-condensate Field, we worked on operation processes
including construction and commissioning of large offshore
structures and an onshore plant. The valuable technical experience and know-how we acquired through these processes will
be great strengths for our future growth. In addition to thistechnical experience, we also acquired the wealth of experience,and the people with that experience, needed for working onlarge-scale projects as the operator. That experience included
contract negotiation strategies acquired when entering LNG
sales contracts with buyers and EPC contracts with engineering companies to construct the plant, and the know-how for
procuring materials, obtaining finance, and developing global
human resources. The knowledge and people we acquired as
operator of the Ichthys LNG Project can be put to use immediately in development of our Abadi LNG Project. Not only
are annual LNG production volumes at Ichthys and Abadi
similar, producing about 8.9 million tons and 9.5 million tons
respectively, but the development concepts are also practicallythe same, from developing offshore gas fields to constructing
and installing offshore facilities, laying subsea gas pipelines,
and constructing onshore LNG plants. Therefore, the experience and know-how we built up at Ichthys will be very usefulat Abadi. A number of our divisions are already transferring
this experience and know-how from Ichthys to Abadi, which
includes personnel transfers as well.
As we work toward becoming a top 10 IOC, we willleverage this experience and these people not only in the Abadi
LNG Project, but in the various projects we participate in as
both operator and non-operator.
60

Part III Future outlook

INPEX regards efforts by the international community
to achieve the long-term targets of the Paris Agreement as aperiod of transition toward a low-carbon society, and as such
we consider our response to climate change to be an important business challenge. As a responsible member of the oil andnatural gas industry therefore, we are taking steps to meet thisimportant challenge.
To communicate INPEX’s renewable energy initiatives
both internally and externally, including active “reinforcementof our renewable energy initiatives” and efforts to enhance ourrenewable energy business and power business in fiscal 2017, weestablished the new independent Renewable Energy & PowerBusiness Unit from what was the New Business Planning Unit
previously attached to the Corporate Strategy & Planning Division. Then in May 2018, we changed the status of this unit tocreate the Renewable Energy & Power Business Division. Ourbasic policy now is to make renewable energies a core businessfor INPEX built around this new division. As detailed in Vision
2040, we will also do our best to increase renewable energies to
10% of our project portfolio.
We can expect synergies with the geothermal power generation business because of the many technical commonalities
between our core E&P business and drilling wells to uncoverunderground resources, so we are continuing to implement
initiatives in this area. Overseas, we began commercial production in 2017 out of our Sarulla Geothermal IPP Project in
the Sarulla Concession on Sumatra Island, Indonesia. Domestically as well, we are in the process of conducting geothermal
resource surveys with a view to commercializing geothermal
power generation in Hokkaido and Akita prefectures. We havealready drilled structure test wells in the Amemasu-dake regionof Hokkaido and the Oyasu region of Akita, and have confirmed production of both steam and hot water through provisional fumarolic testing. After the US and Indonesia, Japan
has the world’s third largest amount of geothermal resources, so
geothermal power generation holds considerable promise fromthe perspective of a clean, home-grown, baseload power supply. Going forward, we plan to extend our existing geothermalbusiness and pursue new projects in Japan and overseas with aview to becoming a domestic geothermal development operator in the future.
We are actively working on our wind power generation
business as well. In 2015, the annual volume of electricity generated from renewable energies exceeded that which was generated from fossil fuels and nuclear power throughout the world.
The wind power generation business is also becoming the lowest cost choice for many regions adopting new power sources
over recent years, largely due to the increased size and efficiencyof wind generators. Despite the Japanese wind power generation market facing many challenges, including site restrictions,wind power generation is being promoted through fixed pricepurchasing schemes with conditions that are competitive byinternational standards. We plan to start with a focus on new
development of onshore wind power, together with partners
who have development know-how in the area of wind power
generation, to build up our own level of technical knowledge
and development know-how. Then, using our entry into thedomestic onshore wind power generation business as a steppingstone, we will actively consider entry into the offshore wind
power generation business in the future through participationin existing domestic and overseas wind farms and mergers andacquisitions of operating companies.
Apart from geothermal and wind power, we also plan to
conduct development into carbon dioxide capture and storage
technologies to capture CO2 emissions from the atmosphereand store them in geological formations in order to reduce
the CO2 emissions causing global warming. In this way, andthrough enhancement of initiatives in areas such as storage batteries and new technology research and development, we hopeto build our competitive edge in the renewable energy sector
as well.

Enabling personal growth and active participation
Q The Medium-term Business Plan you announced at thesame time as Vision 2040 touches on various initiatives,
including work style reform, creating workplaces thatoffer job satisfaction, and developing global humanresources. From perspectives like these, what message
do you have for INPEX’s employees within Japan andaround the world?
Full employee participation is essential to achieve ourtargets in Vision 2040. I want to increase energy levels acrossthe whole company by creating workplace environments where
every employee can be creative and fully demonstrate their individual abilities in line with the INPEX Values, and where thecompany can continue to grow together with society. Looking
ahead to 2040 in the midst of a continually changing businessenvironment, in addition to sustainable growth in our oil andnatural gas E&P activities, INPEX will need new knowledge
more than ever as it takes on challenges in the renewable energy sector of Japan including commercialization of geothermal
power generation and entry into the wind power generation
business, and new challenges overseas including entry into
midstream and downstream businesses in the supply of naturalgas. I also want to provide our employees with the necessary
support and work environments that enable them to take on
the challenges of these new sectors.
In any case, we will always recognize the hard work of all
our employees as the most important factor in the growth of
INPEX. I want our company to be a place that considers diversity and work-life balance, where everyone can demonstrate
their autonomy and participate with a strong sense of mission,
and where they can grow and prosper together with us.
1. Interview with Takayuki Ueda, President & CEO

61

2. Vision 2040 and
the Medium-term Business Plan 2018–2022●Vision 2040

In 2012, INPEX formulated its “INPEX Medium- to
Long-term Vision—Ichthys and the Next 10 Years” with concrete initiatives for the five years till start of production on the
Ichthys LNG Project, and with a focus on growth thereafter.
Despite dramatic changes in the business environment after
that, including drops in the price of oil and the shale revolution in North America, the company has continued to steadily
implement initiatives to achieve this medium- to long-term
vision.
INPEX achieved the significant milestone of starting production at Ichthys in 2018, but looking at the entire energy sector again, energy companies are expected to meet global energy
demand, which will continue to grow. On the other hand, thelong-term business environment is undergoing major changes,
with greater emphasis on addressing climate change and transitioning to a low-carbon society. In light of this changing business environment, INPEX decided in May 2018 to present its
long-term vision for the period until 2040 in the form of “Vision 2040, Delivering tomorrow’s energy solutions.” The subheading “Delivering tomorrow’s energy solutions” encompasses
INPEX’s desire to deliver a stable supply of energy as required
while actively addressing climate change.
INPEX’s mission as stated in Vision 2040 is “contributing to the creation of a brighter future for society through ourefforts to develop, produce and deliver energy in a sustainable
62

Part III Future outlookway,” while its goal is to “become a leading energy company
serving an essential role in global society by meeting the energy
needs of Japan and countries around the world.”
The business targets it set for itself to achieve this visionahead of 2040 were (1) to become a top 10 international oil
company through sustainable growth of oil and natural gas
E&P activities, (2) to become a key player in natural gas development and supply in Asia & Oceania through developmentof global gas value chain business, and (3) to make renewableenergy 10% of its project portfolio through reinforcement of
renewable energy initiatives. While oil and gas will continue
to be at the core of INPEX’s business operations, these targets
reflect the growing importance of renewable energy initiatives
and the diverse expectations placed on the company over the
long-term.
In its core business area of oil and natural gas E&P activities, INPEX aims to achieve volume (net production volume of one million barrels of oil equivalent per day over thelong term while maintaining and expanding reserves) and value(significantly increasing net income and cash flow from operations while improving capital efficiency) to become a top 10
international oil company in terms of total capability, including production volume, reserves, profitability, and technicalcapabilities.
INPEX is also developing a global gas value chain business to capitalize on the growing LNG market. Specifically,
INPEX will increase its supply of natural gas within Japan toover three billion cubic meters annually; develop gas demandin growth markets across Asia and beyond by participating in
gas infrastructure projects including IPP (independent power
producer), FSRU (floating storage and regasification unit) and
LNG bunkering initiatives; and strengthen its global trading
functions to maximize the value of its upstream assets, respondflexibly to market shifts and provide value across the entire supply chain. Through these initiatives, INPEX aims to become akey player in the development and supply of natural gas in Asia
& Oceania.
To proactively address climate change and meet long-term

demand for renewable energy, INPEX will also accelerate thedevelopment of new renewable energy projects. It will expand
its participation in wind power generation and other areas withconsiderable potential in addition to its geothermal power business, which draws on synergies with its oil and natural gas E&P
activities. The company will consider leading projects as operator and, while maintaining a focus on profitability, it aims forrenewable energy to account for 10% of its project portfolio in
the long term.

Going forward, INPEX also plans to help achieve theSDGs (Sustainable Development Goals) by strengthening its
ESG (environment, society and governance) initiatives through
CSR management.

Vision 2040, Delivering tomorrow’s energy solutions: Overview

2. Vision 2040 and the Medium-term Business Plan 2018–2022

63

● “Medium-term Business Plan 2018–2022”
Business targets

Along with Vision 2040, INPEX established its “Medium-term Business Plan 2018–2022—Growth & Value Creation” as a set of concrete goals and initiatives from 2018 to2022 to achieve that vision. In addition to volume growth,“Growth & Value Creation” encompasses the pursuit of value
creation through improved profitability and efficiency and, as aresult, an increase in the company’s corporate value.

Basic policy on cash allocation
INPEX will prioritize allocation of its approximate ¥2.5
trillion cash flow from operations before exploration expenditure in the order of (1) debt reduction, (2) enhanced shareholder returns, and (3) investment for growth (about ¥1.7
trillion). It also aims to achieve the following financial targets
and business targets.
INPEX’s business targets in the area of shareholder returns, during this medium-term business plan, are to maintainstable dividends and enhance shareholder returns in stages inline with growth of company performance.

64

Part III Future outlook(1) Oil and Natural Gas Upstream
INPEX aims to gradually deliver key project milestones,
including starting production and shipping LNG from theIchthys LNG Project, and quickly achieving and maintaining
stable production. Its quantitative targets are 700,000 barrelsof oil equivalent per day net production volume by fiscal 2022,
maintaining 100% or higher 3-year average reserve replacement
ratio (RRR) during the plan period, and reducing production
costs to US$5 per barrel.
(2) Global Gas Value Chain
In Japan, INPEX aims to achieve annual natural gas supply volume of 2.5 billion cubic meters. Overseas, it aims to
independently create natural gas demand in Asia and othergrowing markets, where increased natural gas demand is expected in the future, through participation in midstream anddownstream natural gas businesses.
(3) Renewable Energy
INPEX will promote the geothermal power generation
business in both Japan and overseas, while proactively entering
the wind power generation business in Japan. It will also workon research and development of renewable energy technologies.
Vision 2040 and the Medium-term Business Plan 2018–2022 clarify future directions for INPEX. Going forward, theentire INPEX Group must strive together to help bring themto fruition.

Medium-term Business Plan 2018–2022—Growth & Value Creation: Overview

2. Vision 2040 and the Medium-term Business Plan 2018–2022

65

1. Overview, access & management

2. Organizational chart(As of June 26, 2018)

Company Name

INPEX CORPORATION

Company
Headquarters

Akasaka Biz Tower 5-3-1 Akasaka, Minato-ku,Tokyo 107-6332, Japan
Phone: +81-3-5572-0200

Established

April 3, 2006

Fiscal Yearend

March

Capital¥290,809,835,000

General Meeting of
Shareholders

Audit Unit

HSE Unit
Board of Directors

Audit ＆ Supervisory Board(Member)

General Administration Division

Executive Committee

President & CEO

Corporate Strategy & Planning Division

Nomination and Compensation
Advisory Committee

New Ventures Division

Finance & Accounting Division
INPEX Advisory Committee
Logistics & IMT Division

Number of
Employees(Consolidated)

3,189(As of March 31, 2018)

Main BusinessResearch, exploration, development, production and sales of oil, natural gas
and other mineral resources, other related businesses and investment and lending to the companies engaged in these activities, etc.

Compliance Committee

Technical Division

CSR Committee

Global Energy Marketing DivisionCorporate HSE Committee

Domestic Energy Supply &Marketing Division

Information Security
Committee

INPEX Value Assurance
System Committee

Asia, Oceania & Offshore
Japan Project Division
America & Africa Project
Division
Eurasia & Middle East Project
Division
Abu Dhabi Project Division

Masela Project Division

Ichthys Project Division
Domestic Exploration &Production Division
Renewable Energy & PowerBusiness Division

66

Supplementary materials

1. Overview, access & management／2. Organizational chart67

3. Mission and CSR Principles and INPEX Values

Mission and CSR Principles

INPEX Values

The INPEX Group has formulated a Mission, CSR Principles, Business Principles, and Code of Conduct.
Our Mission reflects our objective of playing an active role in social development. Our CSR Principles
directs our CSR initiatives and reaffirms our commitment to promoting them. Our Business Principles
describes how every officer and employee as individuals of the Group should perform ethically on a daily
basis. Additionally, our Code of Conduct puts our Business Principles into practice.

INPEX Values serve as a common foundation to unite our global workforce as one team in our vision to
become a top class exploration and production company.
Our values represent our shared understanding of the behaviors we strive to demonstrate in the way we
work.

◆

MissionCollaboration

SafetyIngenuity

Integrity

We are committed to contributing to the creation of a brighter future for society through our efforts todevelop, produce and deliver energy in a sustainable way.
◆

CSR Principles

The INPEX Group conducts business efficiently and proactively with a long-term perspective. Guided by
the leadership of top management, we are committed to fulfilling our corporate social responsibilities bytaking into consideration our stakeholders' interests. Our key principles include:

Diversity

1. Deliver energy in a stable and efficient manner.

Safety2. As a company responsible for energy supply, strictly maintain safety in operation and control in allareas of our business activities.

◆

3. Comply with laws, rules and regulations and adhere to ethical business conduct in accordance with thesocial norms including human rights at our international or operating locations.

Anzen dai ichi - 'Safety Number One' - is the way we think, act and promote safety at
INPEX that forms the core of a strong HSE culture.

4. Communicate timely and openly with shareholders, employees, customers, business partners andother stakeholders while protecting and properly managing information.

◆

5. Value the individuality of employees, secure a safe, healthy and worker-friendly environment, andprovide opportunities for career development.
6. Recognize our responsibility to help preserve the environment and proactively contribute to sustainable development.
7. Contribute to the economic development of host countries and communities, by taking cultural diversity into consideration.

Integrity

We are ethical, honest and trustworthy in our business relationships and professional in
our conduct at all times.
◆

Diversity

We proactively embrace our individual differences which is central to who we are at INPEX
and what makes a unique and welcoming workplace environment.
◆

Ingenuity

We embrace initiative and innovative problem-solving at every level of INPEX and celebrate our successes at every opportunity.
◆

Collaboration

We rely on unity and team spirit to build strong professional working relationships within
INPEX as well as within the communities in which we operate.

68

Supplementary materials

3. Mission and CSR Principles and INPEX Values69

4. List of senior management’s terms
2008
10/1

2009

2010

2011

2012

2013

2014

2015

2016

201７

2018

6/25

6/23

6/28

6/26

6/25

6/25

6/24

6/28

6/27

6/26

2008
10/1

Kunihiko Matsuo

Toshiaki Kitamura

Masatoshi Sugioka

Yoshinori Yamamoto

Naoki Kuroda

Hajime Kawai

Hisatake Matsuno

Atsushi Sakamoto

Katsujiro Kida

Arihiro Kezuka

Mutsuhisa Fujii

Kimiya Hirayama

Seiji Yui

Koji Sumiya

Kunio Kanamori

Masaru Funai

Masaharu Sano

Seiji Kato

Shunichiro Sugaya

Nobuharu Sase

Seiya Ito

Shigeharu Yajima

Takahiko Ikeda

Tetsuro Tochikawa

Kazuo Wakasugi

Yoshiro Ishii

Hisanori Yoshimura

Toshiya Oshita

Yoshiyuki Kagawa

Rentaro Tonoike

Shigeo Hirai

Yasuhiko Okada

Shigeru Hayashi

Kimihisa Kittaka

Haruhito Totsune

Hideki Iwashita

Shigeru Watanabe

Hiroshi Fujii

Hiroshi Sato

Tetsuo Yonezawa

Fumiya Kokubu

Hiroshi Nakamura

Noboru Tezuka

Hideyuki Toyama

Kyosuke Furukawa

Michiro Yamashita

Shigeru Usui

Tsuyoshi Watanabe

Yoshitsugu Takai

Hiroji Adachi

Sadafumi Tanigawa

Jun Yanai

Kasaburo Tamura

Isao Matsushita

Akinori Sakamoto

Nobusuke Shimada

Wataru Tanaka

Norinao Iio

Kazuhiko Itano

Atsuko Nishimura

Shuhei Miyamoto

Kazuyoshi Miura

Yoshikazu Kurasawa

Takayuki Ueda

Noboru Himata

Hideki Kurimura

Takashi Kubo

Toshiaki Takimoto

Kazuo Yamamoto

Yuzo Sengoku

Kenji Kawano

Yosuke Happo

Yasuhisa Kanehara

Yoichi Iwata

Toshihiko Fukasawa

Hitoshi Okawa

Hirohisa Ota

Koichi Ogino

2009

2010

2011

2012

2013

2014

2015

2016

201７

2018

8/1

6/23

6/28

6/26

6/25

6/25

6/24

6/28

6/27

6/26

8/1

Representative Director, Chairman

Director, Managing Executive Officer

Representative Director, Vice Chairman

Outside Director

Representative Director, President & CEO

Audit & Supervisory Board Member

Representative Director

Audit & Supervisory Board Member (Outside)

Senior Executive Vice President

Senior Managing Executive Officer

Director, Senior Executive Vice PresidentManaging Executive Officer

Director, Senior Managing Executive Officer

Executive Officer

8/1

Masahiro Murayama

70

Supplementary materials

4. List of senior management's terms

71

5. Segment overview

Eurasia

Fiscal year ended March 31, 2018

Number ofcountriesof
5 Numberprojects total

Net sales
8 （￥million）

88,597

Projects in
production

4 Underdevelopment

Operating income
0 （￥million）

21,396

Preparation fordevelopment

0 Under
exploration

Proved reserves
3 （million
BOE）

271

Other

1

Net production（million BOE）

45

Oslo Oﬃce（Norway）

London Oﬃce

Calgary Oﬃce

Astana Oﬃce

（U.K.）（Canada）（Kazakhstan）

Tokyo Head Oﬃce

Japan

Fiscal year ended March 31, 2018

● Minami-Nagaoka Gas Field Net sales● Naoetsu LNG Terminal （￥ million）● Natural gas pipeline
network (Approx.
Operating income
1,500 km), etc.
（￥ million）

Abu Dhabi Oﬃce

（United Arab Emirates）

120,060
25,256

Proved reserves（million BOE）
Net production（million BOE）

Houston Oﬃce

（U.S.A.）

166
31

Caracas Oﬃce

（Venezuela）

Singapore Oﬃce

（Singapore）

Middle East & Africa

Fiscal year ended March 31, 2018

Number ofcountries

5

Projects in
production

7 Underdevelopment

Operating income
0 （￥305,056
million）

Preparation fordevelopment

0 Under
exploration

Proved reserves
2 （million
BOE）

Number of
projects total

9

Net sales（￥ million）

Net production（million BOE）

Jakarta Oﬃce

565,244（Indonesia）

Darwin Oﬃce

（Australia）

2,293

Rio de Janeiro Oﬃce

（Brazil）

Perth Oﬃce

257

（Australia）

Americas
Asia & Oceania
Number ofcountries
Projects in
production
Preparation fordevelopment

Fiscal year ended March 31, 2018

5

Number of
projects total

40

11

Under
development

1

Under
exploration

Net sales（￥ million）

2

Operating income（￥ million）

28,40526

Proved reserves（million BOE）

1,119

Net production（million BOE）

72

Supplementary materials

148,837

Fiscal year ended March 31, 2018

Number ofcountriesofNet sales
6 Number
15 （￥projects total
million）

10,964

Projects in
production

9 Underdevelopment

Operating loss
0 （￥million）

10,656

Preparation fordevelopment

1 Under
exploration

Proved reserves
5 （million
BOE）
Net production（million BOE）

9
25

91
5. Segment overview

73

6. Trend of business results

Crude oilNet probable reserves (Natural gas)

Natural gas

Net probable reserves (Crude oil)

Other

Net proved reserves (Natural gas)

Editor’s note:Net proved reserves (Crude oil)Net production volumes

Reserves

Net sales(Thousand BOE/day)
600(MMBOE)
6,000(Million yen)
1,500,000

500

5,000

400

4,000

1,200,000

900,000
3,000

300

600,000

200

2,000

100

1,000

0

2007 08

09

10

11

12

13

14

15

16

17 18
（Fiscal year）

0

300,000

2007 08

09

10

11

12

13

14

15

16

0

17 18
（Fiscal year）

2007 08

09

10

11

12

（1）Trend of net production volumes

13

14

15

16

(Thousand BOE/day)Fiscal year

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Crude oil242.50241.50223.20218.30239.60251.20245.90244.90242.70339.20348.30329.10Natural gas

175.19181.50181.68187.10183.74174.98161.89163.89165.36

174.64173.01120.82

Total

417.69423.00404.88405.40423.34426.18407.79408.79408.06513.84521.31449.92（2）Trend of reserves
Fiscal year
Provedreserves

Net
probable
reserves

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Nobuharu Sase, Chairman
10th Anniversary Publication Editing Committee

2018

Crude oil

1,139

1,088

1,048

980

899

981

929

1,278

1,213

2,143

2,210

2,747

Natural gas

631

557

550

495

409

1,451

1,259

1,254

1,221

1,121

1,094

1,110

Total

1,770

1,645

1,598

1,475

1,308

2,432

2,188

2,532

2,434

3,264

3,304

3,857

Crude oil

1,610

1,274

1,603

1,476

1,393

734

769

854

715

796

521

583

Natural gas

349

1,447

1,573

1,453

1,425

1,089

1,138

1,091

895

909

868

860

Total

1,959

2,721

3,176

2,929

2,818

1,823

1,907

1,945

1,610

1,705

1,389

1,443

10th Anniversary Publication Editing Committee
Chairman:Vice Chairmen:

Committee Members:(Million yen)

Fiscal year

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Crude oil

607,400

783,465

650,352

486,920557,910726,222788,135

858,753

730,422679,241

617,194710,277

Natural gas

332,937

391,090398,266

326,412356,247

429,065

397,766

455,414421,859

316,761

242,575

208,102

Other

29,37528,40927,54527,09428,921

31,44330,631

20,457

18,944

13,561

14,653

15,322

Total

969,712 1,202,965 1,076,164

840,427

943,080 1,186,731 1,216,533 1,334,625 1,171,226 1,009,564

874,423

933,701

Supplementary materials(MMBOE)（3）Trend of net sales by product

74

17 18
（Fiscal year）

With INPEX celebrating the 10th anniversary since forming a new company on October 2018,
we decided in 2016 to publish a short history of the company as part of the anniversary celebrations.
Despite concerns that 10 years may be too short for such a publication, we moved forward withthe belief that it’s the right time to record our thoughts on the merger and integration of the businesses, and the 10th Anniversary Publication Editing Committee was established to put it together.
Senior Corporate Advisors Naoki Kuroda and Masatoshi Sugioka, who led the companies prior
to the merger, have contributed their thoughts about the time of the merger and their hopes forthe company on our 10th anniversary. Corporate Advisor Seiji Yui and Counselors Wataru Tanaka
and Katsujiro Kida played a role as advisors to the editing committee to ensure the accuracy of thispublication.
On behalf of the editing committee I hope this short history provides an interesting look backover the past 10 years of INPEX, and that it helps in particular the younger members of staff whojoined after the merger understand the circumstances of the time. I hope it also conveys some of theexcitement of the world of oil development and encourages our younger generations to take a stronger
step forward in our industry.
Finally, I would like to offer my sincere thanks to all members of the editing committee andothers within the company who cooperated throughout this process, providing photographs and documents, responding to interview requests and proofreading the manuscript.
Thank you also to the people of Dai Nippon Printing for their tremendous cooperation.

Advisors:

Nobuharu Sase
Masaharu Sano
Takahiko Ikeda
Kimihisa Kittaka
Tsuyoshi Watanabe
Akio Kawamura
Naoki Takaishi
Munehiro Hosono
Kuniharu Tsukada
Wataru Tanaka
Seiji Yui
Katsujiro Kida

Staff:

Koichiro Kobayashi
Takao Umeno
Masanori Itozawa
Keisuke Yano
Yuko Mori
Masami Mitani
Norihiko Kobayashi
Akira Kato
Tomomi Kikawada

75

INPEX CORPORATION:
The First 10 Years
Merger, Challenges and the Future
Published April 2019

Published by:

INPEX CORPORATION

Akasaka Biz Tower 5-3-1 Akasaka,
Minato-ku, Tokyo 107-6332, Japan

Production Assistance: Dai Nippon Printing Co., Ltd.
Printing and Binding: Dai Nippon Printing Co., Ltd.

1-1-1 Ichigaya-Kagacho, Shinjuku-ku, Tokyo 162-8001, Japan