Long Term Business Vision and Medium-Term Business Plan of the JAPEX Group

Japan Petroleum Exploration Co., Ltd. (hereafter "JAPEX") has formulated Long Term Business Vision, with the key message of "Transformation to Integrated Energy Company, around Oil and Gas E&P Business". Together, JAPEX has formulated Medium-Term Business Plan from 2015 to 2019.

On May 2011, JAPEX has announced Medium-Term Business Plan (Fiscal Year 2011 to Fiscal Year 2015, hereafter "Previous Plan"), with the basic policies of E&P (Exploration, Development and Production of Crude Oil and Natural Gas) business, domestic Gas Business, and Environmental and Innovative Technology Businesses.

In the Previous Plan, we have set 3 stages of quantitative targets (1^st stage: Shifting Investment to overseas, 2^nd stage: Expanding consolidated daily production to 70,000 barrels of crude oil equivalent by Fiscal 2016, 3^rd Stage: Expanding the consolidated reserves to 450 million barrels of crude oil equivalent by Fiscal 2021). By our efforts so far, these targets are likely to be achieved. For this reason, we have decided to formulate Long Term Business Vision aiming 10 years, and Medium-Term Business Plan for 5 years in order to achieve this Long Term Business Vision.

Although the international oil prices have fallen rapidly from second half of last year, and outlook for recovery is still unclear, we have perception that crude oil and natural gas will further be a vital source as a primary energy in the world. In this Long Term Business Vision and Medium-Term Business Plan, we have set our plan for future in order to further promote policies set in the Previous Plan. The summaries are as follows:

"Transformation to Integrated Energy Company, around Oil and Gas E&P Business"

As a result of shifting business into overseas such as proceeding Canada Oil Sand Hangingstone Expansion Project and acquiring stake of Pacific Northwest LNG, volume of production and reserves targeted May 2020 are estimated to be 100,000 BOED of Production / 550 MMBOE of Reserves.

We have faced rapid decline of the oil price recently, and re-recognized the volatility of the oil price. We also recognize that we need to diversify our business in order to mitigate the effect of oil prices and stabilize business.

For this reason, we will expand our business into areas related to oil and gas business, including electricity generation, and areas that have close relations with E&P technologies. JAPEX will aim for earning profits from new businesses other than traditional E&P business.

Business Policies

E&P Business

• Pursue currently ongoing projects and making profits at the production stage.
• Seek for domestic potentials and build efficient operational frameworks
• Keep RRR（Reserves Replacement Ratio）＞1 even after ongoing projects have settled by 2020.

Domestic Natural Gas Supply Business

• Diversify supply sources and supply methods, and expand scales.
• Commence operation of Soma LNG Terminal and commercialize power generation business.
• Become supplier of natural gas handling 2.5 million ton by 2025. (1.2mm ton in 2014 and 1.5 mm ton in 2019)

Environment and Innovative Technology Business

• Develop technology for Methane Hydrate
• Pursue establishment of CCS technology and make legislative preparation for private companies.
• Pursue geothermal power business

CSR

• Pursue efforts to priority agendas "SHINE"

By promoting these plans, JAPEX group will establish basement for business and further strengthen our competitiveness, and by promoting efficiency as well, JAPEX will make efforts to promote sustainable development and maximizing the shareholder value.