● ● Corporate Guide 2021 Japan Petroleum Exploration Co., Ltd. https://www.japex.co.jp/english/ A part of the cost of the printing paper will be Japan Petroleum Exploration Co., Ltd. FSC donated to environmental protection activities. Printed in Japan, April 2021 ● ● Corporate Vision ● ● Contents Contribute to society through 2 Overview of Oil and Gas E&P 4 Overseas Projects 6 Domestic Projects stable supply of energy 8 Energy Development 10 Energy Supply and address social issues towards 12 Creation of New Businesses 14 Sustainability Sustainable Development Goals. 16 Corporate Profile • Explore, develop, produce and distribute crude oil and natural gas at home and abroad. • Further strengthen the natural gas supply chain, built on our domestic infrastructures, by combining the electric power supply business. • Contribute to resolving energy and climate change related challenges towards a sustainable society through developing and commercializing new technologies, drawing on our expertise. • Achieve sustainable growth and maximize corporate value, while placing top priority on maintaining trust with all stakeholders. JAPEX Corporate Guide 2021 1 ● ● Overview of Oil and Gas E&P Oil and Gas E&P Value Chain Since its foundation, JAPEX has been engaged in the upstream, or E&P (exploration, development and production), sector of the oil and gas industry, as well as their transportation and supply. It also has contributed to the stable supply of energy, drawing on its S Screen extensive track record both at home and abroad, as well as the broad range of technologies and expertise it has accumulated over E Explore the years. P Produce D Deliver Screen Explore Produce Distribute Development and Production Transportation and Supply FEED ● Acquisition of Interests Crude oil Tank trucks, tankers, pipelines (Front-end Engineering and Design) ● Natural gas Pipelines Information gathering Onshore ● LNG LNG carriers (ocean-going carriers, coastal vessels), E geophysical survey Drilling of production wells tank trucks, tank containers on rail Preliminary survey Construction of production facilities Acquisition of working interests Crude oil tank D Production of oil and gas truck Clients ● Gas-fired power plants D Crude oil tankers ● Local gas distributors Onshore ● Industrial users E drilling rig ● Exploration D Crude oil pipeline Oil refiners ● Others Geological survey Crude oil Geophysical survey D Natural gas pipeline Exploratory and Production Production appraisal drilling P P Acquisition of well facility S interests Evaluation of reserves Offshore LNG liquefaction D LNG tank truck E D drilling rig Natural gas plant Offshore E geophysical survey D LNG carrier LNG tank containers LNG D Receiving terminal D on rail Origin of Oil and Natural Gas Oil Natural Gas and LNG Oil and natural gas are said to be Oil is a general term for flammable liquid, composed Natural gas is a flammable gas composed mainly of meth- formed underground, over several to Cap mainly of various hydrocarbons found underground. Crude ane, which is colorless, odorless, and ligher than air. It is rock tens of millions of years, from prehis- Gas reservoir oil is a liquid extracted from oil fields underground, from considered to be an energy source with a lower environ- toric organisms decomposed by high which gas and water are removed. By applying heat, it is mental impact than other fossil fuels such as oil and coal Reservoir Oil reservoir subterranean heat and microorganisms. rock distilled and separated into fractions such as liquefied pe- given its less emissions of carbon dioxide (CO2), nitrogen These resources move upward troleum gas (LPG), naphtha (gasoline), kerosene, diesel oil, oxide (NOx), and sulfur oxide (SOx) when burned. through subterranean cracks and fuel oil, and asphalt by taking advantage of their different Natural gas is liquefied into LNG by cooling it to -162˚C collect in a stratum called source rock. boiling points. or -260˚F. LNG takes up only one six-hundredth the volume Natural They then accumulate in formations Oil gas Depending on their properties, they are used as fuel for of natural gas, allowing for long-distance transportation containing a dome-shaped, dense layer vehicles and machines, and as raw materials for chemi- and mass storage. Most of the natural gas consumed in Source rock called cap rock and reservoir rock cal products such as plastic bottles, plastic products, and Japan is imported from overseas as LNG. Mud underneath. fibers. 2 JAPEX Corporate Guide 2021 JAPEX Corporate Guide 2021 3 ● ● Overseas Projects 海外事務所 03 Canada Maximizing Value Shale Gas Project Natural Gas Block North Montney (Province of British Columbia) of Overseas Projects Project Company JAPEX Montney Ltd. JAPEX has been engaged in the shale gas development and production project in North Montney in the JAPEX aims to maximize the value of existing E&P projects and explore opportunities to participate in new projects. Province of British Columbia, Canada since April 2013, which is a project operated by the subsidiary of Also, our Singapore Branch plays a central role in seeking opportunities for more flexible sourcing of LNG. PETRONAS, the Malaysian state-owned oil company. A significant volume of shale gas assets has been confirmed in the area. To enhance the asset value, the project currently prioritizes the development of areas with high economic potential, considering U.K. North Sea A the prevailing market conditions in Canada. U.K. North Sea Offshore Block Russia/Sakhalin Canada 04 B Sakhalin-1 Project Oil Sands Project See: Tight/Shale Formation Development Technology on page 9 Aberdeen Representative Office Canada 03 Shale Gas Project 04 Canada Oil Sands Project Bitumen United States C Iraq Tight Oil Project Block Hangingstone (Province of Alberta) 01 Garraf Project オイルサンド Headquarters Japan (see page 6) Project Company Canada Oil Sands Co., Ltd. Houston Representative Office The project is led by Japan Canada Oil Sands Ltd. (JACOS), a local subsidiary. Dubai Representative Office Jakarta Representative Office Singapore Representative Office 01 Iraq Indonesia 02 Garraf Project Crude Oil Kangean Project Block Garraf Oil Field 02 Indonesia (northern region of Dhi Qar Governorate) Natural Gas Project Company Japex Garraf Ltd. Kangean Project Block Kangean Block (offshore East Java) JAPEX has been engaged in the crude oil development and pro- Project Company Energi Mega Pratama Inc. duction project in Garraf Oil Field in Iraq since it acquired pro- JAPEX has been engaged in oil sands development in the duction and development rights in the project in 2009 jointly with JAPEX has been engaged in the natural gas develop- East Java of Indonesia since 2007. Province of Alberta, Canada for more than 40 years since the operator PETRONAS, a Malaysia’s state-owned oil company. ment and production project in Kangean Block offshore The project develops and produces natural gas from it founded JACOS, a local project company, in 1978. Commercial several gas fields scattered in the block with a view to We pioneered the establishment of the Steam- production com- securing a stable supply over the medium to long term. Assisted Gravity Drainage (SAGD) method, a method menced in 2013, Current production is mainly from the Sirasun and using steam to extract bitumen (ultra-heavy oil) from and further devel- Batur Gas Fields of the TSB Gas Fields offshore north the oil sands layer; succeeded in test production using opment is under- of Bali island, which began production of natural gas in the method at 3.75 Section of the Hangingstone leases way to increase the March 2019. in 1999; and launched commercial production in 2003. production volume The natural gas is processed at a floating production Currently, JACOS produces bitumen in the area where to 230,000 barrels unit (FPU) and supplied through the East Java Gas Pipeline production commenced in August 2017 and transitioned per day. to a state-owned electric power company and fertilizer to stable production at the end of June 2018. Under the factories in the suburbs of Surabaya City, East Java. basis of stable production rate of 20,000 barrels per day, the production volume is adjusted flexibly in line with market conditions. United Kingdom Russia United States A B C See: Oil Sands Development by SAGD Method on page 8 U.K. North Sea Offshore Block Crude Oil and Natural Gas Sakhalin-1 Project Crude Oil and Natural Gas Tight Oil Project Crude Oil Block Seagull Discovery Block Chayvo, Odoptu and Arkutun-Dagi fields Block Middle McCowen (southern Texas) (300 km offshore from Aberdeen) (offshore Sakhalin Island) Project Company Japex (U.S.) Corp. Project Company JAPEX UK E&P Ltd. Project Company Sakhalin Oil and Gas Development Co., Ltd. (SODECO) This is a tight oil development and production project in Eagle This is an offshore crude oil and natural gas development project off the coast Ford, Texas. JAPEX has been engaged in the project since it ac- of Aberdeen, UK. JAPEX participated in the project during the exploration phase This is a project to develop and produce primarily crude oil in quired part of interests in the block in August 2012. three oil and gas fields, led by ExxonMobil, the operator. JAPEX in 2014. Subsequently, in March 2019, a decision was made to start developing See: Tight/Shale Formation Development Technology on page 9 the block. Further development for production is currently underway. participates in the project as a shareholder of SODECO. 4 JAPEX Corporate Guide 2021 5 ● ● Domestic Projects Asahikawa Iwamizawa Ensuring Stable Supply Kushiro Obihiro Coastal vessel Sapporo of Diverse Energies Kitahiroshima A Chitose 01 B LNG Receiving Tomakomai to Clients in Japan Terminal Muroran Yufutsu LNG Plant/ Hokkaido Gas Co., Ltd. Ishikari LNG Base Yufutsu LNG JAPEX currently produces oil and natural gas at oil and gas fields in 10 locations around Receiving Terminal Japan, and transports and distribute them to domestic clients through various methods. We Tomakomai City, Hokkaido also have been widening the range of energies we can access, including LNG (liquefied natu- ral gas) from overseas and electricity.