Japex: A New Era of Oil and Gas Investment through 2030

Japan Petroleum Exploration Co., Ltd. (Japex) has announced a significant shift in its strategic focus, prioritizing oil and gas investment through 2030. This new direction, outlined in the "Japex Management Plan 2022-2030," aims to balance profitability and sustainability while contributing to the realization of a carbon-neutral society by 2050.

Japex's new management plan aligns with its long-term vision of achieving a carbon-neutral society by 2050, setting clear management goals and priority items for each business field, including Exploration & Production (E&P), Infrastructure/Utility (I/U), and Carbon Neutral (CN). The plan aims to improve profitability and build a business foundation for 2030 and beyond, while also contributing to the realization of a carbon-neutral society.

The plan outlines the following management goals and fund allocation policies to balance the need for profitability with sustainability:

1. Management Goals:
- Business profit target: 50 billion yen scale as of FY2030 (30 billion yen scale as of FY2026)
- ROE target: 8% as of FY2030 (5% as of FY2026)
- Profit composition target (E&P-to-non E&Ps): 5-to-5 as of FY2030 (6-to-4 as of FY2026)

2. Fund Allocation and Shareholder Return Policies:
- Out of a total of 500 billion yen in cash inflows during the period of the Plan, allocate 450 billion yen in growth investments and 50 billion yen in shareholder returns.
- Allocation of 450 billion yen for growth investment: 230 billion yen in E&P, 170 billion yen in I/U, and 50 billion yen in CN
- Adopt a consolidated dividend payout ratio as a basic policy for returning profits to shareholders and pay dividends in line with business results for each fiscal year, with a target payout ratio of 30%
- Strive to maintain an annual dividend of 50 yen per share even in the event of a temporary downturn in business performance

3. Priority Items by Business Field:
- E&P: continue to invest in acquisition of new interests and promote low-carbon operations
- Japan: pursue potential including additional development and offshore exploration, reduce greenhouse gas (GHG) emissions from operations, collaboration with business examinations in other fields such as CCS/CCUS
- Overseas: Acquire new interests
- I/U: expand the profit scale of renewable energy and other businesses.
- Japan: take actions to diversify our gas supply method, add more projects on renewable energy development
- Overseas: participate in projects of LNG supply infrastructure development, consider participating in projects on renewable energy development
- CN: launch CCS/CCUS prototype project by hub and cluster (*6) model utilizing our oil and gas fields, etc.
- Japan: launch CCS/CCUS model projects, consider infrastructure to supply CO2 and others such as hydrogen and ammonia
- Overseas: participate in CCS/CCUS projects in systematically advanced areas such as North America and Europe, participate in feasibility studies on CCS/CCUS in emerging countries

By setting these goals and prioritizing investments in E&P, I/U, and CN, Japex aims to improve profitability while also contributing to the realization of a carbon-neutral society by 2050. The plan demonstrates the company's commitment to balancing the need for profitability with sustainability by investing in low-carbon operations, renewable energy, and carbon capture and storage projects.

In conclusion, Japex's new management plan signals a significant shift in the company's strategic focus, prioritizing oil and gas investment through 2030. By balancing profitability and sustainability, Japex aims to contribute to the realization of a carbon-neutral society by 2050. The plan sets clear management goals and priority items for each business field, demonstrating the company's commitment to a sustainable and profitable future.