ear ended march 31 annual report - jogmecear ended march 31 annual report 2013 annual report head...

Year ended March 31

Annual Report2013

ANNUAL REPORT

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INDEX■Message from the President ････････････････････････ 2■JOGMEC's Activities ･･･････････････････････････････ 4■Oil and Gas Upstream Investment　　　　　　　　and Research & Development ･･････････････････････ 6■Coal Resource Development ･･････････････････････ 12■Geothermal Resource Development ････････････････ 16■Metals Strategy, Exploration, and Technology　　　　Development ･････････････････････････････････････ 20■Stockpiling ･･･････････････････････････････････････ 26■Mine Pollution Control･････････････････････････････ 30■Financial Review　　　　　　　　　　　　　　　General Overview ･･･････････････････････････････ 34　　Balance Sheet ･･････････････････････････････････ 36　　Statement of Operations ････････････････････････ 38　　Statement of Cash Flows ････････････････････････ 39　　Notes to Financial Statements March 31, 2012 ･･ 40　　Report of Independent Auditors ･･････････････････ 44■Overview of JOGMEC ･････････････････････････････ 45■Officers ･･･････････････････････････････････････････ 46■Organization Structure ････････････････････････････ 47■Worldwide Network ･･･････････････････････････････ 48■Domestic Network ････････････････････････････････ 49

Copper100%

Imports Domestic production Domestic production

Natural Gas97.36%

Tin100%

Crude Oil99.64%

0.36% 2.64% 0.67%

2.22%

Geothermal97.78%

Coal99.33%

Imports Undeveloped Developed

Imports

　Japan consumes considerably more oil, natural gas, and mineral resources than can be domestically produced.

To redress this imbalance, Japan depends mostly on importing these resources. Japan Oil, Gas and Metals National

Corporation (JOGMEC), an incorporated administrative agency established by the Japanese government, plays a key

role in ensuring a constant and stable supply of oil, natural gas, coal, geothermal energy and mineral resources to

support industries and citizens in Japan through a wide range of activities relating these resources.

Securing a Stable Source of Oil, Gas, and Mineral Resources

1Annual Report 2013

　In commemoration of the issue of the “Annual Report

2013” summarizing the achievements JOGMEC made during

fiscal 2012, I would like to exend my deep gratitude for your

understanding and support for JOGMEC.

　In September 2012, the Japan Oil, Gas and Metals National

Corporation Act was revised, the functions concerning the

development of coal and geothermal resources were added to

JOGMEC, and support functions concerning development of oil,

natural gas and metal resources, and stockpiling of resources

were further reinforced. The year 2012 turned out to be a year

of progress for JOGMEC whose mission is securing the stable

supply of resources.

　Taking a look back on resource and energy trends during

fiscal 2012, one of the significant events was that Japan posted

a record-high trade deficit (more than 8.1 trillion yen) due to

factors such as the increase in import volumes of natural gas

for power generation. Moreover, the unstable political situation

in the Middle East caused the supply of crude oil and natural

gas to be precarious, whereas progress in the “Shale Gas

Revolution” in North America gave rise to a major change in the

global structure of supply of crude oil and natural gas.

　As for coal resource development projects, JOGMEC

established a system for equity capital and liability guarantees.

We made presentations on the system and held meetings in

order to increase its awareness and grasp the needs of the coal

development industry. As overseas geological survey projects,

JOGMEC started a new survey in Mozambique in October,

and steadily completed the boring exploration etc. in Vietnam.

Concerning overseas coal development potential surveys,

JOGMEC have been clarifying the geological structures of coal-

producing countries in response to the companies’ needs

through undertaking grant funding for 4 projects including a

new one in Australia. In regard to technology transfer projects,

JOGMEC accepted 140 trainees from Vietnam at the Mining

Technology Training Center located in Kushiro City, Hokkaido,

while sending mining experts to Vietnam and Indonesia in an

effort to transfer mining technologies.

　JOGMEC is continuously making multi-faceted efforts as

described below to carry out the mission of stably supplying

resources and energy to Japan by appropriately responding to

changes in the resource and energy situation.

　As for oil and gas development projects, in fiscal 2012,

JOGMEC decided to provide equity capital for asset acquisition

to 3 companies and liability guarantees to 4 companies, which

are involved in 6projects, these projects comprise LNG projects

in Australia and shale gas development projects in Canada, etc.

With LNG demand ever increasing, such projects are expected

to contribute to the diversification of future LNG supply sources

to Japan.　Also, we continuously conducted geological and

geophysical surveys on the premise that Japan would have

priority rights for negotiation to obtain the block located in the

northern Cambodia onshore area and the southern Vietnam

offshore area. Further, by concluding the Agreement on joint

exploration surveys with the National Oil Corporation of Kenya,

JOGMEC embarked on new geological and geophysical surveys.

Meanwhile, for the development of methane hydrate resources,

JOGMEC conducted the world’s first offshore methane hydrate

production test off the coast of Atsumi Peninsula and Shima

Peninsula, and produced 120,000 m3 gas in total for a period

of about 6 days. JOGMEC is planning to conduct a second

offshore production test, etc., in order to put technologies into

commercialization. As for Enhanced Oil Recovery technology

with CO2 injection (CO2EOR), we are drawing up a conceptual

plan for a pilot test to be conducted in Abu Dhabi, and

discussing opinions with a view to its implementation.

　Also, with regard to geothermal resource development

projects, JOGMEC established a program for equity capital and

liability guarantees. We made presentations on the program

and held meetings nationwide in order to increase awareness of

the program and grasp the needs of private companies for the

development of geothermal resources. Further, for supporting

initial surveys with high risks, JOGEMC established a subsidy

program and financially supported 8 large-scale projects.

Moreover, we subsidized 7 community-based small-scale

projects in order to encourage local small- and medium-sized

companies to participate in the development of geothermal

resources. Additionally, JOGMEC is engaged in geological

surveys by adopting Japan’s unprecedented research methods

such as time-domain airborne electromagnetic research and

airborne gravimetry, etc., in order to identify the development

potential of geothermal resources.

　As for metallic mineral resource development projects,

JOGMEC approved a new iron ore exploration project for a

loan and Japan’s first lithium development project for liability

gurantees, in support of securing resources for Japan. As a joint

venture (JV) survey involved in the initial resource exploration

activities, JOGMEC identified the presence of a world-class

2 Annual Report 2013

Message from the President

copper and gold deposit in the Frontera region extending over

Chile and Argentina, and transferred our interests in the joint

venture to a Japanese company. The discovery of platinum

group metals deposit in the Waterberg region, South Africa was

globally acclaimed, and JOGMEC won the “2012 Exploration

of the Year Award” in the worldwide mining convention. Also,

JOGMEC signed 3 new cooperation agreements including a

Memorandum of Understanding (MOU) with Swaziland with

regard to remote sensing technology to proactively proceed with

overseas technology cooperation. As for deep seafloor mineral

resource surveys, we discovered new seafloor massive sulfides

as a result of deep drilling work conducted through the use of a

research vessel “Hakurei” in the Izena sea hole located in the

Okinawa sea area. As for cobalt-rich crusts, JOGMEC applied

to the International Seabed Authority (ISA) for the exploratory

drilling in the open sea off the south-east coast of Minami-Tori-

shima Island in fiscal 2012, and successfully obtained approval

by the ISA in July 2013.

　As for resource stockpiling projects, JOGMEC successfully

completed the construction of a national system stockpiling

1.5 million tons of LP Gas by constructing the Kurashiki and

Namikata national LP Gas Stockpiling Bases, which are 2 of

the world’s largest resource LPGas stockpiling bases, and

equipped with the “water seal underground rock cavern tank

system”, for the first time in Japan. We efficiently and safely

controlled operation of a national petroleum and LP Gas

stockpiling bases while implementing disaster control measures,

drills, etc., by making use of the experience in the Great East

Japan Earthquake. Also, JOGMEC completed reconstruction

of ground facilities of the Kuji National Petroleum Stockpiling

Base which suffered the disaster due to the tsunami while

reinforcing earthquake-proof measures for the national rare

metal stockpiling warehouse.

　As for projects supporting of mine pollution control, JOGMEC

received a letter of appreciation from the governor of Iwate

Prefecture as JOGMEC safely operated and controlled the New

Neutralization Plant at the Abandoned Matsuo Mine during

the past 30 years without any accident. In addition, with

regard to projects for the prevention of mine pollution run by

local government agencies, JOGMEC conducted surveys and

provided instructions concerning an accident which occurred in

a waste dump located in Aomori Prefecture, conducted surveys

and design of the mine pollution control facilities located in

Miyazaki Prefecture, and supported 9 construction activities

in the mines of Yamagata Prefecture, etc. With regard to the

development of mine pollution control technologies, JOGMEC

conducted surveys and research on the application of passive

treatment technology under various conditions, and made

significant progress with a view to implementing on-site tests

on acid drain water. Further, JOGMEC are contributing to the

sustainable development of mineral resources of resource-rich

countries by conducting human resource development, such as

dispatching of policy advisors on mining pollution to Peru and

holding seminars on mine pollution and environment in Myanmar

and South Africa, while proactively engaging in technological

cooperation for resource-rich countries through the use of

techniques and experience relating to the mine pollution control

in Japan.

　Our lives directly depend on the securing of resources and

energy. Thus, JOGMEC is keenly aware that our responsibility

is increasing by watching the domestic and foreign situations.

By reaffirming the significance of our responsibility, JOGMEC

is determined to continuously make every effort to secure

the stable supply of resources and energy for Japan. Your

continuous support will be greatly appreciated.

Hirobumi Kawano

President, JOGMEC

3Annual Report 2013

Oil and Gas Upstream Investment and Research &Development

●Multi-faceted approaches to oil and gas producing countries　Conducting joint operations with oil- and gas producing countries and training overseas for technical experts ●Provision of financial assistance　Providing equity capital and liability guarantees for exploration and development of oil and gas by Japanese companies●Geological surveys　Conducting geological surveys as a basis for exploration and production projects; also conducting marine resource surveys●Collecting, analyzing, and providing information　Collecting, analyzing, and providing information related to oil and gas●Research & development　Conducting R&D activities from the perspective of building and strengthening relations with oil and gas producing countries, satisfying Japanese companies’ needs, and securing resources●Dissemination of achievements and reinforcement of training of engineers　Demonstrating the results of JOGMEC’s activities at international exhibitions and implementing collaborative projects with universities

Coal Resource Development

●Multi-faceted approaches to coal-producing countries　Conducting joint operations with coal-producing countries●Provision of finance assistance Providing equity capital and liability guarantees for coal exploration and development by Japanese companies●Geological surveys　Conducting geological surveys as a basis for exploration and development projects●Collecting, analyzing, and providing information　Collecting, analyzing, and providing information related to coal resources●Technology transfer　Transferring coal mining technologies of production and safety and so forth●Technological development　Demonstrating and introducing low grade coal technologies

Geothermal Resource Development

●Geological surveys and grant subsidies　Conducting geological surveys to evaluate geothermal resource potential and granting subsidies to Japanese companies etc. for initial surveys of geothermal resource development●Provision of financial assistance　Providing equity capital and liability guarantee for exploration and production of geothermal resource by Japanese companies●Gathering, analysis and provision of information　Gathering, analyzing and providing information related to geothermal resource development●Technological development　Conducting R&D projects relating to geothermal resource development

Metals Strategy, Exploration,and TechnologyDevelopment

●Multi-faceted approach to metal resource-rich countries　Conducting geological surveys to help Japanese companies secure mineral interests and to support their exploration projects ; and also conducting Deep-seafloor resource surveys●Provision of financial assistance　Providing equity capital, loans and liability guarantees for metal exploration and development by Japanese companies●Geological surveys　Conducting geological surveys to help Japanese companies secure mineral interests and to support their exploration projects:; and also conducting Deep-seafloor resource surveys●Collecting, analyzing, and providing information　Collecting, analyzing and providing information related to metal mining●Developing human resources　Developing human resource in metal resource development●Technological development　Developing exploration techniques and production and recycling technologies

Stockpiling of Resources ●Safe and efficient operation of national petroleum stockpiling　Overall management of national petroleum stockpiles and stockpiling facilities under integrated management, providing support to private-sector stockpiling, and engaging in international cooperation●Steady promotion of LPG stockpiling　Overall management of national LPG stockpiles including stockpiling facilities under integrated management, and constructing rock cavern underground stockpiling bases（until fiscal 2012）●Operations related to cavern mining Technology●Stockpiling and trend surveys of rare metals　Releasing and procuring materials, and research for rare metals markets and industry trends

Mine Pollution Control ●Providing technical support to entities implementing mine pollution control projects, conducting technology development, and providing information and extending financial support to private companies●Sharing technologies, know-how, and information related to mine pollution control●Technical support for governments of resource-rich developing countries　　


JOGMEC's Activities

Oil and Gas Upstream Investment and Research &Development

●Decided to provide equity capital for asset acquisitions and Liability guarantees to 6 projects, which are related to

LNG projects in Australia or shale gas projects in Canada. These are expected to contribute to diversification of

future LNG supply sources to Japan

●Established 4 new cooperative frameworks with the governments or the national oil companies of oil and gas

producing countries including Mozambique, which is expected to be one of major LNG suppliers to Japan

●Launched a new initiative, “Solution Providing with Innovative Technologies.” to assist NOCs in overcoming

technological challenges in upstream oil and gas projects, by using Japanese innovative technologies from other

industrial sectors

●Drew up a conceptual plan of the CO2 EOR pilot test for the Lower Zakum Oil Field located in Abu Dhabi

●Conducted the world’s first offshore production test of methane hydrate


●Started up a new geological survey in Mozambique

●Conducted a new project for an overseas coal development potential survey and 3 continuous ones

●Founded an equity capital and liability guarantee system to ensure stable supply of coal resources

●On the purpose of transferring mining and security technologies, started to accept trainees from overseas in

addition to providing opportunities for overseas training like in Vietnam, etc.


●Swiftly reinforced the subsidy program, and flexibly supported geothermal resource development surveys. Adopted

8 large-scale projects and 7 community-based small projects

●Adopted the airborne geophysical research method for the first time in Japan

●Founded the equity capital and liability guarantee program for the promotion of domestic development of

geothermal resources

●Promoted understanding for geothermal resource development by holding seminars, and issuing and supplying

brochures for publicity

Metals Strategy, Exploration,and TechnologyDevelopment

●Transferred the Frontera JV Project, which includes a world-class copper and gold deposit, to a Japanese company

●Was awarded the “2012 Exploration of the Year Award” in the worldwide mining convention by identifying the

promising platinum group metals deposit in the Waterberg JV Project

●Discovered a new ore body consisting of large-scale seafloor massive sulfides in the Izena sea hole located in the

Okinawa sea area

●Concluded 3 new cooperation framework contracts with resource-rich countries such as Kazakhstan, etc.

●Started on-site demonstration of the new bioleaching technology

●Adopted the Japan’s first lithium development project for liability guarantees

Stockpiling of Resources

●Completed construction of the world’s largest underground national LP Gas stockpiling bases that locate in

Kurashiki and Namikata respectively

●Completed reconstruction on above ground facilities in the Kuji National Petroleum Stockpiling Base which was

damaged by the tsunami in March 2011

●Achieved the cost reduction target under the 2nd-period medium-term plan

●Completed additional rare metals procurement as planned

Mine Pollution Control

●A New Neutralization Plant at the Abandoned Matsuo Mine : Received a certificate of appreciation from the

Governor of Iwate Prefecture for maintaining the limpid stream of the Kitakami River for 30 years

●Made significant progress in the study of passive treatment for achieving a large reduction in cost

●Dispatched a mine pollution policy advisor to Peru

Extended the period of mine pollution control technical cooperation by one year as requested by the Government

of Peru

●Held mine pollution control seminars in 5 countries including Myanmar. The seminar held in South Africa was also

attended by delegates from 6 neighboring countries

Highlights of the Fiscal Year ended 31 March 2013（April2012 〜March2013）

5Annual Report 2013

In order to promote development of oil and gas resources by Japanese companies, JOGMEC supports the Japanese government to strengthen the relationships with oil and gas producing countries and Japanese companies to conduct oil and gas exploration and development by making the most of our own functions.

CHAPTER

1Oil and Gas UpstreamInvestment and Research & Development

Oil and Gas Upstream

Investment

and Research & Development

Coal R

esource

Develo

pment

Geo

thermal R

esource

Develo

pment

Sto

ckpilingM

ine Pollutio

n Contro

lFinancial R

eviewM

etals Strategy, Exploration, and

Technology Developm

ent

Preparatory stage Exploration stage Development stage Production stage

Areastrategy

Preliminarystudies Negotiation

Geological surveyGeophysical survey Drilling

Feasibilitystudy

Production well drilling

Facilityconstruction

Productionoperation

Negotiation for extending petroleum

rights

Technical Assistance

Intelligence Assistance

Financial Assistance

支　援詳　細

Subsidies for AcquiringPetroleum Rights

Equity Capitalfor Exploration

Liability Guarantee

Equity Capital for natural gas liquefactionand Asset Acquisition

Overseas Geological Surveys

Technical Development /Technical Support

LNG Vessel

Collection, Analysis andOffering of Information

Geophysical survey

Assisting Exploration, Development and Production of Oil and Natural Gas

Building and strengthening the relationships with oil and gas producing countries

　In order to contribute to ensuring a stable supply of energy resources to Japan, JOGMEC, taking advantage of its unique position as a government agency with high technical capabilities, has been working to build and strengthen the relationships with oil and gas producing countries through following activities: the implementation of joint projects on technical studies and technology development, the provision of hands-on training in exploration, development and production engineering, and bilateral and multilateral collaborations. Moreover, JOGMEC strives to strengthen the presence of Japanese oil and gas sectors as well as JOGMEC itself by actively participating in international conferences and international oil and gas exhibitions.

Providing financial assistance for exploration and development activities by Japanese companies

　It is significant for energy security in Japan to enable Japanese companies to engage oil and gas exploration and production activities. Since oil and gas exploration and development activities require large scale investments over extensive periods of time and involve extremely high risks, it is necessary to diversify investment in various projects, in geographical location, as well as seeking partnership with foreign business counterparts and in different development phase Investments in such high risk operations would impose significant burdens on companies. Thus, JOGMEC provides financial assistance to cover up to 75% of total costs of project companies by providing equity capital and/or liability guarantees.

Collecting, analyzing, and providing information

　As a specialist organization supplying data on upstream oil and gas operations, JOGMEC surveys and analyzes a wide range of issues, including the global resource and energy situation, regulations and tax regimes in oil and gas producing countries, information on newly opened exploration areas, and the activities of international oil companies, and shares the results of its surveys and analyses with private companies and other relevant entities. JOGMEC has also been expanding its human network of researchers and research institutions in Japan and overseas, so as to supply timely information to a wide range of parties, including Japanese companies, the government, and other relevant institutions.

Contributions in the field of technology

　JOGMEC provides various technical supports for the activities of oil and gas exploration and production companies in Japan. A broad range of activities are conducted including: geological surveys for E&P projects; technology development based on corporate and resource diplomacy needs; oil and gas field evaluation studies; collection of technical information; provision of training for both domestic and overseas technical staff; analysis of data on domestic oil and gas resources; and joint research with oil and gas producing countries.

JOGMEC’s Oil and Gas Development Support

7Annual Report 2013

Business Overview

Multi-faceted approaches to oil and gas producing countries

【Implementation of joint projects and signing of basicagreements】　Establishment of joint projects and cooperative frameworks with oil and gas-producing countries is an effective measure for building relationships with those countries, supporting the government’s diplomatic efforts and raising the profile of Japan’s technological strength.　In fiscal 2012, JOGMEC established 4 new cooperative frameworks. With respect to Mozambique, which large natural gas reserves have been confirmed in and is expected to be one of the major LNG suppliers to Japan, we built a cooperation framework for the area of human resource development together with the National Petroleum Institute and the National Hydrocarbon Company of Mozambique. Regarding the United Arab Emirates, which has the largest oil resources for which Japan owns the right to explore or develop the fields, we extended the Memorandum of Understanding (MOU) with the Abu Dhabi National Oil Company (ADNOC) with a view to updating existing upstream interests as well as obtaining new ones. In addition, we concluded the MOU with the Province of British Columbia (BC) in Canada with regard to cooperation in gas-related areas including GTL (Gas-To-Liquid). We also concluded the Memorandum of Cooperation (MOC) with the National Oil and Gas Authority (NOGA) in Bahrain. Furthermore, we consented to extension of the agreements with the national oil companies of following oil and gas producing countries concerning comprehensive cooperation: the heavy oil upgrading technology development with Venezuela, the joint study on CCS-EOR project with Libya, and the deep-water geological surveys with Mexico.　

【Training of overseas technical experts】　Since we started training projects in 1989, we have accepted 2,992 experts from a total of 46 countries, and our programs have been highly valued by the experts as well as the countries they are from. In fiscal 2012, we provided 2 training courses: the “Drilling Management Course” and “Petroleum Reservoir Engineering Course”, attended by 17 trainees from 15 countries and 21 experts from 19 countries, respectively. Also, for the fourth year of the “Project for 500 experts from Iraq”, we brought in 98 Iraqi engineers for 5 training courses while

accepting 26 Mozambican engineers by building a cooperation framework in the field of human resource development. Further, we supported the training programs implemented by private companies for engineers and students from the United Arab Emirates (UAE), Indonesia, Qatar, Ecuador and Myanmar. Although the major objective of these training programs is technology transfer, the organizational and personnel exchanges that occur through the programs are expected to contribute to the smooth implementation of future joint projects between Japan and oil-and gas- producing countries.

【Provision and collection of information at internationalexhibitions and conferences】　In fiscal 2012, we took part in and made presentations at international exhibitions in Libya, Mexico and the United Arab Emirates (UAE) where we actively collected information through face-to-face interactions, and pitching Japan’s technological strengths.　Also, at the government-sponsored “LNG Producer-Consumer Conference”, which was the world’s first global conference in the field where representatives from the public and private sectors assembled from both the producer and consumer sides, the President of JOGMEC delivered a speech concerning the roles of JOGMEC in LNG-related projects. In addition, JOGMEC participated in the joint study between the governments of Japan and India, whose import volumes of LNG is expected to significantly increase.　Moreover, as part of industrial cooperation with oil and gas-producing countries in the areas other than the resource area, we have been encouraging Japanese companies to invest in Saudi Arabia, send market survey missions and conduct feasible studies. As a result, a total of 8 companies have decided to make investments in 6 projects so far.

Financial assistance for exploration anddevelopment activities by Japanese companies

　In fiscal 2012, JOGMEC provided finance assistance to Japanese companies which are involved in shale gas development projects in Canada and LNG projects in Australia. These projects are expected to contribute to diversification of future LNG supply sources to Japan.　Specifically, JOGMEC decided to provide equity capital for asset acquisitions by INPEX Gas British Columbia Ltd. and JAPEX Montney Ltd., both of which are engaged in shale gas development projects in the Canadian province of British Columbia. JOGMEC provided a liability guarantee for Cutbank Dawson Resources Ltd. besides, which is similarly engaged in the development project in British Columbia. Diversifying its geographical resources, JOGMEC also decided to provide equity capital for asset acquisitions by Pan Pacific Energy K.K., which is engaged in the Wheatstone LNG project in Western Australia; while, at the same time, JOGMEC provide a liability guarantee for its subsidiary, PE Wheatstone Pty. Ltd. Further, in connection with Ichthys LNG Project, led by INPEX Ichthys Pty Ltd as the Japanese operator, JOGMEC decided to provide a liability guarantee for the company.　In addition to LNG projects, JOGMEC decided to provide a

■Petroleum reservoir engineering course

Fiscal 2012 Achievements

Oil and Gas Upstream Investment and Research & Development


liability guarantee for CIECO Exploration and Production (UK) Limited, which is engaged in oilfield development project in the UK portion of the North Sea.　As described above, for fiscal 2012, JOGMEC adopted 7 new projects comprised 3 provisions of equity capital for asset acquisitions along with 4 liability guarantees. Consequently, as of the end of March 2013, the outstanding equity balance was equal to 172.7 billion yen and the outstanding liability guarantee balance totals to 525.4 billion yen. Since the foundation of JOGMEC, a total of 4 projects (involving 6 companies) have already reached production stage. JOGMEC is earning dividend income from 1 of the 4 projects.

■Outstanding equity balance and the number of project companies at the end of fiscal year.

2,000

10 10 10

14

2023

29

39 40

1,800

1,200

800

400

0

442 450 500567

669 688836

1,043

1,727

Fy10 Fy11 Fy12Fy09Fy08Fy07Fy06Fy05Fy04

20

0

hundred million yen

36

■Outstanding liability guarantee balance and the number of project companies at the end of each fiscal year.

5,000

4,000

6,000

2,146

2,866

3,504

2,6502,370 2,445 2,440 2,509

5,254

1311

14 15

9 9 9 1013

3,000

2,000

1,000

0Fy10 Fy11 Fy12Fy09Fy08Fy07Fy06Fy05Fy04

hundred million yen

40

20

0

Geological and geophysical surveys

　With the aim of allowing Japanese companies to acquire interests, we are conducting geological and geophysical surveys as an initial stage of exploration for oil and natural gas.

【East Siberia】　Eastern Siberia has large potential reserves of oil and natural gas, and is very important for Japan’s diversification of supply sources in the light of its potential reserves and geographical proximity.　JOGMEC has been working to promote the entry of Japanese companies into Eastern Siberia through the geological and geographical surveys, the support of government’s energy-related diplomatic efforts, and the provision of information and knowledge.　With regard to the geological and geographical survey

projects, JOGMEC is conducting joint exploration with Russian companies, including drilling of exploration wells and evaluation wells, and has engaged in the technical evaluation work in 3 blocks in Irkutsk, where oil production has been confirmed. Following the result of the survey, JOGMEC called for bids for a part of these blocks, aiming to hand it over to Japanese companies and promote their activity in the area. The handover process is under way.　In addition, JOGMEC entered into the joint study agreement and is evaluating oil and natural gas potential in a block in Irkutsk that is owned by another Russian company. Further, JOGMEC has been actively supporting the government’s energy-related diplomatic efforts by cooperating in Japan-Russia intergovernmental consultations based on an agreement between the Russian state-run companies and the Agency for Natural Resources and Energy. These activities are expected to further stimulate the exploration and development activities in Eastern Siberia, and furthermore lead to the diversification of supply sources for Japan through the entry of Japanese companies into the area.

【Southeast Asia (onshore Cambodia and offshore Southern Vietnam)】　In Northern Cambodia’s onshore area, we completed the 2D seismic survey which started in February 2012. Also, we completed a 2D seismic survey and surface geochemical survey in Vietnam's southern offshore area, for which we had signed the Agreement concerning geological and geophysical surveys with the Vietnamese national oil company, PetroVietnam. Through these surveys, we have successfully obtained priority negotiation rights for Japanese companies with regard to the acquisition of blocks in Cambodia and Vietnam.　In addition, we have completed the joint study in the deepwaters in the northwestern area of offshore Mexico and an oilfield study in southern Iraq, and received high acclaim from these countries. Additionally, we continued a series of studies including seismic interpretation of an onshore oilfield in Iraq, etc.

【Kenya】　We started a new survey in onshore Kenya. By signing the Agreement with the National Oil Corporation of Kenya(NOCK) concerning joint surveys such as Ful l Tensor Gravity Gradiometry(FTG) and 2D seismic survey, etc., we started and completed the FTG survey. We are now making necessary preparations for embarking on seismic data acquisition.

【Oil and gas exploration in offshore Japan】　JOGMEC is responsible for oil and gas exploration program in Japan by government as “Kokunai Kiso-Chosa”, using “Shigen”, a 3D seismic vessel. In fiscal 2012, JOGMEC conducted 5 seismic surveys. The survey areas are offshore Hidaka, offshore Iwate, offshore Miyazaki, offshore Esashi, and offshore Okinawa-Miyako. The total area of seismic acquisition is approx. 6,000 square kilometers as 3D seismic survey. Processing and interpretation of data obtained in previous years were on going. On the basis of geophysical exploration using Shigen, the first exploration well (exploratory test well Joetsu Kaikyu) is scheduled between FY2011 and Fiscal 2013.

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■3D seismic vessel “Shigen”

Collecting, analyzing, and providing information

【Dissemination of information through briefings and printed publications】　JOGMEC regularly provides information for relevant industries, energy policy agencies, etc., by holding a monthly briefing session, and issuing the journal “Oil and Natural Gas Review” bimonthly. 　While offering information on a regular basis as described above, we are holding seminars to provide information for many participants.

【Holding seminars】　With regard to the topics in which Japanese companies are supposed to be interested, we are holding seminars by inviting globally renowned, knowledgeable experts. Some of the topics we handled in seminars for fiscal 2012 are as shown below.・“Impacts on the international natural gas market due to the LNG exported by the US, and the increase in the production of shale oil”・“Sino-Russian Oil and Gas Corporation: The Reality and Implications”

Technology development

　 We are engaged in technology development which will contribute to the progress of intergovernmental talks, and help Japanese companies overcome the technological challenges they face, as well as fundamental studies from medium- and long-term perspectives by designating the maximizing oil recovery, the oil and gas reservoir characterization, the well drilling and field development, the unconventional hydrocarbon exploitation, the oil and gas utilization, and the environment-conscious oil and gas exploitation as priority areas.

【Methane hydrate survey and technological development】　In Japan, research and development of methane hydrate has been conducted in accordance with the “Japan’s Methane Hydrate R&D Program” drawn up by the Ministry of Economy, Trade and Industry in 2001. During Phase 1 which was completed at the end of fiscal 2008, we successfully obtained necessary outcomes by achieving the world’s first onshore production test using, “depressurization method”. In Phase 2,which began in fiscal 2009, we have been working on research and development of methane hydrate as a member

of “Research Consortium for Methane Hydrate Resources in Japan. (MH21)”organized under industry-academia-goverment cooperation.　In fiscal 2012, we completed an offshore production test of methane hydrate for the first time in the world off the coasts of the Atsumi Peninsula and the Shima Peninsula and produced gas of approx. 120,000 m3 (approx. 20,000 m3/day) during the approx. 6-day period of the test. The first offshore production test was not for the purpose of commercial production, but as an experiment in the exploratory stage. However, as valuable data were obtained for the future practical application of methane hydrate located under the seabed by identifying the status of production of this methane hydrate, and the impact on the surrounding environment, etc., it is hoped that the test results will significantly contribute to progress in the research and development of methane hydrate. As a global pioneering project, we are determined to promote the development of technologies which will be continuously required by planning a second offshore production test, and proceeding with enhancement of the technology platform for future commercial production through the use of the test results.

【Joint research on CO₂EOR with oil producing countries】　CO₂EOR (CO₂ Enhanced Oil Recovery)* is one of the JOGMEC’s priority technologies highly acclaimed by oil and gas-producing countries, with a wide range of achievements ranging from basic studies to field applications. In fiscal 2012, we drew up a conceptual plan of a CO₂EOR pilot test for the Lower Zakum Oil Field located in Abu Dhabi. Also, we conducted a CO₂ capture and source survey, and reported to the relevant party of Abu Dhabi. In addition, we have been conducting a preliminary survey for monitoring between wells through the use of seismic and electromagnetic technologies for conducting proper pilot tests. Further, we started a survey with a view to joint demonstration of CCS (CO₂) EOR with Vietnamese parties.

■Conceptual view of CO₂EOR

* Technology for increasing oil recovery by CO₂ injection into oil reserve.

【Multiple uses of elemental technologies – environment-conscious oil and gas exploitation】　By packaging elemental technologies, which have been developed through basic studies conducted by Oil & Gas Upstream Technology Unit as well as joint studies with national oil companies of oil and gas-producing countries such as

Oil and Gas Upstream Investment and Research & Development


Mexico, with environment-related technologies (for environment, energy-saving, new energies, etc.) owned by Japanese companies, we are pursuing effective use or reduction of produced water, associated gas, and emissions, etc., as well as optimization (maximization) of the oil and gas production. We are planning to propose joint studies of the feasibility studies, etc., to oil and gas-producing countries.

【Solution Providing with Innovative Technologies】　JOGMEC launched a new initiative, “Solution Providing with Innovative Technologies” with the aim of strengthening relationships with oil and gas producing countries, by proposing technology solutions through joint efforts made by JOGMEC and Japanese companies in response to technological issues (needs) faced by exploration and production fields.　In f iscal 2012, we have carr ied out 13 “innovative technology study”. Also, we hosted the “Pre Techno Forum” to introduce this new initiative(in January 2013, 230 attendees) and invited a representative from the Vietnam national petroleum company, PetroVietnam, to deliver a lecture, and encouraging exchange of information with Japanese companies. Through this opportunity, we examined the possibility of joint studies between PetroVietnam and JOGMEC.

Technology transfer and training

　JOGMEC, as part of technology transfer, conducts various activities to train oil development engineers in Japan and to promote intercommunication among engineers, as well as utilizing its intellectual properties. Some of the achievements we made for fiscal 2012 are as shown below.・JOGMEC delivered lectures on petroleum and natural gas development at the University of Tokyo, Kyoto University, Waseda University, Kyushu University, Chiba University, Shinshu University, University of Kitakyushu, etc.・JOGMEC held “JOGMEC-TRC Week 2012” with the aim of reporting the results of studies and surveys conducted by Oil & Gas Upstream Technology Unit, encouraging the exchange of opinions between specialists, and constructing networks of engineers. The forums, featuring the latest technologies for the monitoring of hydrocarbon residues, the pilot project concerning underground methane production technology, methane gas production technology using CO2, overseas geological structure surveys and future prospects, were attended by a total of 565 persons.・JOGMEC earned 470 million yen in royalties in fiscal 2012 from Oil & Gas Upstream Technology Unit’s intellectual properties, which represent the fruits of its research.

■Patent revenues

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*Examples include Geopilot (a device for controlling the direction of a drill bit) and Ecoscope (a tool used in well-logging work, which involves measuring the characteristics of oil and gas layers).

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JOGMEC undertakes strengthening of relationships with coal-producing countries, conducts and supports geological surveys, gathers and provides information, demonstrates and supports coal mining technology and so forth, and offers financial support by applying equity capital and liability guarantees.

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2 Coal Resource Development

Conducting and supporting geological surveys

　JOGMEC encourages Japanese companies to implement coal development in coal-producing countries undertaking geological surveys jointly with the government agencies of coal-producing countries and so forth and supporting survey activities conducted by Japanese companies for initial exploration and so forth in order to contribute to the steady coal supply to Japan.

Provision of financial assistance

　To assure steady coal resources supply, JOGMEC supports exploration activities of Japanese companies through making equity investments at the exploration stage with high risks.　Also, as a large amount of funds is required at the development stage, JOGMEC supports smooth funding for the companies by guaranteeing liabilities for borrowing funds from banks.

Gathering and providing information

　Obtaining information swiftly and accurately is one of the most critical factors to win the keen competition for natural resources

in the ever-changing global energy circumstances.　JOGMEC supports Japanese companies which are engaged in coal development by comprehensively gathering, analyzing and, providing information on the coal policies of coal-producing countries and the trends of resource developing companies, as well as coal development technologies.

Demonstrating and disseminating technologies

　JOGMEC contributes to a relief of the balance for supply and demand, according to agreements with the governments of coal-producing countries by demonstrating and disseminating excellent Japanese coal related technologies such as low grade coal reformation to them and by transferring coal exploration and safety technologies to mainly Asian coal-producing countries. At the same time, JOGMEC contributes to steady coal production by establishing multi-layered cooperative relationships with coal-producing countries.

Preparatory stage & Basic exploration stage Explorat ion stage Development stage Production stage

Investment environmental evaluation

Geologicalpotentialevaluation

Geological surveyGeophysical survey

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Development PossibilitySurvey

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Joint Venture Exploration

Technical Development/Technical Support

Drillng survey

Airborne geophysical surveys

Geological survey

Assisting Exploration, Development and Production of Coal

JOGMEC’s Coal Resource Development Support

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　In response to the revision of the Japan Oil, Gas and Metals National Corporation Act in September 2012, JOGMEC additionally acquired the capability to support coal resource development activities. As soon as started operation in September, JOGMEC has swiftly prepared and applied the coal resource development support system such as equity capital and liability guarantee according to requests of Japanese companies and coal-producing countries.

Building relationships with major agencies of coal-producing countries and so forth

　Coal is the energy resources which has been supporting social development since the Industrial Revolution in the 18th century. In Japan, currently coal-fired power generation provides approx. one fourth of electricity. Also, iron manufacturing industry which produces the world’s second largest volume of crude steel uses coal as a raw material. Thus, coal is an indispensable resource for Japan. However, in recent years, the demand for this resource is increasing globally and in particular in newly developing countries. 　JOGMEC, in line with the national energy policies and strategy for securing natural resources, promotes strengthening ties with major coal-producing countries which JOGMEC is taking over from NEDO, and exchanging between organizations. Achievements in fiscal 2012 are: announcement of the intention to promote strengthening of intergovernmental relationships based on geological surveys and so forth in the Japan-Mozambique vice minister level policy dialogue for resources area (held in October), and share the achievements of research projects in the Japan-Vietnam coal policy dialogue and the Japan-Indonesia coal policy dialogue (both held in March). JOGMEC attempts to build and reinforce relationships with the counterparts by holding or attending steering committee meetings, technical committee meetings, workshops and other conferences with the representatives of Vietnam National Coal and Mineral Industries Group (VINACOMIN), the Ministry of Energy and Mineral Resources of Indonesia, the Ministry of Mineral Resources of Mozambique, the Ministry of Mining Industry of Mongolia and so forth.

Conducting and supporting geological surveys

【Geological surveys and so forth】　As for overseas geological surveys, JOGMEC jointly undertakes basic examination such as preliminary geological surveys and so forth in areas where coal resources are

expected to be available but which are not easily accessible to private sectors under the agreements with the governments of coal-producing countries. In October fiscal 2012, JOGMEC dispatched a team of researchers to Mozambique in connection with a new project, and they started preliminary surveys in 5 provinces including Niassa. In addition to this, JOGMEC conducted a boring survey in Vietnam (Dong Ri area) in succession to NEDO.　Also, as for development possibility survey on overseas coal, JOGMEC identifies overseas coal reserve, studies geological structure and supports surveys overseas to identify the potential for development through grant funding. In fiscal 2012, JOGMEC supported the following surveys: one new project (in Australia) and three projects taken over from NEDO (2 in Indonesia and 1 in Australia). JOGMEC has identified the presence of 8,100 tons of available coal (i.e., general coal used for thermal power generation) through these explorations.

【Joint preliminary surveys in coal-producing countries】　To cope with issues concerning environmental measures and low-grade coal reformulation and so forth which are the obstacles to coal development in coal-producing countries, JOGMEC studies some corrective measures and the applicability of Japanese technologies to them by conducting surveys in cooperation with the governments’ agencies of coal-producing countries. In fiscal 2012, JOGMEC undertook a survey on the reduction of environmental load brought about in the course of coal production in Vietnam (i.e., acid soil reformulation and greening) which had proved the effectiveness of Japanese technologies. Also, in Indonesia, JOGMEC conducted a coal quality and property test and so forth as a preliminary test for the

■Vice minister level policy dialogue (Mozambique)

■Boring core survey (Vietnam)

■Greening of piles of coal waste (Vietnam)


Test of new greening method(Sept,2011)

Cordination in 15moths later(Dec,2012)



evaluation of applicability of low-grade coal to coke and so forth.【Industrial cooperation projects and so forth】　In accordance with the needs of coal-related industries in coal-producing countries, JOGMEC undertakes a project to draw up the most effective plan for a chain of coal-related industries in terms of both material and energy flow by organically combining Japanese clean coal technologies, with due considerations to the effectiveness and environmental load of coal resources reserved in some model coal mining areas.　In fiscal 2012, with a view to drawing up plans, JOGMEC conducted some needs surveys on coal-related industries in Mozambique, Mongolia, Vietnam and Indonesia as well as preliminary researches on applicability of Japanese technologies to them. Also, JOGMEC drew up a schedule to implement existing plans for China.

Provision of financial assistance

　The importance of projects for acquiring coal resources overseas has been increasingly recognized. JOGMEC supplies risk money appropriately and effectively to the exploration and development conducted by Japanese companies through a financial support system which provides equity capital for coal exploration and liability guarantees for development. With this newly established financial support system, JOGMEC has paved the way for assisting the companies from the initial exploration to the development and production consistently.　In fiscal 2012, JOGMEC made presentations and exchanged opinions on the system providing equity capital for coal exploration and liability guarantees for development to coal development companies, steel companies and trading companies and so forth so as to have them know the new system. Further, in Australia which is the largest coal supplier to Japan providing approx. 60% of the total, JOGMEC held an explanatory meeting inviting relevant local companies.

　


　As a public knowledge and information center on exploration and development, JOGMEC offers information finely tuned to the needs for studying and drawing up Japanese companies’ coal exploration, development and related technology strategies, and the government’s resource diplomatic strategies. In fiscal 2012, JOGMEC conducted the following surveys:(1)US shale gas development‘s impacts on the coal industries of the US and Colombia, and the coal markets of the Atlantic

region and Asia (2)Coal export controls and coal development progress in Indonesia(3)Coal flow and construction of the coal transport infrastructure in China(4)Coal export capacity of Australia(5)Progress in coal resource development in western Siberia and its potential for export to the Asia-Pacific region(6)Progress in coal resource development and construction status of transport infrastructure in Zimbabwe and Kenya, and their potential for export to Japan(7)Current global coal status in each major coal-producing country – fiscal 2012 version　Further, JOGMEC disclosed a progress report on the overseas coal sophistication surveys JOGMEC took over from NEDO on its website, and started offering information on coal resource development in cooperation with overseas offices.

Demonstrating and disseminating technologies

　As it is important to reinforce multi-layered relationships with coal-producing countries in order to ensure steady overseas coal supply, JOGMEC conducts projects aimed at demonstrating and disseminating coal-related technologies developed in Japan in accordance with issues and needs of coal producing countries. Specifically, responding to the request from the Government of Indonesia who strives to utilize low grade coal, JOGMEC supports demonstration projects in Indonesia conducted by a Japanese company possessing hydro-thermal brown coal reformulation and slurry technology. In fiscal 2012, JOGMEC checked the crushing, reformulation, hydro-extraction and slurry process in a demonstration plant, and demonstrated the long-term stability and applicability to fuel products of the slurry process through a combustion furnace test.　Also, utilizing the experience and knowledge of underground mining technologies which have been accumulated until now, JOGMEC is implementing a project for transferring mining technologies to mining engineers, mine safety supervisors and so forth of coal-producing Asian countries to improve productivity and efficiency, and to reduce the number of accidents taking safety measures. In fiscal 2012, JOGMEC accepted approx. 140 trainees from Vietnam in Mining Technology Training Center in Kushiro while dispatching Japanese mining technology special ists to Indonesia and Vietnam, to transfer mining technologies and safety techniques to approx. a cumulative total of 13,000 trainees.■An explanatory meeting attended by relevant

　local companies (Australia)

■Mine rescue technique training course (conducted by sending instructors)

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3 Geothermal Resource DevelopmentJOGMEC conducts geological surveys, grants subsidies, provides financial assistance and gathers, analyzes and provides information on geothermal resource development.

Geological surveys and grant subsidies

　Since the Great East Japan Earthquake in 2011, Japan has faced the urgent challenge of ensuring a steady supply of energy and of coping with the vulnerability of the energy supply and demand structure. The usage of renewable energy, particularly geothermal resources, is gaining momentum. Geothermal energy, which can generate a steady supply of electricity, has considerable promise as a base load electricity source. JOGMEC offers support by granting subsidies for initial surveys characterized by high risk, such as land surface surveys, well drilling surveys, etc., which are undertaken with the aim of confirming the potential of geothermal resources for power generation implemented by Japanese companies. The aim is for Japan’s geothermal resources to be effectively used, and for further efforts to be invested in the development of geothermal resources. JOGMEC also contributes to projects that aim to develop geothermal resources in harmony with local communities and the environment by promoting public understanding of geothermal resource development, revitalizing local communities, and offering support in the form of subsidies, etc., to help alleviate environmental loads.　JOGMEC contributes to efforts made by Japanese companies toward geothermal resource development by conducting wide-area studies, such as air geophysical surveys, to evaluate geothermal resource potential and identify areas which are expected to have high geothermal resource potential, but have not yet been sufficiently surveyed.

Providing financial assistance

　Huge costs are incurred in the exploration part of geothermal resource development projects. Even if a promising reserve of geothermal resources is found at the exploration stage, major risks remain, such as the long period of time between completing the construction of a power station and its being brought on stream. To cope with risks such as these, JOGMEC offers financial support for geothermal resource exploration projects for which funds may not be readily available from commercial banks. To contribute to smooth funding of the development of geothermal resources by Japanese companies and complement the activities of commercial banks, JOGMEC also provides liability guarantees for the portion of funds dedicated to construction activities that are procured by Japanese companies from commercial banks.

Gathering, analysis and provision of information

　JOGMEC gathers and provides the results of past surveys of geothermal resources, information on the latest technical trends, and useful information for the development of geothermal resources. JOGMEC supports Japanese companies engaged in geothermal resource development by engaging in publicity activities that contribute to public understanding of geothermal resource development.

Preparatory stage & Basic exploration stage Explorat ion stage Development stage Operat ion stage

Land surface survey

Stracture survey drilling

Environmental surveyMonitoring

Survey drillingFumarolic test

Reservoirevaluation

Production wellFeedback well

Power stationconstruction Operation




Subsidies for Geothermal Energy Development Survey

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Geological Survey


Drilling survey Geothermal power station

Geological survey

Assisting Exploration, Developmentof Geothermal Energy

JOGMEC’s Geothermal Resource Development Support



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　In response to the revision of the Japan Oil, Gas and Metals National Corporation Act in September 2012, JOGMEC took on the additional function of supporting geothermal resource development. On launching this new operation in September 2012, JOGMEC swift ly set up a geothermal resource development support program to cover subsidies, equity capital and liability guarantees, etc., and to rapidly and flexibly respond to inquiries from Japanese companies.

Geological surveys and grant subsidies

【Support for surveys】　In response to the revision of the Japan Oil, Gas and Metals National Corporation Act in September 2012, JOGMEC established a new subsidy program for the development of geothermal resources. JOGMEC helps to expedite geothermal resource development by granting subsidies for initial studies that are accompanied by high risks and costs, and lowers the barriers to starting geothermal resource development activities.　In fiscal 2012, JOGMEC was quick to start public offerings of projects for which subsidies would be granted after the revision of the Japan Oil, Gas and Metals National Corporation Act, and provided subsidies for eight major projects within two weeks of launching operations. For example, in the Toyoha area of Sapporo City in Hokkaido Prefecture, two wells were drilled, even though it was winter; the presence of a geothermal reservoir was successfully identified in one of them.　As for projects granted subsidies, JOGMEC supports not only major-scale projects but also small-scale projects sponsored by local communities. For small- and medium-sized companies considering the possibility of starting small-scale projects, JOGMEC held presentation meetings in Sapporo, Sendai, Saitama, Tokyo, Nagoya, Toyama, Osaka, Hiroshima and Fukuoka to explain our geothermal resource development support program. JOGMEC also extended the deadline for

applications for subsidies from the end of November to the end of December to give more time to provide support and technical advice to new entrants planning to submit an application for the first time, and to respond to their inquiries. Consequently, JOGMEC successfully adopted seven small community-based projects proposed by new entrants and provided them with subsidies. These activities have been reported in local media and are attracting increasing attention further afield. JOGMEC is thus contributing to greater awareness of geothermal resource development being undertaken domestically.　New small, community-based projects offered by small- and medium-sized companies and granted subsidies for fiscal 2012:　・Horeinoyu (Oguni area) (Kumamoto Prefecture)　・Unazuki Onsen area (Toyama Prefecture)　・Ashorocho area (Hokkaido)　・Arifukuonsencho area (Shimane Prefecture)　・Ishimatsunoen (Oguni area) (Kumamoto Prefecture)

*1：Fiscal 2012 Survey Project for Geothermal 　　Resource Development（Limited to projects by　　 local entities etc.）Successful Applicants*2：Fiscal 2012 Survey Project for Geothermal　　 Resource Development Successful Applicants

Arifukuonsencho area (Shimane Prefecture) Unazuki Onsen area (Toyama Prefecture)

Ishimatsunoen (Oguni area) (Kumamoto Prefecture)

Hongu area, Tanabe City (Wakayama Prefecture)

LegendNew small,community-based projects offered by small- and medium-sized companies and granted subsidies *1

Major projects for which JOGMEC granted subsidies*2

Horeinoyu (Oguni area) (Kumamoto Prefecture) Atagawa Onsen, Higashiizu-cho (Shizuoka Prefecture)

Oyasu area (Akita Prefecture)

Matsuohachimantai area (Iwate Prefecture)

Musadake area (Hokkaido Prefecture)

Toyoha area (Hokkaido Prefecture)Amemasudake area (Hokkaido Prefecture)

Iwakisan area (Aomori Prefecture)

Kijiyama and Shitanotai area (Akita Prefecture)

Ashorocho area (Hokkaido)

Biei area (Hokkaido Prefecture)

■Projects granted subsidies in fiscal 2012

■Drilling site,Toyoha a rea in Hokkaido




　・Hongu area, Tanabe City (Wakayama Prefecture)　・Atagawa Onsen, Higashiizu-cho (Shizuoka Prefecture)　JOGMEC has issued a guidebook which provides a road map for those planning to embark on new projects to promote the adoption of community-based small power generation systems. The contents of this guidebook are available in the geothermal resources section of the JOGMEC website. JOGMEC has also started to survey the potential for binary power generation using existing hot springs to investigate the potential for power generation projects using hot spring water that is plentiful at surface level.

【The geothermal resource potential study project】　To evaluate the potential of geothermal resources, JOGMEC decided to undertake a wide-area study using aerial surveys that employ techniques that are new to Japan and may be out of the reach of private companies, such as airborne time-domain electromagnetic and airborne gravity gradiometry surveys. These surveys will reveal the geological structures of inaccessible mountain regions or special protected zones; subsurface data are expected to be obtained with minimal impact at the ground surface. In fiscal 2012, JOGMEC concluded contracts for a survey of two regions, and have been proceeding with modification work, including installation of the survey devices in an aircraft. JOGMEC will commence the surveys as soon as the aircraft is ready. For selecting the areas to be surveyed and implementing these surveys, JOGMEC has engaged outside experts for consultation in conjunction with the Ministry of the Environment and Ministry of Land, Infrastructure, Transport and Tourism. JOGMEC has also established a framework with universities for analyzing the data. The findings obtained are thus expected to be widely applicable and usable for disaster control (i.e., prevention of landslides), hot spring maintenance, etc.

Providing financial assistance

　In response to the revision of the Japan Oil, Gas and Metals National Corporation Act in September 2012, JOGMEC established a new financial assistance program (i.e., equity capital and liability guarantees) for geothermal resource development. Since we started the program in September 2012, JOGMEC has made presentations in major Japanese cities and conducted promotion activities on behalf of private companies.

Gathering, analysis and provision of information

【Conducting trend surveys of advanced technologies】　In fiscal 2012, we carried out a survey of trends in geothermal development technology, especially EGS (Enhanced Geothermal Systems) that included site visits in the US and Australia, where we made efforts to identify the technological challenges faced by those engaged in the development of geothermal resources in Japan. Conducting these studies will allow JOGMEC to identify any problems with the technology required for steady progress in geothermal resource development in Japan; we will also launch on R&D projects relating to geothermal resource development in fiscal 2013.

　Furthermore, in a dialog on Japan-US clean energy policies with the US, which has advanced techniques in the field of geothermal resources, JOGMEC has reached an agreement on the mutual exchange of data. JOGMEC has also applied to become a contracting member of the International Energy Agency Geothermal Implementing Agreement (IEA-GIA). This will help JOGMEC build a network comprising the geothermal resource policy agencies of its 14 member countries, engineers, and researchers. We will obtain information on the technological challenges and geothermal resource policies of each country that are required to proceed with the development of geothermal resources. JOGMEC will make use of this information for future projects.

【Working to increase public awareness of geothermal resource development】　Geothermal resources are less well known than other forms of natural energy. To educate all age groups on the development of geothermal resources, JOGMEC promotes activities to disseminate and deepen knowledge of our work through a variety of media. In fiscal 2012, JOGMEC created and issued brochures and posters for children, brochures for adults, illustrated documents and models, and opened a website for disseminating information on geothermal resources. This information has been delivered to local government agencies, companies involved in geothermal resource development, next-generation energy parks, etc., and is used for presentations offered in advance in areas affected by surveys and the development of geothermal resources. JOGMEC also attempts to promote and reinforce the public’s understanding and awareness of geothermal resources by holding seminars on geothermal resource development.

■R&D site for EGS, Australia

■Poster, Brochure, and Model

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4 Metals Strategy, Exploration and Technology DevelopmentJOGMEC provides various and respective stages of support in the formation of exploration projects, development and production in order for Japanese companies to secure the interests of resources and to expand their own developments in mineral resource-rich countries.

Building and strengthening relations with resource-rich countries

　JOGMEC supports the government’s diplomacy with metal resource-rich countries, while actively making its own efforts to build and strengthen relations with these countries. Moreover, JOGMEC strives to strengthen its presence by aggressively participating in international conferences and exhibitions.

Providing financial assistance to support exploration and development for Japanese companies

　JOGMEC supports Japanese companies in the development of metallic mineral resources, by providing equity capital/loans for exploration, equity capital for asset acquisition, and liability guarantees for the development.

Promoting private-sector exploration activities through initial JOGMEC exploration

　In joint venture (JV) exploration projects with overseas organizations such as public mining companies and private companies, JOGMEC processes and analyzes satellite images and conducts geophysical exploration, geological surveys, and drilling surveys. After identifying the presence of resources, JOGMEC transfers promising projects to Japanese companies.　JOGMEC supports overseas exploration activities of Japanese companies at the relatively early stages by conducting geological surveys and subsidizing such activities.　In addition, JOGMEC conducts surveys on sea-floor massive sulphides and cobalt-rich ferro-manganese crusts etc. in the ocean close to Japan based on the government’s

“Basic Plan on Ocean Policy”, by the use of marine resource research vessel “Hakurei” and so on. Also, the researches for manganese nodules at Hawaiian offshore and rare earth mud are undertaken.


　JOGMEC gathers and analyses information useful for Japanese companies which conduct mining activities overseas, such as

the status of geology, ore deposits, exploration, development, and production; individual countries’ mining policies and regulations; supply-and-demand trends of metals; activities of overseas mining companies; and environmental issues related to mining activities. In order to provide such information widely, we are continuously supplying email magazines, websites, seminars and periodicals.　JOGMEC owns the Mineral Resources Information Center, the only specialist library for mineral resources in Japan. It holds a collection of approximately 50,000 books and geological maps, which are open to the public.

Developing human resource

　JOGMEC hosts seminars on resource development and sends staff as lecturers to universities or other organizations in order to encourage university students and workers to acquire knowledge, which is for dealing with the recent labor shortages in the resource development sector.

Supporting the technological development most needed by the mining industry and policy

　JOGMEC conducts technological developments, selecting subjects of study from among the various production technologies used in developing metallic mineral resources, in order to meet the needs of Japanese companies and the governmental policy. Specifically, we are carrying out research and development projects on metallurgical technologies that use bacterial leaching, technologies for recovering rare metals from used products and processing technologies for refractory mineral ores at domestic nonferrous smelters.　JOGMEC also publicly invites proposals for the research and development projects that are required for Japanese companies to secure and procure new resources in Japan and overseas, and selects from among the proposed projects, considering whether their purposes are consistent with the government’s policy and whether they are expected to be technically feasible. JOGMEC provides financial and technical support for the implementation of the selected projects.

Preparatory stage & Basic exploration stage Explorat ion stage Development stage Production stage

Investment environmental evaluation

Geologicalpotentialevaluation

Geological surveyGeophysical survey

Drilling

DrillingTunneling

Feasibilitystudy

Underground miningOpen pit mining

Producing plantconstruction Production




Assisting Exploration, Development and Production of Non-ferrous Metals and Minerals

Satellite image analysis

Geological survey Drilling survey

Equity Capital and Loans for Exploration

Equity Capital Contributionfor Asset Acquisitions

Liability Guarantee

Subsidies forOverseas Field Surveys


Overseas Geological Survey

Joint Basic Exploration Scheme


Satellite image analysis

s

Drilling surveyyGeological survey/

ey

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JOGMEC’s Metals Resources Development Support



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Multi-faceted approach to resource-rich countries

【Securing rare earths and rare metals】　Since the beginning of fiscal 2012, the price of rare earths tended to slowly decrease, but was maintained at a high level in comparison with the period before it rapidly increased in 2010. In the face of continuous fear of export restrictions imposed by producing countries, JOGMEC and the government proactively made concerted efforts to ensure the steady supply of resources.　In Kazakhstan, we signed a Memorandum of Understanding (MOU) with the Atomic Energy Agency concerning mining development. And an opening ceremony for a mixed carbonate rare earth producing plant was held. It will be the first supplier of heavy rare earths to Japan other than China. Also, in Kyrgyzstan, in accordance with an agreement on research of rare earth potential with the Science Academy Tectonic Research Center, we are planning to jointly research tin, antimony, etc., in promising areas.　Furthermore, in Argentina, we offered financial assistance to secure interests in rare metal.

【Joint projects and cooperation frameworks with resource-rich countries】　We successfully built 3 cooperation frameworks: an MOU with the Atomic Energy Agency of Kazakhstan, an agreement concerning research of rare earth potential with the Science Academy Tectonic Research Center of Kyrgyzstan, etc.

【Providing information, exchanging information and strengthening relations with resource-rich countries】　JOGMEC is supporting the activities of companies by providing information, holding seminars, etc. To strengthen the relationships between Japan and resource-rich countries, we held a forum, “Metal Saloon”, in fiscal 2012 as a scene for networking. It was held jointly with the Embassy of Mongolia in Tokyo, and was attended by a number of members of foreign embassies in Japan, including those of the Embassy of Mongolia, as well as relevant parties of the mining industry. Moreover, in fiscal 2012, we gathered information and strengthened relationships with relevant parties of the resource and mining industries through international conferences etc.:・Attended or presented in 52 international conferences・Exchanged opinions with important persons of resource-rich countries, executives of public mining corporations, etc.・Held a “Mining Industry Investment Seminar” to make presentations concerning opportunities for investment in the Province of Quebec (Canada), Australia and Cambodia

Providing financial assistance for exploration and development by Japanese companies

　In accordance with Japan’s strategy for acquiring mineral resources*, we have achieved satisfactory results in offering financial assistance relating to both mineral type strategies and regional strategies.

*Japan’s strategy for acquiring mineral resources・The 2nd revision of the Energy Basic Plan (decided by the Cabinet in June 2010)　Aiming to increase the self-sufficiency ratio of base metals (i.e., copper and zinc) to 80% or greater by 2030, and that of strategic minor metals to 50% or greater by 2030・The financial assistance offered by JOGMEC is mentioned in one of the 5 resource securing strategies, “Intensifying financial assistance aimed at acquiring resource interests” (Drawn up and announced by the Ministry of Economy, Trade and Industry in July 2012).

【Providing equity capital for exploration and asset acquisition】　As the Japan Oil, Gas and Metals National Corporation Act was revised in fiscal 2010, we made the first financial contribution to asset purchase for the niobium project in Brazil. As a consequence, we successfully gained a record-high income of 1.2 billion yen from one project during one year. Meanwhile, on the rare earth project in Australia, in which Japan participated for the first time, products were shipped in March, marking a great step toward steady procurement.

【Providing liability guarantees for overseas development】　JOGMEC adopted Japan’s first lithium project (approx.12.4 billion yen) in Argentina, and signed an agreement on a copper and molybdenum development project (approx. 23 billion yen) in Chile, which had been adopted in fiscal 2011. Also, under the large-scale copper and molybdenum development project (Caserones project, Chile), in which 100% interest is owned by Japanese companies, the production of copper cathode was started in March, and the production of copper concentrate is expected to start in the near future.

【Providing loans for oversees exploration】　To secure a wide variety of minerals in the Pacific Rim region with high potential for metallic minerals, JOGMEC has provided loans for a total of five exploration projects (1.7 billion yen in total), including a new iron ore project in Australia, an existing base metal project in Australia, two existing minor metal projects in the Solomon Islands, and an existing iron ore project in Australia.

■Olaroz Lithium Development Project, Argentina


Metals Strategy, Exploration, and Technology Development



■Loan balance for overseas exploration projects and the number of projects implemented in each fiscal year

300

1

4

7

9

8

7

6

200

100

0

number of projects

hundred million yen

55

1

77

133

239

257269

224

Fy10 Fy11 Fy12Fy09Fy08Fy07Fy06Fy05

2

4

6

8

10

【Providing loans for exploration in Japan】　JOGMEC provided a loan of 730 million yen for exploration at the Hishikari mine*.* The Hishikari mine is a gold mine discovered in 1981 by the Metal Mining Agency of Japan (MMAJ), the predecessor to JOGMEC. The total amount of mined gold exceeded 200 tons.

Geological surveys

【Supporting Japanese companies to secure interests through JV exploration activities】　During fiscal 2012, JOGMEC conducted joint venture (JV) exploration with public and private mining companies in 36 regions of 19 resource-rich countries. JOGMEC supports Japanese companies in order for them to acquire interests in resources, by transferring the favorable results of JV exploration to Japanese companies. 　For example, JOGMEC transferred the Frontera JV Project in Chile and Argentina to a Japanese company by bidding, after identifying a world-class copper and gold deposit. Further, in 2012, JOGMEC identified promising mineral deposits and mineralized zones in South Africa and Argentina, and provided Japanese companies with the information of these exploration results with a view to transferring our achievements to Japanese

companies. Above all, the Waterberg JV Project conducted in South Africa was awarded the “2012 Exploration of the Year Award” in balloting by more than 400 companies including mining companies in an overseas mining convention. Moreover, the abovementioned Frontera JV Project was nominated as one of the 5 best exploration projects in the world.

【Geologic Remote Sensing Center in Botswana】　In connection with activities conducted by the Geologic Remote Sensing Center in Botswana, this fiscal year, we signed a new MOU with the Kingdom of Swaziland with regard to the analysis project undertaken jointly with the countries of the Southern African Development Community (SADC). Thus, the number of target countries has increased from 10 (Botswana, South Africa, Zambia, Mozambique, Angola, Malawi, Namibia, Tanzania, Lesotho and Congo) to 11. For these countries, we have been transferring remote sensing technologies, jointly conducting analysis activities, and continuously attempting to identify promising mineral deposits.

【Supporting exploration and development by private companies】　In fiscal 2012, with regard to geological structure surveys, JOGMEC extended the framework of conventional JV surveys, revised the scheme so that the surveys may be implemented jointly with Japanese companies, and adopted 2 survey projects in Laos and Australia under the new scheme. Also, we provided grant funding for a total of 5 corporate uranium exploration projects in 3 countries. As this scheme is applicable to base metals, rare metals and uranium, we are providing support in an attempt to ensure that Japanese companies may implement mining development and a steady resource supply to Japan.　Further, we handled 3 cases by offering technology support such as feasibility study (FS) for resource development projects with the aim of helping Japanese companies promote overseas projects. In particular, with regard to support for mineral processing technologies applied to refractory ore, JOGMEC engineers contributed to improving the economic efficiency of the projects by inventing a new flotation process to tackle the issues concerning the ore recovery rate. Also, by conducting a heavy rare earth FS survey, we confirmed that xenotime mineral ore contained in tin minerals forms a certain volume of resources for dysprosium in Malaysia and its neighboring countries. In the near future, technological tests will be conducted by Japanese companies.

【Deepsea-floor resource surveys】　With regard to seafloor massive sulfides, as a result of the deep drillingsurvey by the research vessel “Hakurei”, we successfully discovered a new ore body located deeper in the sea, which would not have been identified by using the conventional research vessel “Hakurei Maru No.2”. Thus, we opened up a possibility for discovering large-scale mineral deposits in the future. Also, instead of approximate resource calculation, we estimated that the amount of resources on the seafloor surface would be 3.4 million tons in line with international standards for the first time.　In the field of mining technologies, we succeeded in running a

■Boring survey, Philippines

Metals Strategy, Exploration, and Technology Development Business OverviewMetals Strategy, Exploration, and Technology Development




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mining test machine and conducting a test in the actual ocean area with seafloor massive sulfides. After making a prediction, through the environmental impact prediction model developed in advance, that there would be no major impact, JOGMEC assessed the actual environmental variation accompanying the mining test by conducting environmental monitoring during and after the mining test. In the field of mineral processing and smelting, we successfully completed design of a basic mineral processing pilot plant by conducting a flotation mineral processing test, etc.　As for cobalt-rich crusts, we submitted the application for exploratory blocks located in an area (3,000 km2) of the high seas extending over 600 km off the south-east coast of Minami-Tori-shima to the International Seabed Authority (ISA). It was reviewed and passed by the Law and Technology Committee of the ISA in February 2013. As the approved recommendation was issued by the committee, the application was successfully approved by the council of the ISA in July 2013. As for surveys on the amount of resources, we obtained data concerning thickness, quality, production conditions, etc., exceeding past records by using sea-floor drilling equipment on the undersea mountain located in the exclusive economic zone (EEZ) of Minami-Tori-shima.　With regard to rare earth mud, we conducted a sampling survey by using a piston corer, and discovered the presence of a zone with high rare earth density near the surface in the (EEZ) of Minami-Tori-shima. Also, we organized a workshop consisting of knowledgeable persons engaged in the study of

the potential of rare earth mud as future resources.　As for manganese nodules, we attempted to identify the microtopography and to survey their detailed diffusion by using an autonomous underwater vehicle (AUV), etc., and successfully obtained data for calculation of the amount of minable reserves in the blocks owned by Japan off the coast of south-east Hawaii.

Information gathering, analysis and provision

　JOGMEC is proactively supplying information* on the mining industry, based on which companies may make investment decisions, by regularly delivering and issuing reports such as “News Flash”, “Current Topics”, email magazines, a bimonthly “Metal Resources Report”, etc. In addition, we held 12 seminars and lecture meetings focusing on the latest supply and demand trends in metals and overseas resource development as well as the activity reports by each department of JOGMEC. The seminars and meetings were attended by more than 1,200 representatives of private companies and students. While seeking evaluation for the committee consisting of knowledgeable reasons of private companies and giving the feedback to our writers, we are continuously making efforts to improve the quality of our publication.　Some of the reports we published during fiscal 2012 are as shown below.・Survey on investment environments of resource-rich countries (6 countries)・Trends in the global mining industry (basic country information: 53 countries)・Survey of trends in the major mining companies (12 companies)・Mineral resource material flow (22 types of minerals)　In addition, we issued the “Metal Mining Data Book 2012” and “Rare metal Handbook 2012”.* Periodical publications and survey reports are listed on the website (http://mric.jogmec.go.jp/) of JOGMEC, which provides information on metal resources (available only in Japanese).

Human resources development

　As human resource development projects in the area of mineral resources, JOGMEC is providing on-site training and lectures on resource development for university students and working population. Some of the lectures and training sessions we offered during fiscal 2012 are as shown below.・Basic course in resource development (“Control over hazardous elements in the non-ferrous metal industry”, November 2012)・Special lectures under a comprehensive cooperation agreement, etc. (at the University of Tokyo, Kyushu University and Waseda University)・Sending of instructors to the “Training for Mining Development” offered by the International Institute for Mining Technology・Revision of the “Leaflet on metals” and “Leaflet on metal resource development technologies” (October and November, 2012)

■The mining test device running on the seafloor

■New mineral ores were discovered by conducting deep boring surveys in 2 wells in the foundation of a mound.

finding new concealed ores under the sulphide mounds

finding new concealed ores under the sulphide mounds

seafloor hydrothermal active sites and massive sulphide deposits

the unlithified sedimentary rocks and fuffsrelative height relative height




Technological development

　We are engaged in the development of technologies with the aim of securing resources for Japanese companies, responding to the technological needs of those companies, and strengthening relationships with resource-rich countries while selecting and focusing on certain technological issues.

【Developing exploratory techniques】　The electromagnetic exploration system “SQUITEM” using superconductivity is used for identifying boring target points in the field of exploration. In fiscal 2012, we started a validation test with a view to adopting “SQUITEM 3”, which is small-size and light weight, and excels in operability, in the field of exploration.

　　As for remote sensing technology, we successfully developed analysis technology for identifying promising mineralization zones of rare earth deposits, which could not be explored with conventional remote sensing technology, and utilized the technology developed so far for evaluating new projects, and identifying promising mineralization zones.　Further, we successfully developed analysis technology for the identification of promising zones by effectively using next-generation satellite sensor (i.e., hyperspectral sensor) data. Also, in Australia and Chile, we acquired and analyzed airborne hyperspectral data for sophisticated classification of alteration zones and minerals.

【Mining and metallurgytechnology development】　JOGMEC has reached the validation phase in the course of the development of bioleaching technology which is used for extracting copper from low-grade ores. After the procedure for a leaching test was confirmed by a mini-plant test with 4 tons of ore at the Metals Technology Center, we built facilities for testing 200 tons of ore on the premises of a mine in Chile in fiscal 2012, and started tests with a view to putting the technology into practical use.　Also, due to the increasing supply of low-grade ores and fine grained concentrates which may not be easy to handle, it is required that they be used effectively. JOGMEC is attempting to significantly reduce energy consumption in Japan and strengthen Japan's competitiveness in the procurement of mineral resources by developing technology used for stably refining these low-grade, refractory ores, and establishing an

energy-saving refining process. In fiscal 2012, we established granulation technology which enables stable processing even if the fine grained concentrate rate is 100%, as well as technology for immobilizing arsenic contained in flue dust generated through the refining process as chemically stable compounds. Both technologies are in the phase of validation conducted by private companies.　During fiscal 2012, for a research project aimed at recognizing new rare metal resources, we invited companies, universities, etc., to submit proposals, and adopted 11 proposals to implement technology development projects. In addition, we supported 5 technology development projects on rare metal recovery conducted by private companies. We demonstrated that lithium can be extracted from Bolivian salt lake brine by using some methods, emphasizing the excellence of Japanese technologies against people in Bolivia, and established several comprehensive processes for lithium extraction. Further, in Vietnam, we introduced test equipment which enables the extraction and separation of rare earths in the Rare Earth Research and Technology Cooperation Center, and implemented technology transfer by conducting an optimization test of the extraction and separation of rare earths from ores produced in Vietnam.　In Peru, we conducted a survey on residual minerals to check the environmental load and the recoverability of rare metals contained in such residues.

【Metal recycling technology development】　The polishing materials used for fine polishing of glass surfaces such as optical lenses, LCD monitors, etc., are made from rare earths. As Japan is highly dependent on the supply of rare metal from overseas, the industry may suffer serious impact if the supply of such materials is interrupted. For this reason, JOGMEC has been developing recycling technologies in order to encourage the establishment of a system which does not excessively depend on the supply of rare metals from overseas. In fiscal 2012, we successfully built a process for recovering used glass polishing agents as new products by developing some elemental technologies, while the quantities of rare earth contained in glass polishing agents are being reduced.

■ field test of "SQUITEM3"

■ Demonstration plants built in a mine of Chile

Metals Strategy, Exploration, and Technology Development Business OverviewMetals Strategy, Exploration, and Technology Development




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CHAPTER

5 StockpilingJOGMEC is responsible for the safe and efficient operation on petroleum, LP Gas and rare metals stockpiling programs.At ordinary times, JOGMEC maintains the system that enables to operate stockpiles safely and efficiently and in the event of an emergency, JOGMEC would release the reserves expeditiously, thereby JOGMEC has been contributing on stable supply of resources and the smooth management of the national economy.

Overall management on national petroleum stockpiling and support for private-sector stockpiling

　In 1972, Japan started its private-sector petroleum stockpiling program (in accordance with the Oil Stockpiling Act since 1975) and in 1978, national petroleum stockpiling program commenced. As of the end of March 2013, the strategic government reserves consist of 102 days’worth of crude oil and petroleum products stored in 10 national petroleum stockpiling bases and in the tanks leased from the private sectors. Meanwhile private-sector reserves comprise 83 days’ worth of crude oil and petroleum products in their tanks.　In relation to the national stockpiling, JOGMEC has a contract with the government to manage national petroleum stockpiles and stockpiling bases. JOGMEC also conducts surveys, research and development and engages in international cooperation related to stockpiling issues. Furthermore JOGMEC contributes to the reliability of private-sector stockpiling by providing loans for the purchase of crude oil and LP Gas to private sectors that are required to hold compulsory stocks.

Increasing national LP Gas stockpiles to 1.5 million tons

　Japan’s strategic stockpiling of LP Gas has also been implemented through a two-pronged program consisting of national stockpiling and stockpiling by the private sector. As of the end of March 2013 private-sector stockpiles were equivalent to approximately 58.5 days’imports of LP Gas,

compared with the mandatory stockpile of 50 days’imports. Regarding national LP Gas stockpiling, JOGMEC is operating stockpiling bases on commission from the government in order to achieve the target stockpile of 1.5 million tons, which is equivalent to about 40 days’imports. JOGMEC manages and operates national LP Gas stockpiling bases located in Nanao (Ishikawa Prefecture), Fukushima (Nagasaki Prefecture), and Kamisu (Ibaraki Prefecture), which together stably and safely hold LP Gas 19.6 days’imports level worth of stockpiles. Construction of stockpiling bases was completed in Kurashiki (Okayama Prefecture) and Namikata (Ehime Prefecture) in fiscal 2012.

Stockpiling of rare metals essential to industry

　Rare metals are indispensable for manufacturing electronic components and alloy steels, and most of them are deposited in the limited countries. In recent years, One of the key factors of destabilization of the rare metals market, there is a protection policy of mineral resources in the resource-rich countries.　Under these conditions, there has been an increasing focus on the importance of stockpiling rare metals as a short-term countermeasure against supply disruptions, as well as on the importance of emphasizing overseas exploration, promoting recycling, and developing substitute materials as medium to long-term measures to ensure stable supplies. JOGMEC stores and manages rare metals in the national stockpiling warehouse, and releases and purchases as needed.

Oil Stockpiling

National Stockpiling

47.48 million kl

(product equivalent)

Private Stockpiling

38.42 million kl

(product equivalent)

102 days 83 days

as of March 31, 2013 　domestic consumption level

LPG Stockpiling


683 thousand tons

Private Stockpiling

2,036 thousand ton

19.6 days 58.5 days

as of March 2013 imports level

Rare Metals Stockpiling


Target

Private Stockpiling

Target

42 days 18 days



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Response to the Great East Japan Earthquake

　As for the Kuji National Petroleum Stockpiling Base which suffered the disaster of the tsunami in March 2011, JOGMEC has been conducting the recovery works for above ground facilities, and completed acquisition and development of the upland on which important facilities such as additional emergency power generation facilities, etc., will be set up by the end of fiscal 2013. For other petroleum stockpiling bases, JOGMEC has been planning necessary measures against large-scale disasters and set up a roadmap for the implementation which may cause by earthquake and tsunami disasters. To that extend, JOGMEC has been conducting diagnoses of liquefaction and earthquake-resistance of the buildings. For the ground facilities of LP Gas stockpiling bases, JOGMEC has conducted surveys and examinations with the aim of comprehensive safety evaluation safety against earthquakes and tsunamis. In the Namikata and Kurashiki Stockpiling Bases, we have been continuously undertaking examinations with a view to implementing earthquake counter-measure work in fiscal 2013.

Revision of the Oil Stockpiling Act

　Through the experience of the Great East Japan Earthquake in March 2011, it becomes apparent realized that further reinforcement of the delivery system required in response to disasters to ensure petroleum products and LP Gas stably supplied. With this in mind, the Oil Stockpiling Act was revised and enforced in November 2012. The revised law requires petroleum and LP Gas distributors of a certain size or greater were obligated to draw up and submit “Oil supply cooperation plans for disaster responses” and “LP Gas supply cooperation plans for disaster responses”. Those plans are locally drawn up for securing the petroleum products and LP Gas supply system at the time of a disaster in connection with the establishment of a local joint work system, the sharing of facilities and transport activities. Thus, when a disaster occurs, petroleum products and LP Gas have to be supplied in a cooperative manner as planned. JOGMEC is ready to offer human and technical support as requested by petroleum and LP Gas distributors in accordance with the cooperative petroleum products and LP Gas supply plans.

Safe and efficient operation on national petroleum and LP Gas stockpiles

　There are 15 national petroleum and LP Gas stockpiling bases across the nat ion, and these are in place for emergencies. We JOGMEC has been working to improve safety and efficiency through the activities on cost reduction as well as safely storing petroleum and LP Gas that are called hazardous, substance.　

【Safe management on petroleum and LP Gas stockpiles】　To ensure a safe stockpiling bases’ operation, JOGMEC has been conducting disaster control trainings and safety inspections in cooperation with relevant local agencies, etc. Listed below are major exercises implemented in fiscal 2012.

・A safety evaluation by the head of representative office of JOGMEC in each base: The evaluation has aims of identifying the knowledge, techniques and operating performance of currently owned by each bases (10 petroleum stockpiling bases and 3 LP Gas stockpiling bases) in service, and upgrades safety activities and takes corrective measures, if necessary.　JOGMEC also enhanced its techniques and awareness for the safe operation of the bases by conducting comprehensive petrochemical complex disaster prevention drills (in 5 petroleum stockpiling bases and 2 LP Gas stockpiling bases), spilled oil removal drills (in 8 petroleum stockpiling bases), and practical large-capacity air foam system operation drills (in 6 petroleum stockpiling bases), etc. And the tsunami evacuation drills (in 9 petroleum stockpiling bases and 2 LP Gas bases which are expected to suffer a tsunami disaster in future).・JOGMEC gathered information on the floating roof tank accident, which occurred in Okinawa, and apply it to confirm the safety by inspecting similar tanks in a national stockpiling base.

【Increasing efficiency of the management of national petroleum stockpiles】　In order to further increase the efficiency on the management of stockpiling bases, efficiency improvement plans formulated by operating companies themselves are being continuously implemented. The plans include the introduction of competitive bidding system, rationalization of construction work, cost reduction through energy conservation and improvement of operational efficiency utilizing computer systems. Listed below are major achievements in fiscal 2012.・The cost reduction ratio achieved by 21.33%(in comparison with the 1st-term medium target period during the 2nd-term medium target period (fiscal 2008 to fiscal 2012) . The target was “more than 15.36%” significantly exceeded the target(except the cost spent for the recovery works of the Kuji National Petroleum Base).・Related to the works conducted by the operation service companies, the number of competitive bidding cases increased to 276(Fiscal 2012) from 182 (Fiscal 2011). JOGMEC continuously promoted a series of measures such as revision of maintenance work frequency, etc., to reduction of the costs.・In Kamigoto Base, we implemented storage barge overall inspection work which is a large-scale special operation conducted every 5 years to contribute to the safe running of the e barges, and the works has successfully reduced cost by approx. 500 million yen in comparison with the previous occasion

■Comprehensive petrochemical complex exercises


Stockpiling


(in 2007) by reducing the total work period, etc. (The total cost of barge overall inspection work is approx. 4.8 billion yen).

Enhancing emergency response capabilities

　In petroleum and LP Gas stockpiling bases, JOGMEC conducted emergency release practical drills or alternative drills. Also, we used the inter-base oil transfer which work, etc., were useful for on-the-job training (OJT) in case of emergency release. Listed below are major achievements in fiscal 2012.・As contracted by the government, JOGMEC conducted to make stockpile of 130,000 kiloliter of kerosene. Also, JOGMEC changes the types of stockpiles oil. By this transaction the composition ratio among heavy to light oil of state-owned crude oil are slightly closer to the component distribution ratio of the imported in recent years.・JOGMEC has been continuously lending storage tanks to the major crude oil-supply countries. The is lending tanks locate in the Okinawa CTS are utilizing by Saudi Arabia (ARAMCO), which Japan is importing the large portion (approx. 30%) of crude oil and supporting the some kind of for lending tanks located in the Kiire base owned by JX for the UAE (ADNOC), where Japan is importing the second largest portion (approx. 25%) of crude oil. Thus, we are contributing on the enhancement of energy security by ensuring that crude oil is preferentially exported to Japan even in emergency cases, as well as the strengthening of relationships with oil-producing countries.・We experienced a simulated supply disruption exercise, and had discussions to foster a better understanding of the IEA’s emergency response measures and the risks faced by the global energy market through the Emergency Response Exercise 6 (ERE6) provided by the IEA. (November, France)

International cooperation in petroleum stockpiling

　In case of an emergency, it is important to cooperate with neighboring countries in order to ensure that energy is supplied steadily. Therefore, JOGMEC is building cooperative relationships with foreign countries such as Asian countries and the US by proactively exchanging information concerning strategic petroleum reserve with them. The achievements we made during fiscal 2012 are as shown below.・JOGMEC has proactively cooperated and supported the holding of the workshop for developing and reinforcing the petroleum stockpiling system in ASEAN countries, and accepted the personnel from petroleum stockpiling departments of the governments and national oil companies in ASEAN countries to the national petroleum stockpiling bases in Japan.・JOGMEC visited the headquarters of Korea National Oil Corporation, while their representatives were visiting national petroleum stockpiling bases in Japan.・JOGMEC held the Technical Meeting with the Strategic Petroleum Reserve Office, US Department of Energy, which is the largest strategic petroleum reserve holder in the world to confer about technological matters etc.・JOGMEC contributed to the construction of a system for relationships and cooperation with foreign countries by proactively accepting a total of 94 visitors to the petroleum stockpiling bases from the US, South Korea, ASEAN countries, and OPEC countries, etc.

Providing financial support for petroleum and LP Gas stockpiling by private companies

　As for loans for private stockpiling conducted by petroleum joint stockpil ing companies, JOGMEC ensured that an appropriate and smooth review would be undertaken, and swiftly provided loans necessary for the updating of the facilities. Moreover, JOGMEC carried out the largest-scale fund procurement (approx. 717.8 billion yen) for domestic syndicate loans for fiscal 2012 by interest rate competitive bidding. Thus, JOGMEC provided low-interest loans.

Construction of underground LP Gas stockpiling bases

　As for LP Gas stockpiling bases, highly accurate airtightness and water seal properties were confirmed in both the Kurashiki National LP Gas Stockpiling Base ( located in Okayama Prefecture) and Namikata National LP Gas Stockpiling Base (located in Ehime Prefecture), which adopted the “water seal underground rock cavern tank system” for the first time in Japan, by conducting an airtightness test for the rock cavern tank, which was attended by representatives of the relevant government agencies. The construction of both bases was completed by the end of fiscal 2012 after a comprehensive trial run was undertaken. Thus, as the construction of the Kurashiki and Namikata Stockpiling Bases is complete, the national system stockpiling 1.5 million tons of LP Gas can now respond to the possibility of disruption of LP Gas supply to Japan and shortage in LP Gas because of a disaster along with 3 bases on the ground, which were constructed in fiscal 2005. Both bases started their operation by using LP Gas of 48 thousand tons, which was fed for the purpose of conducting the trial run. The gas-in process is going to be started in a step-by-step manner.

Promoting the stockpiling of rare metal

　To agilely store and release the storage of rare metals, JOGMEC conducted as many as 60 domestic and international companies involved in rare metal businesses, and gathered and analyzed the information. Consequently, we further stockpiled rare metal as necessary. Also, for the establishment of a flexible rare metals stockpile system, JOGMEC set up a new committee, in cooperation with user companies, for periodic monitoring of domestic inventories and the latest supply and demand trends on necessary rare metals. Further, JOGMEC constituted the registration system for rare metals producers and user companies that enable us to purchase rare metals agilely.

■Kurashiki National LP 　Gas storage cavern tank

■Kurashiki National LP　Gas Stockpiling Base 　　(Built in March 2013)

Business Overview




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CHAPTER

6 Mine Pollution ControlJOGMEC provides technical and financial support to ensure that localgovernments and private companies are able to implement appropriate mine pollution control measures.

Technical support to ensure the implementation of mine pollution control measures

　JOGMEC is engaged in activities to provide technical support to local governments and entities that are obligated to implement mine pollution control measures (referred to as “mine pollution controlling entities,” below).　At the request of mine pollution controll ing entit ies, JOGMEC offers consulting and provides information related to construction work for mine pollution control and the formulation of mine pollution control policy. JOGMEC also provides technical assistance related to designing construction work for mine pollution control on commission from mine pollution controlling entities, and has undertaken the operation and management of a new neutralization plant at the abandoned Matsuo mine (Iwate Prefecture).　Additionally, JOGMEC collects and organizes data on abandoned mines, offers technical guidance and training courses, and provides support for mine control measures taken by the government, in order to increase the efficiency of mine pollution control in Japan. To reduce the cost of mine pollution control measures, JOGMEC conducts surveys on technologies related to effective measures against sources of mine pollution and mine drainage treatment, and develops such technologies in light of the needs of relevant parties.

Financial assistance to ensure the implementation of mine pollution control

　JOGMEC provides loans to private companies implementing mine pollution control projects, and also manages reserve funds set aside by private companies for construction work for mine pollution control and funds set aside for continuing drainage treatment.

Technical support for governments of resource-rich developing countries

　Japan has world-leading technologies and systems for mine pollution control which have been developed through many years of efforts to control mine pollution. JOGMEC contributes to the promotion of environment-friendly mine development by sharing information and knowhow related to mine pollution control to resource-rich countries.

Project flow of support for Mine Pollution Control

Government

JOGMEC

Municipal Governments (1/4)

Abandoned Mines

without owners

Operating mines Suspended or Abandoned Mines

with owners

Technical & Intelligence Support

Deposits

FundsFinancial ＆TechnicalSupport

Implementation of Mine Pollution Control

Subsidies (3/4)

Technical Support

Grants for Administrative Services Subsidies Interest Subsidy



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Technical support for Mine Pollution Control

【Technical support for mine pollution controlling entities】　In Japan, drainage treatment is said to be necessary at 80 abandoned mines. Primarily, entities which have exploitation rights have the obligation to implement mine pollution control programs in accordance with polluter pays principle . However, local governments implement such programs at abandoned mines when there is no business operator with the obligation to do so. The central government provides subsidies to local governments, while JOGMEC extends technical support. Listed below are major activities conducted in fiscal 2012.- At the mine site in Aomori Prefecture, a large volume of slime flowed out of the tailing dam (bottom culvert and untreated mine water containing dissolved metals was accidentally discharged into public water areas. According to the request for survey guidance from the prefectural government, JOGMEC conducted the field survey and analysis for the change of underground water level. And proposal for countermeasures and the results of accident analysis were suggested.・According to the request from Takachiho-cho, Miyazaki P re fec tu re , JOGMEC deve loped a de ta i l ed des ign for reinforcement of mine gal lery in order to prevent uncontaminated water from mixing with contaminated one and to improve mine water quality.・According to the requests from the prefectural governments, such as Yamagata Prefecture, at a total of nine abandoned mine sites, JOGMEC provided technical consulting, such as advice for construction work of mine pollution control and water quantity and quality survey in the water system around the mine site in order to check the influence on mine water quantity and quality.　

【Developing mine pollution control technologies】　Drainage treatment, which must be continued at abandoned mines on a semi-permanent basis, imposes a considerable burden on entities obligated to implement mine control pollution programs and local governments. In order to take more effective and efficient mine pollution control measures, JOGMEC is developing passive treatment technology and a technology to remove heavy metals. Listed below are major achievements in fiscal 2012.- JOGMEC conducted water quantity and quality surveys in the river system at 19 abandoned mine sites where passive treatment technology may be applied in order to identify the background of water quantity and quality in the surrounding areas of these mine sites. Based on these survey results, JOGMEC estimated the water quality in the downstream rivers (at water intake points, environmental monitoring points, etc.), and found that passive treatment technology was highly applicable to the water treatment facilities at eight mine sites. Furthermore, JOGMEC also estimated water quality changes at one mine site in detail with simulation software and embarked on the development of a method for quantitative evaluation on the applicability of passive treatment technology to each water treatment facility.- By conducting a validation test with a model mine (Scale:

approx. 1/20), JOGMEC confirmed the long-term stability of metal removal effect achieved by the JOGMEC’s process of passive treatment (i.e., a method for mine water treatment based on the reaction of sulfate reducing bacteria using rice husks as organic carbon source for bacteria).・JOGMEC started to develop mine cavity backfilling technology utilizing cost-effective materials for volume reduction and quality improvement of mine water, cost reduction of sludge disposal, stabilization of mine cavity. In this fiscal year, JOGMEC developed blending method for producing filling materials which has an expected basic performance, as well as survey method for accurately identifying the positions of mine cavity, and organized information on legal restrictions for backfilling and cavity of abandoned mines.

【Training and developing of human resources for Mine Pollution Control】　To secure the human resources necessary for taking mine pollution control measures, JOGMEC provides training sessions for personnel at private companies who work in mine pollution control programs. In addition, in order to ensure understanding of the importance of both resource development and environmental protection, JOGMEC organizes eco-tours for high-school students of schools near drainage treatment facilities. Listed below are major activities conducted in fiscal 2012:・With a view to revision of the “Technical principles on tailing dam” based on the experience in the Great East Japan Earthquake, JOGMEC held the meetings for exchanges of information on mine pollution status and environment in August and November. And JOGMEC provided information on stable analysis method for tailing dam and 5th national basic policies to be drawn up, etc., for 148 attendees from local governments and organizations involved in mining pollution control work.・In response to the shortage and aging of personnel involved in mine water treatment management, which are regarded as problems in this field, JOGMEC held basic technology training courses in November and February in order to encourage 25 engineers to acquire basic knowledge on mine water treatment in cooperation with the Japan Mining Industry Association. - JOGMEC produced learning videos about mine pollution control technologies (i.e., water quantity and quality survey), to plainly describe the procedures for water quantity and quality survey which is essential for planning countermeasures against mining pollution.- JOGMEC held eco- tour twice for the students of schools located near large-scale mine water treatment facilities and abandoned mines, etc., and provided lectures on the importance of resource development and environmental preservation. Furthermore, JOGMEC accepted visitors to the new neutralization plant at the abandoned Matsuo mine in Iwate Prefecture, including officials of administrative organizations, students, common residents , etc., from within and outside the prefecture, in order to promote an understanding for mine pollution control activities. (166 officials from administrative organizations, 187 university students, 233 students from elementary, junior high and high schools, 432 residents those who live around the mine site)


Mine Pollution Control


【Operating and managing the New Neutralization Plant at the Abandoned Matsuo Mine】　For the 30 years since 1982, JOGMEC has managed and operated the new neutralization plant at the abandoned Matsuo mine, which discharges the largest amount of treated drain water among treatment facilities for abandoned mines, on commission by the Iwate prefectural government. Over 30 years, JOGMEC has contributed to water quality improvement of Kitakami River and made sure to keep the quality of treated water, which volume is 9 million m3 per year in accordance with the standard. These efforts were recognized by the prefectural government and JOGMEC received a letter of appreciation from the governor. Following the previous fiscal year,. In addition, on July 16, a disaster prevention drill was conducted on assumption that a great earthquake occurs with a seismic

in tens i ty o f h igher 6, based on the Great East Japan Earthquake. In the drill, procedures of calcium carbonate addition into the treatment water using bulk carriers was inspected.

Providing financial assistance for Japanese companies’ mine pollution control work

【Providing loans for mine pollution control】　　JOGMEC provides stable financial support for mine pollution control. In fiscal 2012, JOGMEC provided a total of 100 million yen in loans to two private companies for mine pollution control work and drainage treatment at two mines. In addition, JOGMEC lent 60 million yen to one company to support the implementation of soil pollution control measures on agricultural land.

【Managing mine pollution control reserve funds and project funds】　JOGMEC contributes to ensuring the implementation of sustainable mine pollution control projects by appropriately managing reserve funds*1 and project funds*2 accepted from private companies that undertake mine pollution control based on the Act on Special Measures for Pollution Caused by the Metal Mining Industry, etc.*1 A system of setting aside reserve funds to ensure that construction work for mine pollution control is implemented for mining facilities that have been shut down.

*2 A system in which private mining companies that implement mine drainage treatment contribute money to an investment fund and the investment gains are used to cover the cost of the treatment.　Reserve funds accumulated by the end of fiscal 2012 amounted to a total 5.3 billion yen for 98 mines. In part of this amount, 3.5 billion yen had already been withdrawn to implement mine pollution control measures, bringing the outstanding balance down to 1.8 billion yen. Regarding projects funds, 22 mines completed fund contribution by the end of fiscal 2012, with the outstanding balance totaling 5.1 billion yen.

Technical support for the governments of mineral resource-rich countries

　JOGMEC provides technical support for resource-rich countries by taking advantage of its experience in mine pollution control. It contributes to environmental protection in resource-rich countries by holding seminars, dispatching personnel, and providing training, and has been building friendly relationships with such countries. Listed below are major activities conducted in fiscal 2012.・By sending a mining pol lut ion pol icy advisor to the Ministry of Energy and Mines of Peru, submitted a report suggesting countermeasures for mine sites where preferential implementation of mine pollution control works had been requested.・Transferred technologies including field surveys method (i.e., water quality measurement, position and size measurement, recording, etc.), and analysis and evaluation method on the data obtained from survey results to eleven staffs of the Ministry of Energy and Mines of Peru(October).・Invited three officials from the Ministry of Energy and Mines of Peru and three officials from General Department of Mineral Resources, the Ministry of Industry Mines and Energy of Cambodia respectively, and provided field training.・Held seminars aimed at officials of governmental organizations and mining companies in Vietnam (August), Laos (September), Myanmar (October), South Africa (February) and Peru (February). Especially, in South Africa, JOGMEC held the first multinational conference ( the representatives attended from South Africa, Botswana, Zimbabwe, Tanzania, Mozambique, Namibia and Zambia) and contributed to the devising of cooperation subjects discussed in the “Japan-Africa Ministerial Meeting for Resources Development” held in May 2013.

■Disaster prevention drill

■On the Job Training for MEM staffs of Peru.

■Eco-tour ■Site visit for the water treatment facility.

Business Overview




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Approval, Audit, and Disclosure of Financial Statements

　The management of JOGMEC is carried out in accordance with the Act on General Rules for Incorporated Administrative Agency( “ General Rules”), enacted in 1999, and the Japan Oil, Gas and Metals National Corporation Act (“Specific Act”), enacted in 2002.　JOGMEC’s accounts are settled in accordance with the requirements of the General Rules. Accounts are settled for each fiscal year and JOGMEC’s financial statements are submitted to the Minister of Economy, Trade and Industry by June 30, after being audited by internal and independent auditors. The financial statements are then scrutinized by the Evaluation Committee for Incorporated Administrative Agencies within the Ministry of Economy, Trade and Industry (METI). Based on the advice of this committee, the METI minister approves JOGMEC’s financial statements.　JOGMEC’s financial statements are disclosed promptly after approval. Methods of disclosure include the JOGMEC corporate website and official gazettes, as well as a disclosure room set up within JOGMEC to allow members of the public to view the statements.

Capital Structure

　For JOGMEC, funds equivalent to the accounting term “capital” for private-sector companies are provided by the Japanese government. These national government investments, which constitute JOGMEC’s financial base and were provided to the amount of 92.2 billion yen at the time of JOGMEC’s establishment, are supplied in an expeditious manner based on the corporation’s requirements for each business, as detailed in the medium-term management plan, and amounted to 503.0 billion yen at the end of fiscal 2012.　In addition to national government investment, which was 94.1 billion yen in fiscal 2012, JOGMEC procures funds from a number of external sources, including revenues from grants for administrative services (18.6 billion yen), subsidies (5.8 billion yen), revenues from entrusted activities (155.1 billion yen), and loans from financial institutions (765.3 billion yen). Methods of fund procurement are determined by how JOGMEC plans to usethe funds.

Earnings Structure

　The operation of JOGMEC is basically dictated by the amount of grants for administrative services that is received from the government to cover operating expenses, which were 18.6 billion yen in fiscal 2012. JOGMEC adopts cost-based income realization criteria. Therefore, grants for administrative services are first regarded as liabilities, and then turned into revenues with expenditure limits along with the progress of projects. Revenues from other grants received are paid by subvention to support private companies. These grants represent the amount


General Overview

Financial Review

JOGMEC receives for providing support on behalf of the government for a portion of state-sponsored surveys and development projects (through subvention or other financial aid) in the specific sector that private companies handle. Revenues from entrusted activities represent the amount paid by the government to cover the cost of other specific activities (management of national petroleum stockpiles, domestic geological surveys of oil and gas, etc.) requested by the state.　In fiscal 2012, JOGMEC posted a current gross loss of 1.7 billion yen. The main factor in this loss was the fact that JOGMEC posted 17.5 billion yen in losses on write-offs of investment in subsidiaries for the current fiscal year which are related to investment in oil and natural gas exploration projects. This amount substantially exceeded earnings such as the dividend income and guarantee fee income received. Half of the investment balance is assessed as the fair value based on JOGMEC’s bylaws and in accordance with the practical guidelines for financial instrument accounting standards established by the Japanese Institute of Certified Public Accountants. This is because it is difficult to objectively judge the collectability of stock for investment in the exploratory stage, and because the Accounting Standards for Incorporated Administrative Agency are not applicable to such a case. In general, extended periods are required for oil exploration development projects, making it difficult to assess their success. Therefore, JOGMEC follows accounting procedures that reflect the characteristics of the projects, by conservatively evaluating the investments in companies prospecting for resources.

Finance and Liability Guarantees

　JOGMEC, together with private-sector companies, provides equity finance for operations related to oil and gas E&P, natural gas liquefaction, and other activities. It also grants liability guarantees for these same activities.　In fiscal 2012, JOGMEC provided a total of 86.0 billion yen in equity capital to 25 companies including one new exploration project and two new asset acquisition projects. Equity finance is recorded as investment in stocks of affiliates and investment securities (outstanding balance of 172.7 billion yen at of the end of fiscal 2012) in the fixed investment column. Currently, none of these subsidiaries and affiliates is publically listed.　JOGMEC provided a liability guarantee for 13 companies including four new projects (outstanding balance of 525.4 billion at the end of fiscal 2012).　In oil and LPG stockpiling-related activities, JOGMEC invested 19.5 billion yen at the end of fiscal 2012 in joint-venture stockpiling firms that will be operated jointly by oil companies to construct and manage stockpiling bases. JOGMEC also provides funds required for the construction of joint stockpiling sites, amounting to 0.9 billion yen at the end of fiscal 2012. In addition, the corporation supplies financing to private-sector companies, which are required to meet certain stockpiling obligations by law, to help them purchase the necessary petroleum and LPG for stockpiling. The amount of these

finances was 717.8 billion yen at the end of fiscal 2012. The resources for these loans were raised by syndicated loans from private financial institutions, booked as loans payable for funding private-sector stockpiling activities, and amounted to 717.8 billion yen at the end of fiscal 2012.　Regarding development of metal resources, JOGMEC provides equity capital for exploration and asset acquisition as well as loans and liability guarantees as the risk money financing necessary for overseas exploration projects. In addition to providing equity capital, including asset acquisition, to five companies (outstanding balance of 41 .0billion yen at the end of fiscal 2012), we also provided loans totaling 2.4 billion yen to four companies for domestic and overseas exploration projects (outstanding balance of 25.7 billion yen at the end of fiscal 2012). In addition, JOGMEC provided a liability guarantee for nine companies including three new projects (outstanding balance of 88.9 billion yen at the end of fiscal 2012). JOGMEC also provide loans for mine pollution control (outstanding balance of 3.1 billion yen at the end of fiscal 2012).

Stockpiling

　JOGMEC is responsible for operating petroleum and LPG stockpiling bases. Certain equipment and materials associated with these sites are owned by JOGMEC and recorded on its financial statements under assets as part of machinery and equipment, etc. This fiscal year, JOGMEC is going to hand over both the national underground stockpiling bases in Kurashiki and Namikata which were constructed as commissioned. Therefore, we transferred the base construction cost, which had been included in the assets as incomplete construction expenses, to commissioned expenses and the amount equal to the expenses for construction of the bases, which had been received from the government during the construction period and included in debts as the incomplete construction amount received from the commissioned incomes, respectively.　JOGMEC also stockpiles rare metals. These rare metals and mineral stockpiles, which were included in the assets (37.1 billion yen at the end of fiscal 2012).

StockpilingMine Pollution Control

　As part of its mine pollution control activities, JOGMEC is responsible for managing two funds for mining rights holders.　One is the Reserve for Mine Pollution Control, which was created to meet mine remediation costs after mine closure. Interest earned on funds paid into the reserves by mining rights holders is returned when costs are incurred for remediation work.　The other is the Mine Pollution Control Fund. Income from the management of this fund is exclusively used to maintain mine drainage treatment facilities at abandoned mine sites. Expenses incurred for this work are recorded as mine pollution control costs, and these were 0.07 billion yen in fiscal 2012.




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(Yen) (U.S. dollars)

(Note 1)

Assets

　I Current assets

　　　　Cash on hand and in banks 112,428,228,055 1,195,917,754

　　　　Marketable securities 36,601,055,719 389,331,515

　　　　Trade accounts receivable 13,677,960,907 145,494,744

　　　　Inventories 11,476,484,137 122,077,270

　　　　Prepaid expenses 928,441 9,876

　　　　Accrued income 556,742,823 5,922,166

　　　　Consumption taxes receivable 56,649,204 602,587

　　　　Short-term loans receivable 4,223,202,000 44,922,902

　　　　Loans receivable for subsidiaries and affiliates 102,666,000 1,092,075

　　　　Loans receivable for funding private-sector stockpiling activities 717,830,600,000 7,635,683,438

　　　　Accounts receivable 4,577,357,507 48,690,113

　　　　Advances　　　　 982,095 10,447

Total current assets 901,532,856,888 9,589,754,887

II Fixed assets

1. Tangible fixed assets

Buildings 7,449,761,718 79,244,354

Less : accumulated depreciation (1,819,036,357) (19,349,392)

Structures 401,411,910 4,269,885

Less : accumulated depreciation (246,374,592) (2,620,727)

Machinery and equipment 11,600,394,777 123,395,328


Vessels 19,312,310,249 205,428,255


Vehicles 554,028,214 5,893,290

Less : accumulated depreciation (516,858,849) (5,497,914)

Tools, furniture and fixtures 3,625,451,998 38,564,536


Land 3,370,730,362 35,855,019

Rare metals 37,064,244,028 394,258,526

Tangible fixed assets, net 73,579,173,183 782,673,898

2. Intangible fixed assets

Patents 690,870,740 7,348,907

Software 43,861,850 466,566

Telephone rights 3,477,000 36,985

Mining right in progress 94,728,400 1,007,642

Total intangible fixed assets 832,937,990 8,860,100

3. Investments and other assets

Long-term deposit 30,555,139,347 325,020,097

Investments in securities 56,520,754,135 601,220,659

Investments in subsidiaries and affiliates 231,769,316,942 2,465,368,758

Long-term loans receivable 24,578,458,000 261,445,144

Long-term loans receivable from subsidiaries and affiliates 802,660,000 8,538,028

Security deposits 25,311,340 269,241

Total investments and other assets 344,251,639,764 3,661,861,927

Total fixed assets 418,663,750,937 4,453,395,925

Total assets ¥1,320,196,607,825 $14,043,150,812


Balance Sheet (March 31,2013)

(Yen) (U.S. dollars)

(Note 1)

Liabilities and net assets

Liabilities

　I Current liabilities

Grants received in advance 625,600,852 6,654,620

Current portion of long-term borrowings 53,704,895,536 571,267,903

Loans payable for funding private-sector stockpiling activities 717,830,600,000 7,635,683,438

Trade accounts payable 5,886,691,890 62,617,720

Accounts payable-other 10,389,721,971 110,517,200

Accrued expenses 394,824,987 4,199,819

Advances received 10,095,004,000 107,382,236

Deposits received 52,949,881 563,237

Allowance

Accrued bonuses 4,408,356 46,892

Total current liabilities 798,984,697,473 8,498,933,065

　II Long-term liabilities

Contra accounts for services and assets

Contra account for assets funded by grants for administrative services 5,232,842,176 55,662,612

Contra account for assets purchased with other grants 736,071,389 7,829,714

Long-term borrowings 3,336,709,000 35,493,128

Allowances

Allowance for retirement benefits 186,138,465 1,979,986

Long-term accounts payable 473,061,209 5,032,031

Reserve for prevention of mine pollution 1,838,673,000 19,558,270

Total long-term liabilities 11,803,495,239 125,555,741

Total liabilities 810,788,192,712 8,624,488,807

Net Assets

　I Capital

National government investments 502,993,422,895 5,350,424,666

Total capital 502,993,422,895 5,350,424,666

　II Capital surplus

Capital surplus 30,329,400,401 322,618,875

Accumulated depreciation charged to capital surplus (6,616,689,204) (70,382,823)

Accumulated impairment loss charged to capital surplus (2,388,000) (25,402)

Fund for prevention of mine pollution 5,117,410,831 54,434,750

Total capital surplus 28,827,734,028 306,645,400

　III Accumulated deficits

Accumulated reserve carried over from first mid-term target period (8,470,176,755) (90,098,678)

Accumulated reserve (404,847,404) (4,306,429)

Undisposed accumulated deficits (31,414,639,992) (334,162,749)

（Total loss for the year ￥1,718,537,300)

Total accumlated deficits (22,539,615,833) (239,757,641)

　IV Unrealized holding loss on securities 126,874,023 1,349,580

　Total net assets 509,408,415,113 5,418,662,005

　Total liabilities and net assets ¥1,320,196,607,825 $14,043,150,812




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(Yen) (U.S. dollars)(Note 1)

Ordinary expenses　　　Operating expenses:　　　　Operating expenses 30,354,601,647 322,886,944 　　　　Operating and administrative expenses 4,982,308,252 52,997,641 　　　　Depreciation 760,896,852 8,093,786 　　　　Accrual for bonuses　　　　 3,724,998 39,623 　　　　Loss on write-offs of investments in subsidiaries and affiliates 17,536,406,603 186,537,673 　　　　Loss on liquidation of affiliates 16,860,517 179,348 　　　Expenses for entrusted activities 425,088,230,582 4,521,734,183 　　　General and administrative expenses:　　　　Payroll expenses 996,077,022 10,595,437 　　　　Depreciation 22,985,690 244,503 　　　　Accrual for bonuses 683,358 7,269 　　　　Administrative expenses　　　　 346,536,452 3,686,166 　　　Finance costs:　　　　Interest expense 993,991,379 10,573,252 　　　　Other finance cost 91,092,937 968,971 　　　Interest on reserve for prevention of mine pollution 18,326,639 194,944 　　　Operating expenses relating to mine pollution prevention activities 68,473,831 728,368 　　　Miscellaneous losses 2,982,412,038 31,724,413 Total ordinary expenses 484,263,608,797 5,151,192,520

Ordinary revenues　　　Revenue from grants for administrative services 29,105,473,249 309,599,758 　　　Operating revenues:　　　　Interest on loans receivable 1,294,670,386 13,771,624 　　　　Guarantee fee income received 3,406,488,872 36,235,388 　　　　Dividends received　　　　 2,125,566,520 22,610,004 　　　Revenues from other grants received:　　　　State subsidies 5,518,796,101 58,704,352 　　　　Compensation received 132,842,835 1,413,071 　　　 Revenues from entrusted activities:　　　　Revenue from activities entrusted by national government 423,641,228,571 4,506,342,182 　　　　Revenue from activities entrusted by local governments 461,146,670 4,905,294 　　　　Revenue from activities entrusted by others 117,618,442 1,251,127 　　　 Financial revenues:　　　　Interest income 287,629,133 3,059,559 　　　　Interest income on securities 427,451,799 4,546,876 　　　 Reversal of contra account for assets funded by grants for administrative services 422,654,485 4,495,846 　　　 Reversal of contra account for assets purchased with other grants 209,176,425 2,225,044 　　　 Miscellaneous income 6,881,453,221 73,199,162 Total ordinary revenues 473,632,196,709 5,038,104,422

Ordinary loss 10,631,412,088 113,088,098

Extraordinary loss　　　Loss on sales of fixed assets 8,385,626 89,199 　　　Loss on disposal of fixed assets 58,002,291 616,980 　　　Loss on contribution 31,428,141 334,306 Total extraordinary loss 97,816,058 1,040,486

Extraordinary income　　　Gain on sales of fixed assets 11,001,179 117,021 　　　Reversal of contra account for assets funded by grants for administrative services 86,690,804 922,144 　　　Reversal of contra account for assets purchased with grants 4,365,682 46,438 Total extraordinary income 102,057,665 1,085,604

Net loss for the year 10,627,170,481 113,042,979 Withdrawal of accumulated reserve carried over from previous mid-term target period 8,908,633,181 94,762,612 Total loss for the year ¥1,718,537,300 $18,280,367


Financial ReviewStatement of Operations (For the year ended March 31, 2013)

(Yen) (U.S. dollars)(Note 1)

I Cash flows from operating activities

Payments for raw materials, goods and services purchased (185,170,368,499) (1,969,687,996)

Payroll expenses (3,976,009,908) (42,293,478)

Loans receivable made (720,502,600,000) (7,664,105,946)

Expenses related to mine pollution prevention activities (76,599,863) (814,805)

Purchases of investments (85,962,867,865) (914,401,318)

Consumption tax paid (514,899,671) (5,477,073)

Other operating expenses paid (2,335,562,186) (24,843,763)

Guarantee fees received 2,749,045,386 29,242,053

Reserve for prevention of mine pollution received 15,209,000 161,781

Grants received for administrative services 18,578,424,000 197,621,785

Revenues received from entrusted activities 148,411,001,094 1,578,672,493

Other grants received 4,829,740,677 51,374,755

Collection of loans receivable 563,407,509,000 5,993,059,345

Proceeds from liquidation of affiliates 12,139,483 129,130

Consumption taxes refunded 145,387,050 1,546,506

Other operating revenues received 7,750,275,127 82,440,965

Subtotal (252,640,177,175) (2,687,375,568)

Interest and dividends received 4,812,605,704 51,192,487

Interest paid (1,053,309,441) (11,204,228)

Cash flows from operating activities (248,880,880,912) (2,647,387,309)

II Cash flows from investing activities

Purchases of time deposits (403,102,227,211) (4,287,865,410)

Proceeds from time deposits upon maturity 399,873,839,156 4,253,524,510

Purchases of securities (52,566,457,749) (559,158,151)

Proceeds from securities upon maturity 45,558,844,000 484,616,998

Purchases of tangible fixed assets (4,130,446,012) (43,936,241)

Proceeds from sales of tangible fixed assets 35,588,036 378,556

Purchases of intangible fixed assets (281,216,850) (2,991,350)

Grants received for facility improvement 102,109,653 1,086,157

Payments for execution of assets retirement obligations (312,000,000) (3,318,796)

Cash flows from investing activities (14,821,966,977) (157,663,727)

III Cash flows from financing activities

Proceeds from short-term borrowings 612,000,000 6,509,946

Repayments of short-term borrowings (612,000,000) (6,509,946)

Proceeds from long-term borrowings 47,453,350,536 504,769,179

Repayments of long-term borrowings (43,994,237,694) (467,974,021)

Proceeds from loans payable for funding private-sector stockpiling activities 717,830,600,000 7,635,683,438

Repayments of loans payable for funding private-sector stockpiling activities (555,746,800,000) (5,911,571,109)

Proceeds from national government investments 94,144,000,000 1,001,425,380

Payments for transferring of unnecessary propaerties to government (93,765,698) (997,401)

Repayments of lease obligations (167,082,209) (1,777,281)

Cash flows from financing activities 259,426,064,935 2,759,558,185

IV Effect of exchange rate changes on cash and cash equivalents 4,068,087 43,273

V Net decrease in cash and cash equivalents (4,272,714,867) (45,449,578)

VI Cash and cash equivalents at beginning of year 9,098,529,892 96,782,575

VII Cash and cash equivalents at end of year ¥4,825,815,025 $51,332,997




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Financial ReviewStatement of Cash Flows (For the year ended March 31, 2013)

Ⅰ.Significant Accounting Policies　JOGMEC adopted the “Accounting Standards for Incorporated Administrative Agency” (“Revision of Accounting Standards for Incorporated Administrative Agency”[Study Group of Accounting Standards for Incorporated Administrative Agency and Working Subcommittee of Legal and Public Accounting Systems, Fiscal System Subcommittee, Fiscal System Council, June 28, 2011]), and the “Q&A on Accounting Standards for Incorporated Administrative Agency and Notes to Accounting Standards for Incorporated Administrative Agency” (Administrative Management Bureau of the Ministry of Internal Affairs and Communications, Budget Bureau of the Ministry of Finance, and Japanese Institute of Certified Public Accountants, finally revised in March 2012).1.Basis of Preparation　The accompanying financial statements of Incorporated Administrative Agency Japan Oil, Gas and Metals National Corporation (“JOGMEC ”) consisting of the balance sheet, and the statement of operations and cash flows have been prepared in accordance with “Accounting Standards for Incorporated Administrative Agency” and accounting principles generally accepted in Japan. These are a portion of the financial statements prepared by JOGMEC as required by Article 38 of “Act on General Rules for Incorporated Administrative Agency.”　The translation of yen amounts into U.S. dollar amounts is included solely for convenience, as a matter of arithmetic computation only, at ¥94.01 =US$1.00, the exchange rate prevailing on March 31, 2013. This translation should not be construed as a representation that yen have been, could have been, or could in the future be, converted into U.S. dollars at the above or any other rate.2.Revenues from Grants for Administrative Services　Revenues from grants for administrative services are recognized as the related expenses are incurred.　This is because the relationship between the revenues from grants for administrative services and each project is not clear, or the revenues from grants for administrative services do not relate to the passage of time, which makes it difficult to adopt the completed-contract method or the percentage-of-completion method.　In addition, grants for administrative services in the previous fiscal year are considered to be recognized first. 　This is because the budget of grants for administrative services in the previous fiscal year and in the current fiscal year is allocated on a combined basis.3.Depreciation(1)Tangible fixed assets　Depreciation of tangible fixed assets is calculated by the straight-line method.　The estimated useful lives of the major fixed assets are summarized as follows: Buildings: 2 to 50 years Structures: 2 to 43 years Machinery and equipment: 2 to 17 years Vessels: 15 years Vehicles: 2 to 6 years Tools, furniture and fixtures: 2 to 25 years(2)Intangible fixed assets　Amortization of intangible fixed assets is calculated by the straight-line method.　Amortization of software for internal use is calculated based on an estimated useful life of five years.　Depreciation of certain specific depreciable assets (as defined in “Accounting Standards for Incorporated Administrative Agency, No. 87”) and certain specific removal costs of asset retirement obligations added to the book value to the relevant fixed asset (as defined in “Accounting Standards for Incorporated Administrative Agency, No.91”) are directly deducted from capital surplus and are presented as accumulated depreciation charged to capital surplus.4.Allowance(1)Allowance for doubtful receivables　The allowance for doubtful receivables is provided at an amount

determined based on the historical experience of bad debts with respect to ordinary receivables, plus an estimate of uncollectible amounts determined by reference to specific doubtful receivables from customers which are experiencing financial difficulties.(2)Accrued bonuses　An accrual for bonuses is provided for the payment of bonuses to directors and employees at the amount estimated to be incurred except for the portion to be covered by grants for administrative services.(3)Allowance for losses on guarantees　Allowance for losses on guarantees is provided for future losses on the execution of a guarantee given and is stated at the amount estimated based on the guarantee’s financial position and the fair value of the assets pledged as collateral, as well as other relevant factors.5.Allowance for Retirement Benefits　Allowance for retirement benefits is provided at an amount calculated based on the retirement benefit obligation and the fair value of the pension plan assets as of the balance sheet date except for those costs covered by grants for administrative services.　Actuarial gain or loss is being amortized by the straight-line method over eight years, a period which is shorter than the average remaining years of service of the employees, from the year following the year in which the gain or loss is recognized.6.Valuation of Securities(1)Held-to-maturity securities　Held-to-maturity securities are stated at amortized cost calculated by the straight-line method.(2)Investments in subsidiaries and affiliates　Investments in subsidiaries and affiliates are stated at cost determined by the moving-average method. Where there has been a permanent decline in the value of such investments, JOGMEC has written them down.For investments in subsidiaries and affiliates, if their business is exploration, it is difficult to judge the outcomes of such business. Therefore, until the outcomes become available, based on the internal notification, the fair values of the investments are computed as half of the amount invested by JOGMEC in each company.(3)Other securities1) Marketable securities classified as other securities are carried at fair values with changes in an unrealized holding gain or loss, net of the applicable income taxes, included directly in net assets section. Cost of securities sold is determined by the moving average method.2) Securities without fair market value are stated at cost determined by the moving average method. 7.Valuation of Inventories　Inventories are stated at the lower of cost or market, cost being determined by the specific identification method.8.Foreign Currency Translation　Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rates prevailing at the balance sheet date. The resulting exchange gain or loss is credited or charged to income.9.Leases　Noncancelable leases with aggregate lease payments of three million yen or more that transfer substantially all risks and rewards associated with the ownership of assets are accounted for as finance leases; however, the impact of the interest portion included in the lease payments has been omitted from this lease accounting because of its immateriality.　All other leases are accounted for as operating leases and related payments are charged to income as incurred.10.Consumption Taxes　Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.11.Other Accounting Information for Proper Disclosure of the Situation of Incorporated Administrative Agency　As a result of the commencement of operations for coal and geothermal resource development from September 15, 2012


Notes to Financial Statements （March 31, 2013）

under the provisions of Act to Partially Amend the Oil Stockpiling Act and Other Related Legislation to Prepare for Oil Supply Shortages in the Event of Disaster (Act No. 76 of 2012), the account names have been changed as follows;・To change “the Account for Oil and Natural Gas” to “the Account for Oil, Natural Gas and Others”・To change “the Account for Metal Mining Stockpiling, Exploration Loans and Others” to “the Account for Metal Mining Stockpiling, Investments, Loans and Others”Ⅱ.Notes to Financial Statements1.Balance Sheet

March 31, 2013(Yen) (U.S.dollars)

(1) Estimated amount of bonuses not recorded as accurd bonuses:

¥248,233,020 US $2,640,496

(2) Est imated amount of ret i rement benefits to be covered by grants for administrative services:

¥7,519,928,001 US $79,990,724

(3) Guarantees given for loans: ¥614,234,370,873 US $6,533,713,125

2.Statement of Operations(1)Miscellaneous losses　The miscellaneous losses includes the amount of payment to the National Treasury of a part of gain on sale, which was brought about by the transfer of the position as the contractor in a joint survey agreement in accordance with the exploration of mineral resources to a Japanese company. (2)Miscellaneous income　The miscellaneous income includes the gain on sale by the transfer of the position as the contractor in a joint survey agreement in accordance with the exploration on mineral resources to Japanese company.

Year ended March 31, 2013(Yen) (U.S.dollars)

(1) Loss on sales of fixed assetsMachinery and equipment:Vehicles:Tools, furniture and fixtures:

¥5,780,349¥157,246

¥2,448,031

US $61,487 US $1,673

US $26,040(2) Loss on disposal of fixed assets

Buildings:Structures:Machinery and equipment:Tools, furniture and fixtures:Patents:

¥1,531,905¥6,804,689

¥45,728,223¥1,761,968

¥2,175,5067

US $16,295 US $72,383

US $486,419 US $18,742 US $23,141

(3) Gain on sales of fixed assetsBuildings:Structures:Machinery and equipment:Vehicles:Tools, furniture and fixtures:

¥13,000¥105,203

¥8,441,235¥2,314,331

¥127,410

US $138 US $1,119

US $89,791 US $24,618

US $1,355

3.Statement of Cash Flows(1)Reconciliation between accounts reported in the balance sheet and cash and cash equivalents:

Year ended March 31, 2013(Yen) (U.S.dollars)

Cash on hand and in banks: ¥112,428,228,055 US $1,195,917,754 Time deposits: ( ¥107,602,413,030) (US $1,144,584,757)Cash and cash equivalents: ¥4,825,815,025 US $51,332,997

(2)Significant non-cash transactionsYear ended March 31, 2013(Yen) (U.S.dollars)

Assets acquired through finance leases:Tools, furniture and fixtures: ¥361,059,630

US $3,840,651

4.Leases(1)Future lease payments for finance lease transactions


Due within one year from the balance sheet date:

¥216,241,125 US $2,300,193

Due after one year from the balance sheet date:

¥284,683,309 US $3,028,224

Total: ¥500,924,434 US $5,328,416

　The above lease obligations have not been classified and presented by current and noncurrent portion in the balance sheet because of their immateriality.

5.Financial Instruments(1)Overview1)Policy for approaching financial instruments　JOGMEC is engaged in financing services, such as loan and investment business. To provide such services, JOGMEC raises funds from investments or loans by national government, or borrows funds from financial institutions.2)Type of financial instruments and related risk　JOGMEC owns financial assets, mainly comprising loans to corporations inside and outside Japan. These loans are exposed to credit risk that could accrue upon breach of contract by borrowers, etc. Its marketable securities and investments in securities, primarily consisting of debt securities and stocks, have been held until maturity and for implementing its policy. These securities and stocks are exposed to issuers' credit risk, and risks of interest rate and market price fluctuations. Borrowings are exposed to liquidity risk that could lead to failure on the due repayment date, including cases which would leave JOGMEC unable to use the market under certain circumstances.3)Risk management for financial instruments(i)Managing the credit risk　JOGMEC, v ia the respect ive departments in charge, manages risks pursuant to its internal policies concerning credit management and credit risks. For loans receivable, JOGMEC has developed and implemented a credit exposure management system that examines credits, sets credit limits, controls credit information, sets guarantees and collateral, and tackles bad debts on a per-project basis in deciding whether to approve projects and in carrying out regular valuations at the end of fiscal years. JOGMEC has also managed the credit risk of issuers’ marketable securities by regularly obtaining information concerning their credits and market values.(ii)Managing market risksi)Managing the interest risk　Interest rates are determined pursuant to the methods predefined in the statement of operation procedures or other rules.ii)Managing the price fluctuation risk　Shares of projects are owned for political purposes. JOGMEC monitors the market environments and financial conditions of the companies in which it has invested.iii)Managing liquidity risk relating to fundraising　JOGMEC has raised funds pursuant to its borrowing plans approved by the state minister in charge.(2)Estimated fair value of financial instruments　Carrying value of financial instruments in the balance sheet, their estimated fair value and difference as of March 31, 2013 are stated in the table below. 　However, insignificant financial instruments and financial instruments for which it is extremely difficult to determine the fair value are not included in the table. (Refer to (Note 2).)　 March 31, 2013

Carrying value Estimated fair value Difference

(Million yen)

(Million U.S.dollars)

(Million yen)


(Million yen)


(1)Cash on hand and in banks 112,428 1,195 112,428 1,195 - -

(2) Marketable securities and investments in securities1) Held-to-maturity securities 45,431 483 45,734 486 303 3

2) Other securities 46,287 492 46,287 492 - -

(3)Short-and long-term loans receivable 28,801 306 29,732 316 930 9

(4)Loans receivable for funding private-sector stockpiling activities

717,830 7,635 717,830 7,635 - -

(5)Long-term deposits 30,555 325 30,714 326 159 1 Total Assets 981,335 10,438 982,727 10,453 1,392 14 (1)Current portion of long-term borrowings and long-term borrowings

57,041 606 57,222 608 181 1

(2)Loans payable for funding private-sector stockpiling activities

717,830 7,635 717,830 7,635 - -

Total Liabilities 774,872 8,242 775,053 8,244 181 1




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Notes to Financial Statements （March 31, 2013）

(Note) Amounts less than one million yen and one million U.S. dollars are rounded down.(Note1)Methods to determining the estimated fair value of financial instruments and other matters related securities transactions.Assets(1)Cash on hand and in banks　Since cash on hand and in banks is settled in the short-term at a value almost similar to the book value, it is posted at the book value.(2)Marketable securities and investments in securities　The market value of securities is the price presented by the stock exchanges or financial institutions concerned.(3)Short- and long-term loans receivableThe fair value of loans receivable is based on the present value of the total of principal and interest discounted by the interest rate to be applied if similar new loans were entered into.(4)Loans receivable for funding private-sector stockpiling activities　Since these loans are settled in the short-term, the carrying value approximates fair value.(5)Long-term deposits　The market values of these deposits are determined by striking deposit interest rates supposed on new similar deposits based on their classification of periods.Liabilities(1)Current portion of long-term borrowings and long-term borrowings　These borrowings have been obtained at fixed interest rates. Their market values are determined by striking interest rates supposed on new similar borrowings from the total of the principal and interest, based on the borrowing type.(2)Loans payable for funding private-sector stockpiling activities　Since these loans are settled in the short-term at values almost similar to their book values, they are posted at the book value.(Note 2) It is extremely difficult to determine the fair value of nonlisted stocks of 233,171 million yen (2,480 million U.S. dollars) included in all of “Investments in subsidiaries and affiliates” and a part of “Investments in securities” in the balance sheet, because no quoted market price is available and it is difficult to estimate the future cash flows under contract. Therefore, they are not included in 2) Other securities of (2) Marketable securities and investments in securities in the table shown above.　Furthermore, the reserve for prevention of mine pollution (1,838 million yen (19 million U.S. dollars) posted in the balance sheet) must be repaid upon demand. Since it is extremely difficult to specify the time for such repayment demand, the reserve is not included in the table shown above. 6.Impairment of Fixed Assets　Fixed Assets with impairment losses(1)Telephone rights

March 31, 2013

Carrying Value Amount not charged to income

(Yen) (U.S dollars) (Yen) (U.S dollars)

Telephone rights: ¥20,000 US$213 ¥110,000 US$1,170

　The impairment losses were measured at the excess of the book values over the net realizable values. The net realizable values were estimated as an assessed amount of inheritance tax for the telephone rights. The impairment losses were charged to capital surplus as accumulated impairment loss charged to capital surplus in the balance sheet.7.Asset Retirement Obligations(1)Execution of asset retirement obligations(i)Outline of asset retirement obligations　The asset retirement obligations are the obligations to restore the mooring facil it ies of the deep seabed mining exploration vessels to their original condition in accordance with the permission to use the administrative properties by local governments, and the obligations to restore the site of the GTL demonstration plant to its original condition under the land lease contract.(ii)Method for estimating the asset retirement obligations　The total estimated amount of the obligations to restore the

mooring facilities of the deep seabed mining exploration vessels to their original condition is recognized based on the amount recorded as “allowance for restoration costs” in the fiscal year ended March 31, 2010 and, therefore, is not discounted. In addition, the discount rate of 0.109% was applied for calculating asset retirement obligation of the GTL demonstration plant as the removal costs is expected to be paid in half a year.(iii)The following table indicates the changes in asset retirement obligations for the year ended March 31, 2013


Balance at April 1, 2012: ¥311,927,000 US$3,318,019

Liabilities incurred due to the acquisition of property, plant and equipment: - -

Accretion expense: ¥73,000 US$777

Liabilities settled: ¥312,000,000 US$3,318,796

Balance at March 31, 2013 - -

(2)Asset retirement obligations not included in the balance sheet　Obligations to restore the Metals Technology Center to its original condition　JOGMEC is obliged to restore the land of the Metals Technology Center to its original condition according to the land sublease contract with local governments.　The Metals Technology Center is, as a part of facilities operated by local governments, engaged in technological research and development activities in cooperation with other institutions. The determination of removal of the Metals Technology Center shall be made based on the opinions of the local governments, as well as that of JOGMEC, and the time of such removal is not yet determined.　As a result, it is difficult to reasonably estimate the amount of asset retirement obligations.　Therefore, the asset retirement obligations for the Metals Technology Center are not recorded on the balance sheet.8.Transfer of Unnecessary Properties to GovernmentThe description of the transfer of unnecessary properties to the government is as follows:

(1)

Outline of type, book value, etc. of assets transferred to government as unnecessary properties

Cash on hand and in banks

Cash on hand and in banks

Machinery and equipment

(Funds to be held due to the transfer of the official vehicle of overseas branch and the like)

(Funds to be held due to the transfer of mooring lines of Kikuma site management office)

(Facility acquired through the project for GTL demonstration [Research and development of FT synthesis technology])

Book value:22,252,033(yen) 236,699(U.S.dollars)


Book value:27,596,482(yen)

293,548(U.S.dollars)

(2)Reasons for which assets became unnecessary

Funds to be held due to the transfer of the official vehicle of the overseas branch and the like are not expected to be disbursed.

Funds to be held due to the transfer of mooring lines of Kikuma site management office is not expected to be disbursed.

With the termination of the project for GTL demonstration [Research and development of FT synthesis technology], the facilities acquired through this project became unnecessary.

(3) Method of transfer to government

Payment in kind in accordance with paragraph (1) of Article 46-2 of Act on General Rules for Incorporated Administrative Agency

Payment in cash in accordance with paragraph (2) of Article 46-2 of Act on General Rules for Incorporated Administrative Agency

(4)

Amount of capital gains from sale of assets in connection with which transfer was made by way of cash payment

- - 14,175,861(yen) 150,791(U.S.dollars)

(5)

Amount of costs deducted from amount of capital gains to be transferred to government

- - -

(6) Amount of transfer to government

22,252,033(yen) 236,699(U.S.dollars)

35,000,000(yen) 372,301(U.S.dollars)

14,175,861(yen) 150,791(U.S.dollars)

(7) Date of transfer to government September 24, 2012 September 24, 2012 October 3, 2012

(8) Amount of reduction of capital

22,252,033(yen) 236,699(U.S.dollars)

35,000,000(yen) 372,301(U.S.dollars) -


(1)





(Facility acquired through the project for research on microbial restoration of natural gas using indigenous microbes in oil/gas-fields)

(Facility acquired through the project for gas to wire system (GTW) with minimal gas treatment and optimum power generation adjacent to small gas field)

(Facility acquired through the project for development of dimethylether to propylene (DTP) process)

Book value:1,005,363(yen)

10,694(U.S.dollars)


Book value:543,516(yen)

5,781(U.S.dollars)


With the termination of the project for research on microbial restoration of natural gas using indigenous microbes in oil/gas-fields, the facilities acquired through this project became unnecessary.

With the termination of the project for gas to wire system (GTW) with minimal gas treatment and optimum power generation adjacent to small gas field, the facilities acquired through this project became unnecessary.

With the termination of the project for development of dimethylether to propylene (DTP) process, the facilities acquired through this project became unnecessary.



(4)


1,462,000(yen) 15,552(U.S.dollars)

3,580,280(yen) 38,084(U.S.dollars)

836,000(yen) 8,893(U.S.dollars)

(5)


- - -


1,462,000(yen) 15,552(U.S.dollars)

3,580,280(yen) 38,084(U.S.dollars)

836,000(yen) 8,893(U.S.dollars)

(7) Date of transfer to government March 27, 2013 March 27, 2013 March 27, 2013

(8) Amount of reduction of capital - - -

(1)





(Facility acquired through the project for R&D of zeolite membranes for innovative natural gas conversion processes)

(Facility acquired through the project for development of a low-temperature DME steam reforming system for fuel-cell vehicles)

(Facility acquired through the project for development of novel syngas process using catalytic partial oxidation)


9,597(U.S.dollars)



9,566(U.S.dollars)


With the termination of the project for R&D of zeolite membranes for innovative natural gas conversion processes, the facilities acquired through this project became unnecessary.

With the termination of the project for development of a low-temperature DME steam reforming system for fuel-cell vehicles, the facilities acquired through this project became unnecessary.

With the termination of the project for development of novel syngas process using catalytic partial oxidation, the facilities acquired through this project became unnecessary.



(4)


1,850,000(yen) 19,679(U.S.dollars)

1,959,000(yen) 20,838(U.S.dollars)

1,597,000(yen) 16,988(U.S.dollars)

(5)


- - -


1,850,000(yen) 19,679(U.S.dollars)

1,959,000(yen) 20,838(U.S.dollars)

1,597,000(yen) 16,988(U.S.dollars)

(7) Date of transfer to government March 27, 2013 March 27, 2013 March 27, 2013

(8) Amount of reduction of capital - - -

(1)




(Facility acquired through the project for the industrialization of the synthesis gas production process by catalytic partial oxidation process)

(Facility acquired through the project for development of natural gas hydrate pellet transportation chain)


9,554(U.S.dollars)



With the termination of the project for the industrialization of the synthesis gas production process by catalytic partial oxidation process, the facilities acquired through this project became unnecessary.

With the termination of the project for development of natural gas hydrate pellet transportation chain, the facilities acquired through this project became unnecessary.



(4)


899,000(yen) 9,563(U.S.dollars)

5,069,000(yen) 53,920(U.S.dollars)

(5)


- -


899,000(yen) 9,563(U.S.dollars)

5,069,000(yen) 53,920(U.S.dollars)

(7) Date of transfer to government March 27, 2013 March 27, 2013

(8) Amount of reduction of capital - -

Ⅲ．Actions Resulting in Significant Financial Obligations　Not applicable.Ⅳ．Definitions of Terminology　“Loans receivable for funding private-sector stockpiling activities” and “Loans payable for funding private-sector stockpiling activities” 　JOGMEC provides loans to crude oil refining companies and oil and gas importers, which are required to maintain certain level of stockpiling to cover consumption for a certain number of days. The loans receivable are provided to finance the purchase of oil and gas stocks, while the loans payable represent borrowings of the same amount to source these loans. JOGMEC classifies both types of loans as current assets and current liabilities because all related loans receivable and payable are restructured at the end of April every year. Because these loans are material, they are presented separately in the balance sheet.Ⅴ．Material Subsequent Events　Not applicable.




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Audit of Financial Statements

　Pursuant to Article 39 of“ Act on General Rules for Incorporated Administrative Agency,” we have audited the financial statements by account (except for the proposal for appropriation of retained earnings and disposal of accumulated deficits) consisting of the balance sheet by account, the statements of operations, cash flows and execution costs for administrative services by account, significant accounting policies, notes to financial statements and the related supplementary schedules by account of Japan Oil, Gas and Metals National Corporation (“JOGMEC”) for the 2012 fiscal year from April 1, 2012 to March 31, 2013. We have also audited the combined financial statements consisting of the combined balance sheet, the combined statements of operations, cash flows and the execution costs for administrative services, significant accounting policies, notes to financial statements and the related combined supplementary schedules.

President’s Responsibility for the Financial Statements and the Related Supplementary Schedules

　President is responsible for the preparation and fair presentation of these financial statements and the related supplementary schedules (except for the proposal for appropriation of retained earnings and disposal of accumulated deficits) in accordance with“ Accounting Standards for Incorporated Administrative Agency” generally accepted in Japan, and for designing and operating such internal control as president determines is necessary to enable the preparation and fair presentation of the financial statements and the related supplementary schedules that are free from material misstatement, whether due to frauds, errors or illegal acts.

Auditor’s Responsibility

　Our responsibility is to express an opinion on these financial statements and the related supplementary schedules based on our audit. We conducted our audit in accordance with “Auditing Standards for Incorporated Administrative Agency” generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the related supplementary schedules are free from material misstatement. We plan the audit considering the possibility that frauds, errors or illegal acts committed by president or other personnel within JOGMEC’s organization may result in material misstatements of the financial statements.

　An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the related supplementary schedules. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements and the related supplementary schedules, whether due to frauds, errors or illegal acts. The purpose of an audit of the financial statements is not to express an opinion on the effectiveness of the entity’s internal control, but in making these risk assessments the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by president, as well as evaluating the overall presentation of the financial statements and the related supplementary schedules.

　We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. This basis includes the fact that, during the course of our audit, we did not identify any frauds, errors or illegal acts committed by president or other personnel within JOGMEC’s organization which would result in material misstatements of the financial statements and the related supplementary schedules. However, our audit was not designed for the purpose of expressing an opinion on whether or not there were any frauds, errors or illegal acts committed by president or other personnel within JOGMEC’s organization which would not result in material misstatements of its financial statements.

Opinion

　In our opinion, the financial statements and the related supplementary schedules by account of the Account for Oil, Natural Gas and Others, the Account for Metal Mining Stockpiling, Investments, Loans and Others, the General Account for Metal Mining, the Reserve for Prevention of Mine Pollution Account, and the Fund for Prevention of Mine Pollution Account, as well as the combined financial statements referred to above present fairly, in all material respects, the financial position by account and on a combined basis of JOGMEC, and results of operations, its cash flows and its execution costs for administrative services by account and on a combined basis in conformity with “Accounting Standards for Incorporated Administrative Agency” generally accepted in Japan.

Opinion on the Proposal for Appropriation of Retained Earnings and Disposal of Accumulated Deficits and the Financial Reports

　Pursuant to Article 39 of “Act on General Rules for Incorporated Administrative Agency,” we have audited the proposal for appropriation of retained earnings and disposal of accumulated deficits for each account as well as the financial reports for each account and on a combined basis of JOGMEC for the 2012 fiscal year from April 1, 2012 to March 31, 2013.

President’s Responsibility for the proposal for appropriation of retained earnings and disposal of accumulated deficits and the financial reports

　President is responsible for the preparation and fair presentation of these proposals for appropriation of retained earnings and disposal of accumulated deficits in accordance with the related regulations and the financial reports in accordance with the budget classification.

Auditor’s Responsibility

　Our responsibility is to express an opinion on whether the proposal for appropriation of retained earnings and disposal of accumulated deficits is presented in accordance with the related regulations and whether the financial reports present properly JOGMEC’s financial affairs in accordance with the budget classification.

Opinion on the proposal for appropriation of retained earnings and disposal of accumulated deficits and the financial reposts

Our opinion is as follows:(1) The proposal for appropriation of retained earnings and disposal of accumulated deficit for each account is presented in accordance with the related regulations.(2) The financial reports for each account and on a combined basis of JOGMEC present properly JOGMEC’s financial affairs in accordance with the budget classification established 　　by president.

Report on Business Report　Pursuant to Article 39 of “Act on General Rules for Incorporated Administrative Agency,” we have audited the accounting matters stated in the business report by account of JOGMEC for the 2012 fiscal year from April 1, 2012 to March 31, 2013. The accounting matters which we audited in the business report were derived from the accounting books and records of JOGMEC.

Report on Business Report

　In our opinion, the accounting matters stated in the business report present properly the financial position and the results of its operations of JOGMEC.

　The U.S. dollar amounts in the accompanying financial statements with respect to the year ended March 31, 2013 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion; such translation has been made on the basis described in Note 1.

Conflicts of Interest

　We have no interest in JOGMEC which should be disclosed in compliance with the Certified Public Accountants Act.

Ernst & Young Shin Nihon LLCJune 14, 2013

Tokyo, Japan

Independent Auditor's ReportMr. Kawano HirobumiPresidentJapan Oil, Gas and Metals National Corporation


Independent Auditor's Report Financial Review

What is an Incorporated Administrative Agency?

　An incorporated administrative agency is an agency that is responsible for a certain subset of administrative and business duties that are handled by the division charged with executing government policy. It has been separated from the administrative activities of the various ministries and awarded independent corporate status and constitutes a system designed to stimulate and improve the quality of services, enhance efficiency, provide for independent management, and promote greater transparency.　The competent authority governing the incorporated administrative agency conducts a thorough evaluation of all aspects of the agency’s business performance at the end of the period for the medium-term objectives, including a review of the necessity for continuing the services offered by the incorporated administrative agency in question, the state of the organization, and other organizational and business factors. The requisite steps are then taken based on those results.　The role or mission of JOGMEC as the primary institution for resource and energy development, as the institution bearing the responsibility for accumulating reserves as the last resort for security, and as the institution upholding one part of environmental conservation was clearly delineated in the third medium-term objective beginning in April 2013.

■Name　 Japan Oil, Gas and Metals National Corporation (JOGMEC）

■President　 Hirobumi Kawano

■Capital　 503 billion yen (as of 31 March, 2013)

■No. of employees 481 people (as of 31 March, 2013)

■History Japan Oil, Gas and Metals National Corporation (JOGMEC) was established as an incorporated administrative

agency on 29 February 2004, with the integration of the former Japan National Oil Corporation (JNOC) and

Metal Mining Agency of Japan (MMAJ)

■Purposes The purposes of the JOGMEC are to supply the necessary funds for exploring for petroleum and combustible

natural gas, coal, geothermal energy as well as metallic minerals or others and to conduct other operations

necessary for promoting the development of petroleum, combustible natural gas resources, coal resources,

geothermal resources and metallic mineral resources as well as operations necessary for stockpiling petroleum and

metallic mineral products, thereby contributing to a stable and low-price supply of petroleum, etc., coal, geothermal

energy and metallic mineral products, as well as to loan the necessary funds for controlling mine damages caused

by metal mining, etc. and other operations, thereby contributing to the protection of the nation’s health, the

preservation of the living environment and the sound development of metal mining, etc.

*JOGMEC has started operations of coal and geothermal resource development in 2012 in accordance with a

legal amendment in September 2012.

■Location　 Headquarters

　Toranomon-twin-buildings, 2-10-1 Toranomon, Minato-ku, Tokyo 105-0001, Japan

　Tel : +81-3-6758-8000 / Fax : +81-3-6758-8008

Technology & Research Center

　1-2-2 Hamada, Mihama-ku, Chiba-city, Chiba 261-0025, Japan

　Tel : +81-43-276-9212 / Fax : +81-43-276-4061


Overview of JOGMEC General Overview

Position Name Term Previous History

President Hirobumi Kawano2008.4.1

～

2016.2.28

- Senior Vice President, JFE Steel Corporation, - Director General, Agency for Natural Resources and Energy, Government of Japan- Director General, Basic Industries Bureau, Government of Japan- Director General, Petroleum Department, Agency for Natural Resources and Energy, Government of Japan

Executive Vice

PresidentKeisuke Kuroki

2013.6.10

～

2016.2.28

- Executive Director, Nippon Steel Corporation- Managing Executive Offier, Chief of Kimitsu Ironworks, Nippon Steel Corporation- Vice President & Executive Officer, Nippon Steel Corporation- Executive Vice President, Nippon Steel Corporation- Executive Corporate Adviser, Nippon Steel & Sumitomo Metal Corporation

Executive Director

Hisanori NeiInternal Audit (Office), General Coordination, Financial Management andAccounting, & EvaluationResearch and Analysis

2012.4.1

～

2014.3.31

- Director, Petroleum Refining and Reserve Division, Natural Resources and Fuel Department, Agency for Ntural Resources and Energy, Ministry of Economy, Trade and Industry- Director, Technical Cooperation Division, Trade and Economic Cooperation Bureau, Ministry of Economy, Trade and Industry- Director, Nuclear Power Inspection Division, Nuclear and Industrial Safety Agency, Ministry of Economy, Trade and Industry- Director-General, Tohoku Bureau of Economy, Trade and Industry, Ministry of Economy, Trade and Industry- Deputy Director-General, Nuclear and Industrial Safety Agency, Ministry of Economy, Trade and Industry

Executive Director

Kenji AkiyoshiOil & Gas Upstream Business Unit

2013.5.11

～

2014.2.28

- Deputy-Director of Middle East Office- Councilor, Technical Survey Department- Director, Technology Planning Department- Director, Project Promotion Department

Executive Director

Yoshihiro TsujiOil & Gas Upstream Technology Unit

2012.3.1

～

2014.2.28

- Director, Exploration Research Division, R&D Promotion Department, JOGMEC- Director-General, Technical Research Department, JOGMEC- Director-General, Exploration Department, JOGMEC

Executive Director

Hideyuki UedaMetals Strategy & Exploration Unit

2012.3.1

～

2014.2.28

- Manager, Matsuo Mine Pollution Control Project Support Office, Metal Mining Agency of Japan- Director,Metal Mining Loan Group, JOGMEC- Director-General,Matals Mining Technology Department, JOGMEC

Executive Director

Naoyuki HinataStockpile Unit

2013.6.10

～

2014.3.31

- Councilor, Petroleum Stockpiling Mobility Group- Councilor, Stockpiling Planning Department- Councilor, Oil Gas Stockpiling Department and Director, State-Run Kurashiki Oil Gas Stockpiling Base- Director, Oil Gas Stockpiling Department

Executive Director

Tetsuji Nagatomo Metals & Coal Finance andEnvironment Unit

2012.4.1

～

2014.3.31

- Director, Audit Department, Deposit Insurance Corporation- Director-General, Hiroshima Regional Taxation Bureau, Ministry of Finance- Counselor, Minster's Secretariat, Ministry of Finance- Concurrent Posts:Counsellor, Cabinet Secretariat, Cabinet Affairs OffiCe, member of National Policy Unit, Cabinet Secretariat

Auditor Masaru Namura 2012.4.1

～

2014.3.31

- Executive Officer in charge of Engineering, DOWA Holdings Co., Ltd.- Executive Director in charge of engineering and intellectual properties, DOWA Holdings Co., Ltd. - Auditor, Akita Zinc Co., Ltd.

Auditor Hiroshi Kubota2011.7.1

～

2014.2.28

- Deputy Director General, Projetct Department, JOGMEC- Director, Public Relations Team, Corporate Strategy & General Affairs Group, JOGMEC- Director, Accounting Divisin, General Administration Department, JNOC- Director, Project Evaluation Department, JNOC- General Manager, Paris Office, Japan National Oil Corporation（JNOC）

As of Oct 2013


Officers

President

Executive Vice President

Executive Directors

Internal Audit Office

Genaral Coordination Department

Financial Management & Accounting Department

Evaluation Department

Research and Analysis Department

Technical Coordination and Integration Department

Exploration Department

Seismic Vessel Project Group

Technical Department

Technical Solutions Project Group

Stockpile Planning Department

Petroleum Stockpile Management Department

LPG Stockpile Management Department

Rare Metals Stockpile Department

Metals Environment Management Department

Metals Finance Department

Coal Development Department

Coal Asset Management Department

Kyushu Branch Office

Geothermal Resource Development Department

Business Strategy Department

Project Department

Metals Strategy Department

Metals Exploration Department

Metals Mining Technology Department

Oil & Gas Upstream Technology Unit

Metals Strategy & Exploration Unit

Stockpile Unit

Metals & Coal Finance and

Environment Unit

Oil & Gas Upstream Business Unit

Auditors

Auditors' Office

Chief Geologist

As of Oct 2013


Organization Structure

Office Address TEL FAX

Beijing Office (China)3005 Chang Fu Gong Office Building, Jia-26, Jian Guo Men Wai Street,Beijing CHINA 100022

+86-10-6590-9520 +86-10-6590-8366

Jakarta Office (Indonesia)5th Floor, SUMMITMAS II,Jl Jend,Sudirman Kav,61-62,Jakarta 12190 INDONESIA

+62-21-522-6640 +62-21-522-6650

Sydney Office (A　ustralia)Level 23, BT Tower, 1 Market Street, Sydney NSW 2000 AUSTRALIA

+61-2-9264-9611 +61-2-9264-2493

+61-2-9264-4914

Washington Office (U.S.A.)1233 20th Street, N.W. Suite 206 Washington,D.C. 20036 U.S.A.

+1-202-775-0602 +1-202-775-0605

Houston Office (U.S.A.)One Riverway, Suite 450 Houston, Texas 77056, U.S.A.

+1-713-622-0204 +1-713-622-1330

Vancouver Office (Canada)1710-400 Burrard Street, Vancouver, B.C. V6C3A6 CANADA

+1-604-685-1282 +1-604-685-4123

Mexico Office / Oficina en Mexico (Mexico)

Goldsmith No. 37, Oficina 401, Col. Chapultepec Polanco, C.P.11560 MEXICO, D.F., MEXICO

+52-55-5280-1099 +52-55-5280-0214

Lima Office / Oficina en Lima (Peru)

Av. Camino Real 348, Torre El Pilar, Piso 7, Oficina 704, San Isidro Lima-27, PERU

+51-1-221-5088 +51-1-221-1871

Santiago Office/ Oficina en Santiago (Chile)

World Trade Center, Torre Norte 1005, Av. Nueva Tajamar 481, Las Condes, Santiago, CHILE

+56-2-2203-6130 +56-2-2203-6121

Moscow Office (Russia)R o o m 6 5 0 , H o t e l : M e z h d u n a r o d n a y a - 2 K rasnopresnenskaya Nab.12 Moscow 123610 RUSSIAN FEDERATION

+7-495-967-0405 +7-495-967-0407

London Office (U.K.)Carrington House, 126-130 Regent Street, London W1B 5SE U.K.

+44-20-7287-7915 +44-20-7287-7916

+44-20-7287-7917

Middle East Office (U.A.E.)P.O.BOX 6270 Al-Masaood Tower #904 , Sheikh Hamdan Street, Abu Dhabi, U.A.E.

+971-2-6330366 +971-2-6217704

+971-2-6330280

Botswana Geologic Remote Sensing Centre (Botswana)

Plot 54353, 5th Floor Office B,Masa Centre, Gaborone, BOTSWANA

+267-390-2878 +267-390-2879

Hanoi Representative Office (Vietnam)

6F, Sun Red River Building, 23 Phan Chu Trinh Street, Hoan Kiem District, Hanoi, VIETNAM

+84-4-3944-9912 +84-4-3944-9915


Woldwide Network

Office Address

Metals Technology Center 9-3 Furudate, Kosakakozan, Kosaka, Akita 017-0202 Japan

Tomakomai Site Management Office 308 Aza-Shizukawa, Tomakomai-shi, Hokkaido 059-1363 Japan

Mutsu-Ogawara Site Management Office 525-2 Aza-Futamata, Oaza-Obuchi, Rokkasho-mura Kamikita-gun, Aomori 039-3212 Japan

Akita Site Management Office 219 Aza-Ashizawa, Funakawa, Funakawa Minato, Oga-shi, Akita 010-0511 Japan

Kuji Site Management Office 8-105-2 Heinokuchi, Natsui-cho, Kuji-shi, Iwate 028-0001 Japan

Fukui Site Management Office 1 Aza-Rinkai, 38 Ishishinbo-cho, Fukui-shi, Fukui 910-3133 Japan

Kikuma Site Management Office 4642-1 Tane, Kikuma-cho, Imabari-shi, Ehime 799-2302 Japan

Shirashima Site Management Office 1-108 Hibiki-machi, Wakamatsu-ku, Kitakyushu-shi, Fukuoka 808-0021 Japan

Kamigotou Site Management Office818-411 Aza-Orishima, Tsuzukihamanouragou, Shinkamigoto-cho, Minamimatsuura-gun, Nagasaki 857-4415 Japan

Kushikino Site Management Office 1 Seisatsu-cho, Ichikikushikino-shi, Kagoshima 896-0046 Japan

Shibushi Site Management Office5024-1 Aza-Shinsuzaki, Kawahigashi, Higashi-Kushira-cho, Kimotsuki-gun, Kagoshima 893-1615 Japan

Kamisu Site Management Office 6225-40 Okunoya, Kamisu-shi, Ibaraki 314-0116 Japan

Nanao Site Management Office 165-1 Mimuro-machi, Nanao-shi, Ishikawa 926-0007 Japan

Kurashiki Site Management Office 6-6-5 Minamise, Kurashiki-shi, Okayama 712-8055 Japan

Namikata Site Management Office 600 Ko, Miyazaki, Namikata-cho, Imabari-shi, Ehime 799-2104 Japan

Fukushima Site Management Office 58-2 Shiohamamen, Fukushima-cho, Matsuura-shi, Nagasaki 848-0403 JapanHokkaido Metals Environment & Geother-mal Resource Support Office

30-31 Umemoto-cho, Date-shi, Hokkaido 052-0022 Japan

Tohoku Metals Environment & Geothermal Resource Support Office

2-5-17 Matsunami, Yamagata-shi, Yamagata 990-0023 Japan

Chugoku-Kinki Metals Environment & Geothermal Resource Support Office

Toranomon Twin Building, 2-10-1 Toranomon, Minato-ku, Tokyo 105-0001 Japan

Kyushu Metals Environment & Geothermal Resource Support Office

1-5 Tashima Hon-machi, Hita-shi, Oita 877-0026 Japan

Kashiwazaki Test Field Office 690 Oaza-Hirai, Kashiwazaki-shi, Niigata 945-1353 JapanMatsuo Mine Pollution Control Project Support Office

1-3-1 Kashiwadai, Hachimantai-shi, Iwate 028-7303 Japan

Kyushu Branch OfficeTaihaku Center Bldg., 2-19-24 Hakata-ekimae, Hakata-ku, Fukuoka-shi, Fukuoka 812-0011 Japan

★Head Office　★Technology & Research Center（TRC）●Petroleum Stockpile Site Management Office　　LPG Stockpile Site Management Office or Project Site Management Office●Kashiwazaki Test Field Office　■Metals Enviroment & Geothermal Resource Support Office,Kyushu Branch Office　■Metals Technology Center

Shirashima Site Management Office

Tomakomai Site Management Office

Kashiwazaki Test Field OfficeNanao Site Management OfficeFukui Site Management Office

Hokkaido Metals Environment & Geothermal Resource Support Office

Kurashiki Site Management Office

Kamisu Site Management Office

Mutsu-Ogawara Site Management OfficeMetals Technology CenterKuji Site Management OfficeMatsuo Mine Pollution Control Project Support OfficeAkita Site Management OfficeTohoku Metals Environment & Geothermal Resource Support Office

Technology & Research Center (TRC)

Head OfficeChugoku-Kinki Metals Environment & Geothermal Resource Support Office

Namikata Site Management OfficeKikuma Site Management Office

Kyushu Branch Office

Fukushima Site Management Office

Kamigotou Site Management Office

Kyushu Metals Environment &Geothermal Resource Support OfficeKushikino Site Management Office

Shibushi Site Management Office


Domestic Network

Year ended March 31

Annual Report2013

ANNUAL REPORT

Head OfficeToranomon Twin Building

2-10-1 Toranomon, Minato-kuTokyo 105-0001 JAPAN

TEL : +81-3-6758-8000 FAX :+81-3-6758-8008

Technology & Research Center1-2-2, Hamada, Mihama-ku, Chiba-city,

Chiba 261-0025, JAPANTEL : +81-43-276-9212 FAX : +81-43-276-4061

http://www.jogmec.go.jp/

JAPEX ResearchCenter

JOGMECTRC

Tokyo

Tokyo

Tokyo

ChibaJR Sobu Line

Keisei Chiba LineMakuhariHongoStation

Makuhari I.C.

Wangan I.C.

Makuhari CorpBus Stop

Wangan Avenue

DrivingLicence Center

MakuhariMesse

Keisei BusStation

KaihinMakuhariStation

Toranomon Twin Building

Ginza Line

Nan

boku

Lin

e

Toranomon sta.

Tameike Sanou sta.

Kamiya Cho sta.

Exit No.4

Exit No.3

Hotel Okura

METI

Toranomon Hospital

National Printing Bureau

Ministry of Education, Culture, Sports, Science & Technology

Embassy of the USA

Hotel Okura

Japan Post

TV Tokyo

Hib

iya

Line

ＪＯＧＭＥＣ

Japan Oil, Gas and Metals National Corporation

Reliable Partnership

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