We have been exploring ways to appropriately process the sand contaminated by past oil leaks in the West Bakr Oil Field in Egypt. Because the oil produced from the field is heavy and therefore difficult to clean up, we have decided to recycle the sand as an ingredient in asphalt pavement. To actually use the sand in pavement, it has to be mixed with asphalt, so we have been conducting technological research into the physical properties of the contaminated sand and potential safety problems associated with using it, and conducted a processing test. Based on our results, we plan to begin construction of an asphalt plant in Egypt. Oil leaks continued to occur in fiscal 2010, so we are also working on renovating corroded equipment to prevent further soil contamination.

Meanwhile in Japan, with the recent abolishment of heliports in Fukushima Prefecture, we returned land that was used for a heliport to its owner. We performed a soil test in accordance with the Soil Contamination Countermeasures Act and confirmed no presence of soil contamination.

In Japan, we comply with various laws pertaining to the release of chemical substances. We accurately report our emissions in accordance with the Pollutant Release and Transfer Register (PRTR) Law and strive to properly manage chemical substances in our operations.

We also monitor the SOx, NOx, and VOCs we emit into the atmosphere. Whereas Japan’s Air Pollution Control Act calls for an approximately 30 percent reduction in VOC emissions from stationary sources from fiscal 2000 levels by fiscal 2010, the INPEX Group achieved a dramatically greater reduction of 64.2% in fiscal 2010.

The majority of the industrial waste generated during oil and natural gas development consists of drill cuttings. Based on the concentration of hazardous substances it contains, this waste in Japan is either sent to a landfill as sludge or recycled into construction materials as per environmental law.

Overseas, not all countries have adequate environmental laws and regulations in place. At an offshore rig platform* off the coast of the Republic of Suriname in South America, we make our own voluntary efforts in compliance with international treaties and other legal frameworks. For oily sludge, we have laid down procedures to transport the sludge to land and put it through a biodegradation process at a treatment plant. General waste resulting from daily life on the platform is separated into glass, plastic, metal, and other material types, shredded and processed in Suriname, and then recycled.

* Offshore rig: A large floating structure that houses the personnel and equipment needed to extract and process oil and natural gas from below the ocean floor

Sometimes newly extracted oil and natural gas contains groundwater. This water is separated and collected by our production equipment, but it still contains residual amounts of oil that need to be taken out. The INPEX Group properly conducts wastewater treatment with its production facilities in accordance with the environmental law of each area in which we operate. Fluids generated from the process of drilling a well are recycled and ultimately processed as industrial waste. We sometimes release wastewater from offshore rigs into the ocean, but always conduct an environmental impact assessment beforehand.

With stricter regulations stipulated under the Law Concerning Special Measures Against PCB Waste enacted in Japan in July 2001, we gradually replaced fluorescent lights, condensers, and other equipment and materials containing polychlorinated biphenyls (PCBs) used by Operational Organizations in Japan and entirely discontinued the use of such equipment and materials by the end of fiscal 2005. The law requires businesses to properly treat and dispose of all stored PCB equipment and PCB waste by July 2016. We have completed the registration process for all our Operational Organizations and are strictly managing PCB by appointing a person responsible for the management of industrial waste requiring special management, as required under the Waste Management Law in Japan. In addition, we now send status reports to local government agencies annually. In July 2010, we complete the outsourced treatment and disposal of 14 high-pressure condensers stored in Joetsu, Niigata Prefecture.

In 2005, we conducted a survey of potential airborne asbestos for all of our 673 buildings in Japan, including dorms and company housing, and in 2006 removed sprayed materials and implemented other measures based on the survey results. In 2008, we re-performed analysis for three additional types of asbestos requiring inspection in response to an advisory letter on the prevention of airborne asbestos in private sector buildings from the Ministry of Land, Infrastructure, Transport and Tourism. As asbestos-containing building materials were discovered in two locations, we sealed off the contaminated areas and removed the materials.

When disposing of some of our mobile offices (gas production test facilities) in 2011, we discovered that they used building materials containing nonfriable forms of asbestos. We then conducted a visual survey of similar mobile offices, and confirmed that 15 buildings possibly contained asbestos. While we have kept these building materials in place, assuming that the asbestos they contain are of the nonfriable type, we have decided to verify the presence of asbestos by using an expert laboratory at the time of disposal.

When removing and disposing of asbestos-containing building materials, we do so under the direction of our HSE Unit and in accordance with the Ordinance on Prevention of Health Impairment Due to Asbestos. We also conduct semi-annual inspections to continually monitor and keep photographic records of existing insulating materials that could potentially release asbestos into the air.