Toshiaki Kitamura
President
INPEX CORPORATION

INPEX Holdings Inc. merged with INPEX CORPORATION and Teikoku Oil Co., Ltd. to become the new INPEX CORPORATION on October 1, 2008. With this merger, we have consolidated corporate headquarters functions and fully integrated the organizational structure to facilitate more efficient and flexible management of the company.

The INPEX Group has a mission to provide customers with a stable and efficient supply of energy sources—primarily oil and natural gas—so as to bring a better quality of life to society. In carrying out this mission in 74 projects in 26 countries (as of June 30, 2009), we firmly believe in demonstrating a sense of ethics, giving highest priority to safety and environmental preservation in operations, and contributing to the communities where we operate. Accordingly, we play our role as a good corporate citizen in continuing a close dialogue with diverse stakeholders and supporting the sustainable development of society. This, we believe, is what CSR is all about.

As the Intergovernmental Panel on Climate Change (IPCC) has reported, global warming has become a formidable challenge that all of mankind must work together to take up. The 15th Conference of Parties (COP15) to the United Nations Framework Convention on Climate Change is scheduled to be held in Copenhagen in December 2009 to establish a new global climate agreement for the period beyond 2012 when the Kyoto Protocol expires. In June 2009, the Japanese government announced its medium-term goal of reducing domestic greenhouse gas (GHG) emissions by 15% by 2020 below the 2005 level. There will be accelerated efforts in the international community to establish a framework for achieving a low-carbon society.

The INPEX Group adopts rigorous pro-environmental policies and practices in the E&P business, while attempting to improve productivity at project sites so as to emit fewer GHGs. We will also commit greater resources to developing natural gas—a clean energy source that generates less CO₂ when burned than oil does. In addition, we are stepping up our engineering efforts to implement carbon capture and storage—an approach endorsed by the IPCC to reduce CO₂ emissions—and to generate methane using microbes found in depleted oil fields.

When the new, fully integrated INPEX CORPORATION became operational in October 2008, the Group established three strategies. They are: (1) To continue to expand the oil and gas upstream business; (2) To establish a natural gas supply chain and diversify the gas business; and (3) To become a company that offers a broader range of energy.

First, in our core business of developing oil and natural gas, we will work more closely with other leading players in the international arena to maintain or increase our recoverable reserves of oil and natural gas to secure primary energy sources. Second, we will set up an efficient natural gas supply chain that links gas sources inside and outside Japan to the domestic market with LNG receiving terminals and an expanded pipeline network. We will also diversify the natural gas business to attract more customers to this clean energy source. Third, we will strive to become a company that offers customers a broader range of energy; in an effort to make a low-carbon society a reality, we will continue to assess the commercial viability of making new application of conventional hydrocarbon fuels, such as GTL (gas-to-liquids) processing and DME (dimethyl-ether) processing, and commercial viability of alternative and renewable energy sources.

With this three strategies as a guiding framework, we will fulfill our mission to provide customers with a stable and efficient supply of energy so as to bring a better quality of life to society, thus fulfilling our role in supporting the sustainable development of society.

In April 2006, we established the Mission, which states where the Group is going and what role the Group will play in social development, and the CSR Policy, which promotes CSR initiatives and reaffirms the Group’s commitment to them, both intended to lay the solid groundwork for the group-wide CSR initiatives. When the new INPEX CORPORATION became operational in October 2008, we completely updated the Compliance Manual, in which the Code of Conduct discusses how every officer and employee of the Group should perform ethically on a daily basis. We ensure that all officers and employees fully understand what the Mission, the CSR Policy and the Code of Conduct represent. In addition, we have incorporated into the new employee assessment system the value evaluation criteria to appraise an employee’s behavior and attitude toward the values in which the Company believes in support of the sustainable development of society; the criteria state that every one of our employees has an obligation to uphold strong business ethics and to have high moral standards as a member of a company that serves society. These are all intended to foster greater awareness and appreciation of the CSR cause among all officers and employees.

In this report, we have selected subject matters of greater significance for inclusion so as to give you a comprehensive snapshot of our CSR initiatives and activities. To complement the printed report, we have posted on our website additional reports that discuss our CSR activities outside Japan and provide more detailed information and statistics. We hope that you find the printed and online reports informative and we also appreciate your feedback and comments.

Thank you.