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JOGMEC provides equity financing to INPEX
for an exploration project offshore Indonesia

November 21, 2011

 Japan Oil, Gas and Metals National Corporation ("JOGMEC", President: Hirobumi Kawano) decided to provide equity capital finance to INPEX Banda Sea Ltd., a subsidiary of INPEX CORPORATION ("INPEX", President: Mr. Toshiaki Kitamura), for an exploration project in the Babar Selaru Block (the "Block") located offshore East Indonesia.
 
 The operating 100% interest of the Block has been awarded to INPEX Banda Sea Ltd., a subsidiary of INPEX, as a result of a joint study conducted by JOGMEC, INPEX and Indonesian authorities within the framework of JOGMEC's Cooperative Overseas Surveys and Studies Program ("Cooperative Program"). 
 
 The Cooperative Program, launched in 2007 as a new approach of the overseas surveys and studies, is JOGMEC-led study based upon a proposal offered by a Japanese upstream company and drawn from the company's expertise and knowledge, envisaging that it may pave the way for acquisition of exploration interests. The Cooperative Program in Indonesia proposed by INPEX is the first case of its kind, consisting of a two-dimensional seismic survey and other exploratory studies conducted from 2009 through 2010 in the prospective area in Banda Outer Arc offshore East Indonesia. Based on the findings of this joint study, the Indonesian Government designated and offered the "Babar Selaru Block" as one of the open bidding blocks in the Indonesian First Bidding Round 2011, to which JOGMEC and INPEX were entitled to submit a privileged "Direct Offer" and have done so. 
 
 It is a significant achievement and outcome of JOGMEC activities that the first Cooperative Program has immediately contributed to the acquisition of exploration acreage, where, furthermore, JOGMEC continues to be involved through its equity financing. JOGMEC will provide equity capital covering up to 75% of the exploration expenditures incurred by INPEX Banda Sea Ltd. 
 
 Being located 60km northwest of the Abadi gas field in the Masela Block, where another JOGMEC-assisted INPEX subsidiary is engaged in developing as the operator with a 60% participating interest, the Block is also expected to be a promising area of oil and gas discovery. 
 While INPEX continues to expand its exploration and development activities in Indonesia as one of its core business areas, JOGMEC's support will further enhance INPEX's upstream activities in Indonesia and will reinforce Japan's energy security when successful.
Supplemental Remarks

Project profile

1)Corporate Data
Company Name INPEX Banda Sea Ltd.
Date of Establishment September 27, 2011
President Mr. Toshiaki Kitamura
Shareholders INPEX CORPORATION(Voting right: more than 51%)/ Japan Oil, Gas and Metals National Corporation (Voting right: less than 49%)

2)Block (see attached map)
  Babar Selaru Block, in Banda Outer Arc offshore East Indonesia
3)Participating Interest
Participants  Participatinginterest
INPEX Banda Sea Ltd.(Operator)  100.0%

Adoption as an eligible project for equity financing

1)Adoption date: October 6, 2011
2)Estimated amount of equity financing(2011-2017): Approx. JPY 16.1 billion

Reasons for adoption

  • Satisfying JOGMEC's technical, economical, political and business related criteria
  • Expected to increase the competitiveness of Japanese upstream industry
  • Eligible for 75% equity financing because of large expected reserve and operatorship

Attachment

Indonesia Babar Selaru Block

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