annual report 2010 - jogmec · metals technology center 9-3 furudate, kosakakozan, kosaka, akita...

Head OfficeMuza Kawasaki Central Tower

1310 Omiya-cho, Saiwai-ku, Kawasaki-city,

Kanagawa 212-8554 JAPAN

TEL : +81-44-520-8600 FAX :+81-44-520-8710

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

Chiba 261-0025, JAPAN

TEL : +81-43-276-9212 FAX : +81-43-276-4061

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

Lazona Kawasaki Plaza

West Exit

Nikko Hotel

JRKawasakiStation

KeikyuKawasakiStation

MuzaKawasakiCentralTower

Tokyo

Yokohama

JAPEX ResearchCenter

JOGMECJOGMEC TRC

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

KawasakiStationBuilding

Rel i able Par tnersh ip

Year ended 31 March 2010

2010AnnualReport

1JOGMEC Annual Report 2010■

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, 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

99.6Crude Oil

96.0Natural Gas

100Copper

100Zinc

■　■ Imports　■ Domestic production

Japan’s reliance on overseas sources of oil, natural gas, and mineral resources (2009)

　


Domestic Network

Offi ce Address TEL FAX

Tomakomai Site Management Offi ce 308 Aza-Shizukawa, Tomakomai-shi, Hokkaido 059-1363 Japan 0144-56-2466 0144-56-1513

Mutsu-Ogawara Site Management Offi ce 525-2 Aza-Futamata, Oaza-Obuchi, Rokkasho-mura Kamikita-gun, Aomori 039-3212 Japan 0175-73-3611 0175-73-3612

Akita Site Management Offi ce 219 Aza-Ashizawa, Funakawa, Funakawa Minato, Oga-shi, Akita 010-0511 Japan 0185-24-6121 0185-24-4555

Kuji Site Management Offi ce 8-105-2 Heinokuchi, Natsui-cho, Kuji-shi, Iwate 028-0001 Japan 0194-52-2215 0194-52-2216Fukui Site Management Offi ce 1 Aza-Rinkai, 38 Ishishinbo-cho, Fukui-shi, Fukui 910-3133 Japan 0776-85-1229 0776-85-1220Kikuma Site Management Offi ce 4642-1 Tane, Kikuma-cho, Imabari-shi, Ehime 799-2302 Japan 0898-54-2929 0898-54-2928

Shirashima Site Management Offi ce 1-108 Hibiki-machi, Wakamatsu-ku, Kitakyushu-shi, Fukuoka 808-0021 Japan 093-761-1411 093-761-1454

Kamigotou Site Management Offi ce 818-411 Aza-Orishima, Tsuzukihamanouragou, Shinkamigoto-cho, Minamimatsuura-gun, Nagasaki 857-4415 Japan 0959-52-4610 0959-52-4617

Kushikino Site Management Offi ce 1 Seisatsu-cho, Ichikikushikino-shi, Kagoshima 896-0046 Japan 0996-33-1182 0996-33-1189

Shibushi Site Management Offi ce 5024-1 Aza-Shinsuzaki, Kawahigashi, Higashi-Kushira-cho, Kimotsuki-gun, Kagoshima 893-1615 Japan 0994-63-6993 0994-63-6905

Kamisu Site Management Offi ce 6225-40 Okunoya, Kamisu-shi, Ibaraki 314-0116 Japan 0299-97-3020 0299-97-3021Nanao Site Management Offi ce 165-1 Mimuro-machi, Nanao-shi, Ishikawa 926-0007 Japan 0767-58-8787 0767-58-8789Kurashiki Project Management Offi ce 6-6-5 Minamise, Kurashiki-shi, Okayama 712-8055 Japan 086-450-3931 086-450-3932Namikata Project Management Offi ce 600 Ko, Miyazaki, Namikata-cho, Imabari-shi, Ehime 799-2104 Japan 0898-36-4051 0898-36-4061

Fukushima Site Management Offi ce 58-2 Shiohamamen, Fukushima-cho, Matsuura-shi, Nagasaki 848-0403 Japan 0955-41-3030 0955-41-3033

Hokkaido Mine Pollution Control Project Support Offi ce 30-31 Umemoto-cho, Date-shi, Hokkaido 052-0022 Japan 0412-25-1113 0142-23-1259

Tohoku Mine Pollution Control Project Support Offi ce 2-5-17 Matsunami, Yamagata-shi, Yamagata 990-0023 Japan 023-626-4631 023-626-4632

Chugoku-Kinki Mine Pollution Control Project Support Offi ce

1310 Omiya-cho, Saiwai-ku, Kawasaki-shi, Kanagawa 212-8554 Japan 044-520-8640 044-520-8730

Kyushu Mine Pollution Control Project Support Offi ce 1-5 Tashima Hon-machi, Hita-shi, Oita 877-0026 Japan 0973-27-6140 0973-27-6141

Kashiwazaki Test Field Offi ce 690 Oaza-Hirai, Kashiwazaki-shi, Niigata 945-1353 Japan 0257-21-5420 0257-21-5443Matsuo Mine Pollution Control Project Support Offi ce 1-3-1 Kashiwadai, Hachimantai-shi, Iwate 028-7303 Japan 0195-78-3156 0195-78-3076

Metals Technology Center 9-3 Furudate, Kosakakozan, Kosaka, Akita 017-0202 Japan 0186-29-3829 0186-29-3849

Head Office　Technology & Research Center (TRC)

● Oil Stockpile Site Management Office　● LPG Stockpile Site Management Office or Project Site Management Office 　● Kashiwazaki Test Field Office　 ◆ Mine Pollution Control Project Support Office　 ■ Metals Technology Center

Mutsu-OgawaraSite Management Office

Tomakomai Site Management Office

Shirashima Site Management OfficeFukui Site Management Office

Kamigotou Site Management Office

Akita Site Management Office

Shibushi Site Management OfficeKushikino Site Management Office

Kuji Site Management Office

Kikuma Site Management Office

Nanao Site Management Office

Fukushima Site Management Office

Kamisu Site Management Office

Namikata Project Management OfficeKurashiki Project Management Office

Hokkaido Mine Pollution Control Project Support Office

Tohoku Mine PollutionControl Project Support Office

Kyushu Mine Pollution Control Project Support Office

Kashiwazaki Test Field Office

Metals Technology Center

Matsuo Mine Pollution ControlProject Support Office

Head OfficeChugoku-Kinki Mine Pollution Control

Project Support Office

Technology & Research Center (TRC)

Message from the President ................................. 2 JOGMEC’s Activities ............................................ 4 Oil and Gas Upstream Investment and Research & Development .............................. 6

Metals Strategy, Exploration, and Technology Development ...................................................... 12

Stockpiling ......................................................... 18 Mine Pollution Control ........................................ 22 Financial Review

　General Overview ........................................... 26 　Balance Sheet ................................................ 28 　Statement of Operations ................................. 30 　Statement of Cash Flows ................................ 31 　Notes to Financial Statements March 31, 2010 ... 32 　Report of Independent Auditors ..................... 36

Overview of JOGMEC ........................................ 37 Offi cer ................................................................ 38 Organization Structure ....................................... 39 Worldwide Network ............................................ 40 Domestic Network .............................................. 41

INDEX

2 ■ Annual Report 2010 JOGMEC

companies, we decided to newly invest in seven companies and provide liability guarantees for three development projects. In addition, production started in two existing JOGMEC-supported projects (involving a total of four companies) in Brazil and Indonesia.

JOGMEC conducts geological survey at three licensed blocks in Eastern Siberia, which two new licensed blocks added in 2009. The fi rst exploratory drilling well started in June 2009. In December 2009, the construction of the first phase of the East Siberia-Pacific Ocean pipeline was completed, and Eastern Siberian oil has reached to the Asia-Pacific market, and Japanese companies have started to import it. The role of Eastern Siberia is becoming important as new supply source.

In technology development, JOGMEC and Abu Dhabi National Oil Company (ADNOC) have commenced a CO2EOR (Enhanced oil Recovery) study in the oil field offshore Abu Dhabi. The joint study will seek for commercialization of CO2EOR in an optimum manner. In addition, the Gas to Liquid (GTL) demonstration plant in Niigata started operation. In our methane hydrate project, which advanced to Phase II, we are considering the possibility of conducting a long-term production test and an offshore production test, and are also conducting a detailed study on methane hydrate concentrated zone in waters surrounding Japan. The 3D seismic vessel Shigen, whose management and operation has been consigned to JOGMEC by the Ministry of Economy, Trade and Industry, conducted surveys in fi ve areas and processed and analyzed the data obtained.

In the metallic mineral resources sector, the provision of financial support in the form of equity capital and liability guarantees for projects involving high risk grew significantly in fiscal 2009. JOGMEC provided support for active investment in exploration and development by Japanese companies, with both the number and the value of projects adopted by JOGMEC rising to a record high. Those projects included development projects in Chile and Canada, for which JOGMEC will provide its first liability guarantee in the metals sector, and an exploration project in the Solomon Islands for which it will provide its fi rst equity fi nance in that sector. Moreover, to secure interests for rare metals and rare earth resources, JOGMEC strived to strengthen relationships with Bolivia, Southern African countries, Vietnam and Central Asian countries. With regard to geological surveys, it is also conducting joint venture exploration projects with foreign companies in 46 regions in 17 countries, including two

I would like to use the release of the 2010 Annual Report, which outlines JOGMEC’s operations in fiscal 2009, as an opportunity to extend our sincere gratitude to all of you.

After the global financial crisis that broke out in 2008, crude oil prices temporarily dropped to US$30 to $40/barrel range and prices of mineral resources declined by around 30% to 70%. However, in fi scal 2009, prices of oil and mineral resources rose across the board. In 2010, crude oil prices rebounded to the US$70 to $80/barrel range, the level seen immediately before the price surge that started in 2007, while among mineral resources, copper prices rose back above US$7,000 to $8,000 /ton, almost equal to the level immediately before the price surge.

I t is recognized that in the long term, pr ice of resources and energy prices tend to rise due to several complex factors such as a steady increase in demand, technical difficulty in E&P business, and increasing financial needs. As a result, competition to secure resources is intensifying. Moreover, the international situation surrounding resources and energy is changing more rapidly and drastically than ever due to the growing uncertainty over increasing geopolitical risk, emerging resource nationalism, and the inflow of speculative money into the commodity market.

In fiscal 2009, JOGMEC conducted various activities that contributed to the stable supply of resources and energy to Japan, based on a full recognition of this situation.

Japanese companies acquired development interests in Venezuela and Iraq, major oil-producing countries with which Japan has strived to build and strengthen relationships in order to achieve the government’s goal to raise the ratio of crude oil in which Japanese companies have rights and interests to the entire imports of crude oil to Japan to around 40% by 2030. In Venezuela, JOGMEC decided to provide equity capital to a Japanese company which will participate in an extra heavy oil development project of the Orinoco Oil Belt. In addition, under the Joint Study Agreement signed between JOGMEC and Petróleos de Venezuela S.A. (PDVSA), Venezuela’s state-run oil company, the two parties are conducting a joint study on the development of heavy oil in the Orinoco River area. In Iraq, a Japanese company, together with an overseas state-run oil company, won the right to develop an oil fi eld in Iraq’s international bidding for oil development held for the fi rst time in 40 years.

To support E&P projects implemented by Japanese

Message from the President


projects for which the mineral interests were transferred to Japanese companies. Those exploration projects also include projects in Southern Africa aimed mainly at platinum group metals, which were launched in relation to the activities of the JOGMEC Botswana Geologic Remote Sensing Center.

JOGMEC has been conducting marine resources surveys on submarine hydrothermal deposits and cobalt-rich crusts based on the Basic Plan on Ocean Policy. As the successor to 29-year-old Hakureimaru II, JOGMEC signed a contract in January 2010 to construct a new marine resource research vessel, and is implementing procedures for i ts procurement. JOGMEC is also developing production technology that will support exploration and development activities by Japanese companies and technology to recycle rare metals.

For natural resource stockpiling, JOGMEC introduced a general competitive bidding system for the operation of all 10 national petroleum stockpiling bases and signed subcontracting agreements with the winning bidders as part of its cost-reduction efforts. JOGMEC also contributed to the enhancement of Japan’s stockpiling functions by starting such new operations as oil product stockpiling and support for joint stockpiling with the U.A.E. In addition, JOGMEC actively involved itself in the plan to establish a petroleum stockpiling system in Asia under the framework of ASEAN + 3, through activities such as hosting the third meeting of a working group on the formulation of a roadmap for individual countries, which was held in Sapporo. At the underground LPG stockpiling bases in Namikata and Kurashiki, whose construction schedule was extended in fiscal 2008, JOGMEC is steadily proceeding with construction work based on the revised construction plan.

As for national stockpiles of rare metals, JOGMEC increased its stocks effi ciently.

In mine pollution control, we are proud of having contributed to the steady progress in measures taken in Japan through such achievements as completing the work on mine pollution control in Akita Prefecture that had continued for 38 years and operating the new neutralization and treatment facility at the abandoned Matsuo Mine without incident for 10,000 consecutive days . JOGMEC i s a l so devo t i ng e f fo r t s t o t he development of passive treatment and other technologies that will reduce the cost of mine pollution control. JOGMEC is also expanding its activities related to the dissemination of information concerning mine pollution control technologies and systems to resource-producing

countries; for example, it started a program to dispatch experts to the Peruvian government.

Regarding the enhancement of JOGMEC’s function of supporting the acquisition of mineral interests, necessary measures were incorporated into the Act on modifi cation of the Act on the Japan Oil, Gas and Metals National Corporation, Incorporated Administrative Agency, which came into effect on July 1, 2010. In severe competition to acquire oil, natural gas and mineral resources, we JOGMEC is strongly expected to assume the role of stabilization for energy security by Japanese people. To meet these expectations, by the end of fiscal 2010, JOGMEC plans to adopt projects related to our new functions that were added as a result of the modeifi cation of the abovementioned law, such as providing equity capital for asset acquisitions concerning rare metals and other metallic mineral resources, and using government-guaranteed loans to finance projects. Moreover, to secure the supply of resources and energy, JOGMEC will step up efforts to support E&P projects, and will make a steady and efficient effort with regard to the stockpiling of resources and mine pollution control, all the while reinforcing cooperation with the relevant parties following the transfer of the headquarters function to Tokyo, which resulted from the same legal revision. JOGMEC appreciates the continued understanding and cooperation of the Japanese people.

November 2010


JOGMEC’s Activities

Oil and Gas Upstream Investment and Research & Development

・Multi-faceted approach to oil-producing countries Conducting joint operations with oil and gas producing countries and training

overseas technical experts・Provision of fi nancial assistance Providing equity capital and liability guarantees for exploration and

development・Geological and geophysical surveys Conducting geological and geophysical surveys as a basis for exploration

and production projects・Collection, analysis, and provision of 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 training of

engineers Demonstrating the results of JOGMEC’s activities

at international exhibition and implementing collaborative projects with universities

Metals Strategy, Exploration, and Technology Development

・Multi-faceted approach to metal resource-rich countries Conducting joint operations with metal resource-rich countries, exchanging

information with them, and disseminating information to them・Provision of fi nancial assistance to Japanese companies Providing equity capital and loans for metal resource exploration by Japanese

companies and providing liability guarantees for mine development by Japanese companies・Geological surveys Conducting geological surveys to help the Japanese companies secure

mineral resource interests and to support their exploration projects; also conducting marine resource surveys・Collecting, analyzing, and providing information,

and developing human resources Collecting, analyzing and providing information

relating to metal mining and developing human resources related to metal resource development・Technological development Developing exploration techniques and

production and recycling technologies

Stockpiling・Safe and effi cient management of national petroleum stockpiling Keeping national stockpiles of crude oil under integrated management,

providing support to private-sector stockpiling, and engaging in international cooperation・Steady promotion of LPG stockpiling Keeping national LPG stockpiles under integrated

management and constructing rock cavern underground stockpiling bases・Stockpiling of rare metals and trend surveys

Mine Pollution Control・Providing technical support to entities

implementing mine pollution control projects, conducting technology development, and providing information and extending fi nancial support to private companies・Sharing information with resource-producing

countries



● Obtained the qualifi cation to participate in the second round of international bidding for interests in Iraqi oil fi elds (April)

● Signed a memorandum of understanding (MOU) on comprehensive cooperation and a contract for a joint study on the development of heavy oil in the Orinoco River area with Petróleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned oil company (April)

● Completed the construction of a Gas to Liquid demonstration plant (April) and started a demonstration test● Decided to provide equity capital to six exploration companies and provide liability guarantees for three

projects (April 2009 through March 2010)● Signed an agreement on joint exploration of two new licensed blocks in Eastern Siberia (May) and started

exploration activity (June)● Production started in JOGMEC-supported projects in Brazil (June) and Indonesia (July)● 3D seismic vessel Shigen completed surveys in 5 areas starting with Sanriku coast northwest sea area

(April-July)● Signed a contract on a joint study on CO2 EOR with Abu Dhabi National Oil Company (ADNOC) (October)● Preparations for a drill stem test for the fi rst exploratory drilling well in Eastern Siberia started (February

2010) after the planned depth was reached● Decided to provide equity capital for asset acquisition by a Japanese company which will participate in an

extra heavy oil development project in Venezuela (March 2010)

Metals Strategy, Exploration and Technology Development

● Drilling surveys revealed additional copper/gold-mineralized zones in the Frontera region in Algentina (May)● Proposed joint development of lithium resources in Uyuni Salt Lake in Bolivia (June). Held an economic

development seminar in Bolivia (February 2010)● Signed an MOU on cooperation in the fi eld of Mineral Resources with the Republic of Zambia (July)● Provided loans for a total of 10 private-sector exploration projects, including a nickel and platinum group

metal exploration project in the USA (July)● Decided to provide liability guarantees for two mine development projects involving Japanese companies,

including a copper mine development project in Chile (September)● JOGMEC, a Japanese company, and Kazatomprom, Kazakhstan’s state-run nuclear power company,

signed an MOU on the recovery of rare earths (October)● Signed an MOU on cooperation in the fi eld of Mineral Resources with Mozambique (December)● Transferred interests for zinc exploration project in Peru to an overseas subsidiary of a Japanese company

(December)● Signed a contract for the construction of a new marine resource research vessel in January 2010, which

would be the successor to Hakureimaru II● Provided equity for private-sector exploration of nickel and cobalt in the Solomon Islands (March 2010)

Stockpiling ● Supported the government’s sale of approximately 440,000 KL of middle oil and special crude oil (April, June, July, and December 2009 and March 2010)

● Strengthened the stockpiling system by procuring and transferring to the government approximately 50,000 KL of light crude oil (November)

● Strengthened the emergency release capability by transporting approximately 730,000 KL of crude oil reserves from some stockpiling bases to others (April through November)

● Built up additional reserves of rare metals, including reserves of rare metals that had not previously been stockpiled (June 2009 through March 2010)

● Procured and transferred 130,000 KL of heating oil (October) to the government, marking the start of national stockpiling of heating oil, based on the government’s decision (July) to start stockpiling of oil products

● Supported the government’s joint stockpiling program with the U.A.E. at the Kiire stockpiling base by providing a subsidy upon the launch of the program (November)

● JOGMEC, as a joint secretariat to support the ASEAN Center for Energy, held a working group meeting on the formulation of a roadmap for individual countries in order to prepare for the establishment of a petroleum stockpiling system in Asia under the framework of ASEAN + 3 (June 2009 and January 2010)

● Conducted general competitive bidding for the operation of national petroleum stockpiling bases (January 2010) and signed subcontracting agreements with the winning bidders (February 2010)

Mine Pollution Control

● Dispatched a mine pollution control policy adviser (from April) and a mine pollution control technical adviser (February and March 2010) to the Peruvian government and held seminars for resource-production countries on mine pollution control in Bolivia (July) and Peru (November)

● Operated Matsuo Neutralization Plant without incident for 10,000 consecutive days after the start of its operation (August)

● Built a demonstration test facility for passive treatment and started monitoring of the operation of the facility (September)

Highlights of the Fiscal Year ended 31 March 2010

Chapter 1

JOGMEC Annual Report 2010


In order to promote Japan’s energy security,

JOGMEC supports the Japanese government

to strengthen relations with oil and gas

producing countries and Japanese companies

conducting oil and gas expas explorat ion and

production by making the most of our own

functions.

Visiting joint exploration blocks with INK in Irkutsk Oblast, Eastern Siberia

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E

xploration, and Technolog

y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

■ Building and strengthening relations with oil and gas producing countries

JOGMEC has been working to build and strengthen relations with oil and gas producing countries and to contribute to ensure a stable supply of energy resources to Japan. JOGMEC conducts collaborative technical studies and joint technology development projects as well as providing hands-on training in exploration, development, and production engineering. JOGMEC also takes advantage of its unique position as a government agency with high technology capabilities to create opportunities for bilateral and multilateral exchanges with oil and gas producing countries. Moreover, we are striving to strengthen the presence of JOGMEC and Japanese companies by aggressively participating in international conferences and international oil and gas exhibitions.

■ Providing financial assistance for exploration and production by Japanese companies

The presence of oil and gas fields developed by Japanese companies is critical for Japan to ensure a stable supply of energy resources. Oil and gas exploration and development requires a large-scale investment over extensive periods of time, with E&P project involving extremely high risks. Consequently, diversifi ed investment in a variety of projects is necessary for oil and gas business to be successful. Since investment in such high-risk operations imposes a significant burden on companies, JOGMEC supports them by providing fi nancial assistance.

JOGMEC provides equity capital up to 75% of the total project cost to Japanese companies and provides liability guarantees for projects. Equity capital is provided for exploration and asset acquisition related to oil and gas and gas liquefaction projects. Liability guarantees are provided for oil and gas development and gas liquefaction projects.

■ Collection, analysis, and provision of 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-producing countries, information on newly opened exploration areas, and the activities of international oil companies, and shares the results of the survey and analysis with private companies and other relevant entities. JOGMEC is also expanding the human network of researchers and research institutions in Japan and overseas, endeavoring to supply timely information to a wide range of parties, including the Japanese private sector, the government, and other relevant institutions.

■ Contributions in the field of technology

JOGMEC provides technical support for the activities of oil exploration and production companies in Japan. The JOGMEC Technology & Research Center (TRC) in Makuhari, Chiba, conducts a broad range of activities, 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; surveys of domestic oil and gas resources; and joint research with oil and gas producing nations.

■JOGMEC’s Oil & Gas Exploration and Development Support

Support Detail

Technical Assistance

Intelligence

Financial Assistance

Subsidies forAcquiring Petroleum Rights

Equity Capital forExploration

Liability Guarantee

Equity Capital for natural gas liquefactionand Asset Acquisition

Collection, Analysis andProvision of Information

Overseas Geological& Geophysical Surveys

Technical Development/Technical Support

Preparatory stage Exploration stage Development stage Production stage

Areastrategy

Preliminarystudies Negotiation

Geological &Geophysical

surveyDrilling Feasibility

studyProduction well

drillingFacility

construction

Negotiation forextending

petroleum rightsProductionoperation

Geophysical survey

LNG Vessel

JOGMEC’s oil & gas explorationand development support



Fiscal 2009 Achievements

■ Multi-faceted approach to oil-producing countries

Iraq and VenezuelaAcquiring interests in large-scale oil fi elds in the Middle

East and in other regions is essential to Japan to secure resources developed by Japanese companies. In recent years, JOGMEC has strategically pursued business opportunities in Iraq and Venezuela in cooperation with the Ministry of Economy, Trade and Industry. In Iraq, where JOGMEC made itself ready to support Japanese companies by obtaining the qualification to participate in the second round of international bidding, a Japanese company obtained the right of oil development in the bidding in December 2009. In the future, JOGMEC will provide the necessary support.

In Venezuela, a Japanese company was selected through international bidding in February 2010 as a member of a project to develop extra heavy oil in Carabobo. JOGMEC decided to provide equity for asset acquisition in relation to this project in March 2010. Also in Venezuela, JOGMEC, two Japanese private companies, and the state-run Petróleos de Venezuela S.A. (PDVSA) are conducting a joint study on the reserve assessment and development assessment in Junin Block 11 of the Orinoco River area, based on an MOU on comprehensive cooperation and a contract for a joint study on the development of heavy oil in that block that were signed with PDVSA in April 2009.

■ MOU signing:with Venezuela’s Minister of Energy and Petroleum who doubles as President of PDVSA (April 2009)

Cooperation with overseas oil companiesIn the U.A.E., where the most Japanese companies oil

development interests lies, JOGMEC signed a contract on the implementation of a joint study on CO2EOR to be applied to a huge offshore oil fi eld now in operation with the company that operates the fi eld, as Abu Dhabi National Oil Company (ADNOC) highly values JOGMEC’s technologies and past achievements, and the study has already begun.

In addition, JOGMEC created five new frameworks for cooperation, including the above-mentioned MOU with PDVSA of Venezuela.

Training of overseas technical expertsSince 1989, JOGMEC has accepted over 2,000 exparts

as trainees from 44 countries, and its training programs have been highly valued by trainees and the countries that send them. In fiscal 2009, 35 experts from 20 countries participated in two training courses on geophysical exploration and drilling management. JOGMEC also accepted 59 Iraqi experts as trainees as the first-year activity of a project to train 500 Iraqi experts based on an agreement between the Japanese and Iraqi governments. In addition, JOGMEC also provides practical training for Iraqi experts through a joint study on oil fields in Iraq. Although the direct objective of these training programs is to transfer technology, organizational and personnel exchanges through the programs are expected to contribute to smooth implementation of joint projects in the future between Japan and oil-producing countries.

■ Training in drilling management

Expansion of opportunities for exchanges with oil and gas producing countries

Listed below are some examples of international exchange conducted by JOGMEC in fiscal 2009 to strengthen the relationship between Japan and oil and gas producing countries by holding and participating in forums and international conferences as well as inviting and dispatching high-level officials. At a Japan-Saudi Arabia industrial investment promotion taskforce meeting, two Japanese companies decided to invest in a project in Saudi Arabia.・Conducted a detailed survey on investment environment

(five surveys) and dispatched missions (29 missions) related to a Japan-Saudi Arabia industrial investment promotion taskforce meeting

・Participated in nine international exhibitions as exhibitors ・Held meetings with cabinet members and senior offi cials

of state-run and international oil companies

■ Supporting oil and gas exploration and development projects conducted by Japanese companies by providing equity capital and liability guarantees

In fiscal 2009, JOGMEC decided to provide equity capital for seven projects, including new exploration projects involving Idemitsu E&P Shetland Ltd., Nippon Oil Explorat ion (Niugini) Pty Ltd., MPDC NGUMA LIMITED, INPEX Northeast Offshore Brazil, Ltd., Nippon

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

Oil Exploration (Cuu Long) Ltd. and CIECO E&P (Faroe) Limited, and for asset acquisition by Japan Carabobo Ltd.

JOGMEC also decided to provide liability guarantees for three projects involving Norske AEDC AS, Nippon Papua New Guinea LNG LLC and Sakhalin Oil and Gas Development Co.Ltd. As a result, as of the end of March 2010, the outstanding equity balance stood at 68.8 billion yen and the outstanding liability guarantee balance at 244.5 billion yen. In fi scal 2009, production started in two JOGMEC-supported projects, the Frade oil field project in Brazil (INPEX Offshore North Campos, Ltd.) and the Tangguh LNG Project in Indonesia (Nippon Oil Exploration (Berau) Ltd., KG Berau Petroleum Ltd. and KG Wiriagar Petroleum Ltd.).

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

0

20

40

num

ber

of p

roje

ctco

mpa

nies

04FY 05FY 06FY 07FY 08FY 09FY0

200

400

600

800

hund

red

mill

ion

yen

442 450500

567669 688

10 10 1014

2023

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

0

1,000

2,000

3,000

4,000

hund

red

mill

ion

yen

0

20

40

num

ber

of p

roje

ctco

mpa

nies

04FY 05FY 06FY 07FY 08FY 09FY

2,4452,146

2,866

3,504

2,650

9913 11

1515

2,370

■ Geological and geophysical surveys

In order to support Japanese companies to acquire oil and gas upstream interests in the future, JOGMEC conducts geological and geophysical surveys in the initial stage of oil and gas exploration.

Eastern SiberiaAs JOGMEC and Irkutsk Oil Company (INK: Irkutskaya

Neftyanaya Kompaniya) of Russia started joint exploratory surveys in two additional licensed blocks, Bolshetirsky Block and Zapadno-Yaraktinsky Block,they are now operating jointly in a total of three licensed blocks, The contract on joint operation in the additional licensed blocks was signed when Russian Prime Minister Vladimir Putin visited Japan in May 2009. In the original licensed block, the Severo-Mogdinsky Block, drilling of the fi rst exploratory drilling well started in June 2009. In addition, preparations are under way for drilling of a second exploratory drilling well in the original licensed block and the fi rst exploratory

drilling wells in the two additional licensed blocks. In relation to inter-governmental consultation between Japan and Russia, JOGMEC contributes to establishing and developing cooperative relations between the two countries by supporting cooperative projects as a secretariat, based on the framework agreement between the Agency of Natural Resources and Energy of Japan and the Russian state-run companies Gazprom and Rosneft.

■ The first exploratory drilling well in the Severo-Mogdinsky Block

Against the backdrop of Japan’s efforts to strengthen relations with Russia, the construction of the East Siberia-Pacific Ocean pipeline is steadily proceeding. The first phase of this pipeline was completed in December 2009, and shipments of crude oil to East Asia via the pipeline began. The second phase, which connects the pipeline to an oil-loading port in Kozmino began in January 2010. The presence of Eastern Siberia as a new energy supply source for East Asia, including Japan, is growing.

Offshore of Greenland (Kanumas area)The government of Greenland is scheduled to invite

bids for interests in exploration areas in 2013. JOGMEC took over the right to participate in the pre-round bidding that precedes the ordinary round from the former Japan National Oil Corporation and holds it as a member of the Kanumas group, which also comprises Royal Dutch Shell, Exxon Mobil, BP, Chevron, Statoil and Nunaoil. In fi scal 2009, JOGMEC, together with other Kanumas group members, conducted surveys to obtain various data necessary for the exploration and development of the Kanumas sea areas. It also started a joint study with some Japanese companies with a view to acquiring interests in promising exploration areas in the pre-round bidding.

Operation of a 3D seismic vesselJOGMEC is commissioned by the Ministry of Economy,

Trade and Industry to survey the occurrence of oil and natural gas resources in the sea areas surrounding Japan, using Shigen, a 3D seismic vessel. In fi scal 2009, JOGMEC surveyed fi ve sea areas - an area off Sanriku, an area off



Joban, the waters south of Yaeyama, the southern part of the waters off Miyazaki, and the southwestern part of the waters off Tsushima - and processed and analyzed the data obtained.

One of the purposes of this project is to improve technology and accumulate know-how on offshore oil and natural gas exploration using 3D geophysics through the management and operation of the Shigen.

■ 3D seismic vessel Shigen

■ Collection, analysis, and provision of information

Dissemination of analysis results through briefings and printed publications*

Through monthly briefings and bimonthly publications of the specialty journal Oil and Gas Review, JOGMEC provides information periodically to related industries and government authorities in charge of energy policy. The following are examples of analysis reports published in fi scal 2009.・ Iraq Moving toward Full-Fledged Oil Development・ Venezuela’s Oil Diplomacy and Orinoco・ Prospects for the Sakhalin-Khabarovsk-Vladivostok

Pipeline In addition to the above periodical dissemination of

information, in fiscal 2009, JOGMEC held the following conferences to report on its achievements and attracted many participants.* Briefi ng materials and reports are posted on JOGMEC’s website

(www.jogmec.go.jp) (most materials are available only in Japanese)

Information analysis and reporting for companiesJOGMEC conducts studies on themes in which

Japanese companies have keen interest from the perspective of business strategy and holds briefing sessions for them. The following briefing sessions were held in fi scal 2009:・ Impact of LNG Projects in Australia and Unconventional

Gas Development on LNG Supply and Demand・ Survey on Tax and Legal Frameworks Assuming

Business Opportunity in Iraq・ Study on the Safety of Floating LNG Facilities

Priority area committeesJOGMEC has established committees consisting of

experts, local business professionals, etc. to conduct regional analyses in priority areas for oil and gas exploration and development, contributing to the formation of networks between regional experts. The following committees held meetings in fi scal 2009:・ Middle East Committee・ Central and South America Committee・ Russia and Central Asia Committee・ Workshop to study strategy for ultra-deep ocean oil and

gas fi eld development

■ Technological development

Based on national energy policy and business needs, JOGMEC is promoting technological development and joint studies with oil and gas producing countries with a view to further strengthening its relationship with them in six priority areas of activity: maximizing oil recovery, oil and gas reservoir characterization, well drilling and field development, unconventional hydrocarbon exploitation, oil and gas utilization, and environment-conscious oil and gas exploitation.

Gas-to-liquid (GTL) technologyJOGMEC and the Japan GTL Technology Research

Associat ion are jo int ly conduct ing technological development with a view to putting GTL technology into practice. The association consists of six Japanese companies: INPEX Corporation, Nippon Oil Corporation (present ly JX Nippon Oi l & Energy Corporat ion), Japan Petroleum Exploration Co., Ltd., Cosmo Oil Co., Ltd., Nippon Steel Engineering Co., Ltd., and Chiyoda Corporation. GTL technology has already been successfully commercialized by three companies: Sasol and Petro SA, both of South Africa, and Royal Dutch Shell. JOGMEC and the association, however, are promoting the so-called JAPAN-GTL process, which is the fi rst ever GTL technology capable of using natural gas containing carbon dioxide.

I n f i sca l 2009 , JOGMEC s ta r ted opera t i ng a demonstration plant with an output of 500 barrels per day to verify the GTL technology in preparation for practical application. Feasibility studies began in Thailand and Vietnam in fi scal 2007 with a view to commercializing the JAPAN-GTL technology following the completion of the demonstration test. In addition, Russia, Venezuela, and Australia are showing keen interest in the JAPAN-GTL technology. Feasibility studies on GTL commercialization began in Russia in 2009.

Methane hydrate survey and technological developmentJapan’s research and development on methane hydrate

has been proceeding according with “Japan’s Methane Hydrate R&D Program, which was formulated by the Ministry of Economy, Trade and Industry in 2001. As Phase I, which continued until fi scal 2008, achieved satisfactory results, the program advanced in fi scal 2009 to Phase II,

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

in which JOGMEC and the National Institute of Advanced Industrial Science and Technology are jointly responsible for implementing the program.

In f iscal 2009, in preparat ion the f i rst offshore production test of methane hydrate in Japan, which is one of objectives of Phase II, we conducted a basic study on: the selection of a sea area for the test; reservoir characterization; well drilling plans; and environmental assessment. We also reviewed the distribution of methane hydrate resources and conducted detailed analysis.

The contents of “Japan’s Methane Hydrate R&D Program” are refl ected in the Plan for the Development of Marine Energy and Mineral Resources, based on the Basic Plan on Ocean Policy, which was decided by the Cabinet in March 2008.

Joint research on CO2EOR with oil-producing countries and technical support for field operations

CO2 enhanced oil recovery (CO2EOR)* is a major technology highly valued by oil-producing countries. In fi scal 2009, JOGMEC agreed with the Abu Dhabi National Oil Company (ADNOC) to commence a joint study of CO2EOR in a giant offshore oil field. The joint study will seek for commercialization of CO2EOR in an optimum manner. It is also discussing with NOC in Kuwait (or KPC: Kuwait Petroleum Corporation) about a new joint study. In addition, JOGMEC is preparing the small pilot test in offshore Viet Nam. This is the fi rst application to offshore oil fi eld in Southeast Asia.

Recently, CO2EOR has been attracting attention of its contribution to CCS (Carbon dioxide Capture and Storage). In fi scal 2009, JOGMEC conducted technical mapping of CCS-related technologies from the viewpoint of upstream sectors, the needs of oil-producing countries, and the past research records. Based on the mapping, JOGMEC focused on the future technological challenges and started research on CCS.

■Conceptual of CO2EOR

* Technology for increasing oil recovery by CO2 injection into oil reservoirs

■ Technology transfer and training

JOGMEC conducts various activit ies to train oi l development engineers in Japan and to promote exchanges among engineers.・ JOGMEC provided lectures on oi l development

technology at the University of Tokyo, Waseda University, Kyoto University, Chiba University and Kyushu University.

・ JOGMEC held JOGMEC-TRC Week 2009, the annual technology conference of JOGMEC Technology & Research Center (TRC), with a view to reporting on the technological achievements made by the TRC, providing experts with opportunity to exchange views and forming a network of engineers. The conference attracted a total attendance of 562 people from Japan and abroad, including high-level officials from the state-run oil companies of the U.A.E. and Vietnam.

・ JOGMEC earned royalties of 790 million yen in fiscal 2009 from TRC’s intellectual properties, which represent the fruits of its research.*

■ Patent Revenues

2.9 2.6

4.5

8.17.1

7.9

0

5

10

04FY 05FY 06FY 07FY 08FY 09FY

hund

red

mill

ion

yen

* 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 layer).

Chapter 2



JOGMEC provides support for the overseas

mining operations of Japanese companies in

various stages from exploration activities to

mining and smelting operations.

A drilling survey in the Frontera region in Argentina

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

■ Building and strengthening relations with resource- rich countries

JOGMEC suppor ts the government ’s resource diplomacy to bui ld and strengthen relat ions with resource- rich countries, and actively involves itself in resource diplomacy, too. JOGMEC strives to strengthen its presence by aggressively participating in international conferences and trade shows.

■ Providing financial assistance to support exploration and development by Japanese companies

JOGMEC provides equity capital/loans and liability guarantees for mine development to help Japanese companies develop metallic mineral resources.

■ Promoting private-sector exploration through initial JOGMEC exploration

In joint venture (JV) exploration projects with overseas organizations such as public mining companies and private companies in resource-rich countries, JOGMEC analyzes satellite images and conducts geological surveys and geophysical exploration. After identifying the presence of resources, JOGMEC transfers promising projects to Japanese companies.

JOGMEC also conducts geological surveys on its own in a region where Japanese companies have exploration rights and subsidizes such surveys to support Japanese companies’ overseas exploration activity.

In addition, to secure Japan’s interests relating to deep-sea mineral resources, JOGMEC conducts surveys using the Hakureimaru II, a deep-sea mineral resource exploration vessel. Specifically, JOGMEC conducts

surveys on submarine hydrothermal deposits and the occurrence of cobalt rich crust deposits in waters close to Japan based on the Basic Plan on Ocean Policy.

■ Collecting, analyzing, and provision of information

When Japanese companies engage in mining activities overseas, JOGMEC provides them with the information that they need. It collects and analyses information on geological conditions and ore deposits, as well as on the status of exploration, development, and production in other countries; individual countries’ mining policies and mining regulations; supply-and-demand trends relating to major metals; activities of overseas mining companies; and environmental problems relating to mining activities. It provides such information in a timely fashion to private-sector companies by means of periodicals, websites, and briefi ngs.

JOGMEC owns the Mineral Resources Information Center, the only specialist library concerning mineral resources in Japan. The library holds a collection of 60,000 items and books, which are open to the public.

■ Supporting the technological development most needed by the private sector and the government

From among the various production technologies used in deve lop ing meta l l ic minera l resources, JOGMEC selects the ones that are most important for the technological needs of Japanese companies and the policy needs of the government and develops them further. Specifically, JOGMEC is conducting research and development on metallurgical technologies that use bacteria and on technologies for recovering rare metals from used products.

■JOGMEC’s Metallic mineral resources Development Support

Preparatory stage & Basic exploration stage Exploration stage Development stage Production stage

Investmentenvironmental

evaluation

Geologicalpotential

evaluation

Geological &Geophysical Survey

Drilling

DrillingTunneling

Feasibilitystudy

Ore bodydevelopment

Production Plantconstruction Production

Technical Assistance

Intelligence

Financial Assistance

Subsidies for OverseasField Surveys

Equity Capital and Loansfor Exploration

Liability Guarantee

Collection, Analysis andProvision of Information

Overseas GeologicalSurvey

Joint Venture Exploration

Technical Development/Technical Support

Boring survey

JOGMEC’s metal resourcesdevelopment support

Satellite image analysis

Geological survey

Support Detail




■ Multi-faceted approach to resource-rich countries

Promoting joint projects with resource-rich countriesTo support Japanese companies aiming to secure

the supply of lithium, for which demand is expected to grow for use in electric car batteries, JOGMEC exercised initiative in proposing joint development of lithium to Bolivia, which has vast reserves of lithium in Uyuni Salt Lake, and an agreement was reached on the holding of regular consultations.

In relation to the activities of JOGMEC Botswana Geologic Remote Sensing Center, which was established to promote cooperation with the member countries of the Southern African Development Community (SDAC) and conduct rare metal exploration activities, JOGMEC signed MOUs with Zambia and Mozambique in fiscal 2009 on strengthening its relations with them in mineral resources.

In Vietnam, which is a minerals rich country with deposits of rare earths, JOGMEC identifi ed the promising regions through joint surveys with Vietnam based on an MOU signed in fiscal 2007, and provided related information to Japanese companies. In Kazakhstan, JOGMEC also signed an MOU with Kazatomprom, the country’s state-run nuclear power company, on the implementation of rare earth development, thereby establishing a framework for supporting Japanese companies advanc ing in to Kazakhstan on both technological and fi nancial fronts.

In addition, in March 2009, JOGMEC signed an MOU with BRGM, a French institute of geological research, on the sharing of data obtained through mineral resource exploration and market research and the exchange of opinions.

Exchange of information with resource-rich countries and dissemination of information

In fiscal 2009, JOGMEC and the Brazilian embassy in Japan co-hosted a “Metal Saloon,” which provides opportunity for industry and government offi cials of Japan and resource-rich countries to mingle with each other, attracting around 80 participants, including Japanese people involved in mining, as well as embassy offi cials of Brazil and other countries who are stationed in Tokyo. JOGMEC also participated in the following international conferences and held talks with the following high-level offi cials:.(Senior offi cials with which JOGMEC had meetings)

Canada’s Minister of Foreign Affairs and International Trade, Bolivia’s Minister of Mining and Metallurgy, Lao’s Minister of Planning and Investment, Tanzania’s Minister of Energy and Minerals, Zambia’s Minister of Finance and National Planning, Zambia’s Minister of Mines and Minerals Development, CEO of South Africa’s Council of Geoscience, President of VINACOMIN of Vietnam, President of COMIBOL of Bolivia, Chairman of BRGM of

France.

■ Providing financial assistance for exploration and development by Japanese companies

In fiscal 2009, JOGMEC decided to provide liability guarantees for development and provide equity for an exploration project in the metals sector for the first time ever. It provided a total of 11.9 billion yen for 10 exploration projects, and both figures were the largest annual numbers.

Liability guarantees for developmentJOGMEC decided to provide liability guarantees worth

a total of 22.7 billion yen for two large-scale projects - the development of the Esperanza copper mine in Chile and the development of the Gibraltar copper and molybdenum mine in Canada. As the Esperanza mine is expected to produce more than 200,000 tons of copper annually, its development is likely to signifi cantly contribute to a stable supply of copper concentrates to Japan.

■ Esperanza mine in Chile under development

Providing equity for explorationIn fiscal 2009, JOGMEC provided equity for a nickel

and cobalt exploration project in the Solomon Islands (with an equity ratio of 30% and an equity amount of 120 million yen), its fi rst equity fi nance in the metals sector. In addition to supporting fund-raising, JOGMEC’s equity finance, which represents the use of public funds, is expected to help to mitigate country risk.

Providing loans for overseas explorationJOGMEC provided loans for a total of nine exploration

projects, including an additional loan for the Caserones copper mine project in Chile, which will advance to the development stage based on a decision made in February 2010, and loans for projects in Peru (copper project), the USA (nickel and platinum group metals), the Solomon Islands (two nickel projects), Australia (one copper and two iron ore projects), and Namibia (uranium project).As a result, the loan balance for overseas exploration projects as of the end of fi scal 2009 amounted to 23.9 billion yen.

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

■ Loan balance for overseas exploration projects in each fiscal year

0

100

200

300

hund

red

mill

ion

yen

05FY 06FY 07FY 08FY 09FY0

10

20

30

num

ber

of

proj

ect

s

1

5577

133

239

14

89

Providing loans for exploration in JapanJOGMEC provided a loan of approximately 700 million

yen for exploration at the Hishikari mine* in Kagoshima Prefecture.* The Hishikari mine is a gold mine discovered in1981 by the

Metal Mining Agency of Japan, the predecessor to JOGMEC. The mine’s annual gold production is 7.5 tons, an amount equivalent to 4% of Japan’s annual gold demand.

■ Geological surveys

Supporting Japanese companies to secure interests through JV exploration

In fi scal 2009, JOGMEC conducted joint venture (JV) exploration with public and private mining companies in 46 regions of 17 resource-rich countries.

In the Ataraya region of Peru, where a promising zinc lode was identified through a drilling survey, JOGMEC transferred mineral interests to an overseas subsidiary of a Japanese company. In addit ion, a Japanese company is set to operate in a rare earth exploration project identifi ed through a joint survey conducted with the Department of Geology and Minerals of Vietnam based on an MOU. Moreover, promising survey results have been obtained in exploration projects in Brazil (molybdenum) and in the USA (antimony and tungsten), and related mineral interests are expected to be transferred to Japanese companies.

Meanwhile, JOGMEC Botswana Geologic Remote Sensing Center is gradually increasing the number of countries where it conducts its activities. In Zambia and

Mozambique, with which JOGMEC signed MOUs in fi scal 2009, JOGMEC Botswana Geologic Remote Sensing Center is transferring its technology to local entities, and is trying to identify promising mining areas from among a broad range of regions through joint surveys. There is an ongoing JV survey in a promising mining area for platinum group metals identifi ed through a joint analysis in Botswana.

Marine resource surveys and procurement of a new resource exploration vessel

JOGMEC conducts its surveys using the Hakureimaru II resource exploration vessel for marine resources in waters around Japan, including submarine hydrothermal depos i ts , under the Ocean Energy and Minera l Resources Development Program, which was adopted in March 2009 by the Ministry of Economy, Trade and Industry.

In f iscal 2009, JOGMEC conducted surveys on submarine hydrothermal deposits in waters around Okinawa and Izu-Ogasawara to estimate the amount of resource reserves. It also conducted an environmental impact assessment in the sea areas surrounding the submarine hydrothermal deposits, together with the Japan Agency for Marine-Earth Science and Technology, and implemented a study on extraction, separation, and refining technologies required for commercialization. In addit ion, JOGMEC conducted a survey on the occurrence of cobalt rich crusts and an environmental assessment in relation to two seamounts in waters around Minami- Torishima (Marcus Island).

In fiscal 2009, funds for procuring a successor to Hakureimaru II, a 29-year-old resource exploration vessel, to accelerate the exploration and development of marine mineral resources was secured in a supplementary budget. In January 2010, JOGMEC signed a contract on the construction of the new resource exploration vessel with a shipbuilding company selected through public invitation of proposals based on the specifi cations determined through deliberations conducted by a procurement committee comprised of outside experts and others. The new resource exploration vessel is scheduled to enter service in fi scal 2011.

■ Illustration of the new resource exploration vessel■ Drilling survey in the Ataraya region in Peru



Supporting exploration and development by private companies through geological surveys

In fiscal 2009, JOGMEC conducted three geological surveys in Chile (all of which were related to copper) and one in Laos (copper) and subsidized a total of 12 exploration projects implemented by Japanese companies, including three projects in Chile (all of which were related to copper), one in Peru (copper), two in Argentina (copper and lithium), one in Australia (uranium), four in Canada (all of which were related to uranium), and one in Uzbekistan (uranium). One of the geological surveys and three of the subsidized projects were newly selected in fi scal 2009 and the rest were continued from the previous fi scal year.

In fiscal 2009, JOGMEC started a feasibility study support scheme concerning infrastructure related to resource development projects implemented by Japanese companies, and conducted seven surveys relating to infrastructure improvement.

■ Drilling survey in Olaroz salt lake in Argentina

■ Collecting, analyzing, and provision of information

Provision of information on mining*JOGMEC provides information that forms a basis for

decision-making on business investment through the periodical distribution and publication of Newsflashes, Current Topics, email magazines, bimonthly metal resource reports, etc. In addit ion, in f iscal 2009, JOGMEC conducted the following surveys and held 12 conferences to repor t on the resul ts of metal resource exploration and development activities and six seminars on the trend of mining in individual countries (one of which was related to iron ore exploration and development). To improve the quality of information, JOGMEC has introduced a process of evaluation by experts from private companies and other entities.・ Surveys on the investment environment in resource-rich

countries (seven countries)

・ Surveys on the uranium investment environment (12 countries)

・ Surveys on global mining trends (basic information relating to 56 countries)

・ Surveys on mineral resource material fl ows (46 types of mineral resources)

・ Surveys on the activities of major resource companies (24 companies)

* Periodical publications, survey reports, and other documents are posted at JOGMEC’s website (www.jogmec.go.jp) as necessary (most are available only in Japanese).

In addition to providing the above basic information, JOGMEC published the Metal Mining Data Book 2009 and Rare Metal Handbook 2009.

To strengthen the ability to collect and analyze mining information on China, whose presence in the resource development sector is growing, JOGMEC established a China Committee comprised of outside experts, which met four times.

In addition, JOGMEC supported the holding of the Rare Metal Forum, a working-level conference sponsored by the Ministry of Economy, Trade and Industry, thereby contributing to the exchange of information and opinions between the public and private sectors.

■ Developing human resources

JOGMEC is engaged in human resource development projects for university students and workers as a measure to deal with the recent labor shortages in the resource development sector. In fi scal 2009, JOGMEC conducted the following lectures and training programs:・ Offered a Basic Resource Development Course on

a fee basis for workers three times, attracting an attendance of 319 people

・ Dispatched six lecturers to the International Institute for Mining Technology

・ Opened collaborative courses at the University of Tokyo, Kyushu University and Waseda University and dispatched lecturers

・ Conducted a classroom training session (attended by 30 people) and developed an educational program as part of a industry-government joint human resource development project

■ Technological development

Developing exploratory techniquesJOGMEC is developing various technologies to be

used for its own exploration activities.Remote sensing using an satellite data is an extremely

effective technique in conducting large-area resource surveys. This technique, however, cannot be fully exercised in tropical rainforests, where the ground surface cannot be observed from above. JOGMEC

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

developed a technology to generate geological maps in the vegetation area using a satellite sensor installed on a Japanese-made satellite called Daichi (Advanced Land Observing Satellite, or ALOS).JOGMEC evaluated the practical feasibility of this technique in Thailand and Namibia in fi scal 2009 and obtained satisfactory results. This technique received the Best Paper award at the Asian Conference on Remote Sensing, held in October 2009, for its uniqueness. In fiscal 2009, JOGMEC also started the development of an analysis technique to detect rare earth minerals using a hyper-spectral sensor to be installed in a next-generation satellite.

Regarding an electromagnetic exploration system called SQUITEM, which has made many achievements in fi eld surveys, JOGMEC is manufacturing a prototype with improved performance.

■ SQUITEM survey in Botswana

Developing mining and metallurgy technologyThe process of separat ing and ext ract ing the

necessary substances from mineral ores is one of the technological elements that is critical to the success of a metallic mineral resource exploration and development project. To promote resource development activities by Japanese companies, JOGMEC provided technical assistance for 13 projects in fiscal 2009 to help such processes as efficiently separating lithium and rare earths from brine and mineral ores.

Smelting facilities for nonferrous metals in Japan have to deal with problems that arise from the degradation of imported mineral ores, such as the need to convert zinc concentrates into fi ne particles, and an increase in impurities contained in ores. In 2009, JOGMEC began development on technologies intended to overcome such technological problems faced by base metal smelting facilities in Japan.

The grade of copper ores available from mines around the world is expected to gradually deteriorate in the future, making it necessary to further reduce the cost of mine development and operations. The application of leaching* to primary copper sulfi de ores may overcome all these challenges at once. Research institutes and companies around the world are fiercely competing in technological development in this sector.

Since fiscal 2005, JOGMEC has been working on a study to establish effi cient hydrometallurgical technology

using bioleaching. In fiscal 2009, JOGMEC continued basic experiments at the Metals Technology Center, searched for sulfur-oxidizing bacteria suitable for leaching, and jointly conducted a large-column test with MINTEK, the South African Republic’s mining technology research center.

In addition, JOGMEC is engaged in the following activities in relation to the development of technology to recycle rare metals used in discarded small electronic devices, which have recently attracted attention as an “urban mine.”・ Developing technology to recover rare metals from

discarded small home-use electronics products, including mobile phones and digital cameras, and cemented carbide tools

・ Developing technology to efficiently recycle glass polishing materials and recover rare earths from fl uorescent materials

・ Conduct ing surveys on the state of d iscarded e lect ron ics and e lect r ic appl iances co l lec ted through national model projects of recycling systems (undertaken by seven local governments)

Regarding the technology to recover tungsten from discarded cemented carbide tools, which has advanced to the demonstration test stage, the recovery cost is expected to be signifi cantly reduced by the introduction of a new processing technique.

■ Demonstration testing facility for the recycling of cemented carbide tools

* Process to leach out a target metal from ore using a solution such as sulfuric acid.

Chapter 3


Stockpiling

JOGMEC is responsible for the management of petroleum, LPG, and rare metals stockpiling programs, construction of national LPG stockpiling bases, and provision of financial support for private-sector stockpiling.JOGMEC maintains a system that enables it to manage stockpiles safely and efficiently in ordinary times and to release reserves expeditiously in the event of an emergency, thereby contributing to the stable supply of resources and the smooth management of the national economy.

Namikata national LPG stockpiling base under construction

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

■ Integrated management of national petroleum stockpiling and support for private-sector stockpiling

In Japan, the private-sector petroleum stockpiling program and the national petroleum stockpiling program began in fiscal 1972 and 1978, respectively. As of the end of March 2010, the strategic government reserves consist of 115 days’ worth of crude oil and oil products stored in ten national petroleum stockpiling bases and in tanks leased from the private sector. Private-sector reserves comprise 84 days’ worth of crude oil and oil products stored in private-sector tanks, etc.

In re lat ion to nat ional s tockpi l ing, JOGMEC is commissioned by the government to keep national petroleum stockpiles and stockpiling bases under integrated management, to conduct surveys, research, and technological development, and to engage in international cooperation, and it also contributes to private-sector stockpiling by providing loans to private companies that are obligated to hold stocks.

■ Increasing national stockpiles of Liquefied Petroleum Gas (LPG) toward 1.5 million tons

Japan’s strategic stockpiling of LPG has also been implemented through a two-pronged program consisting of national stockpiling and private-sector stockpiling. As of the end of March 2010, private-sector stockpiles were equivalent to 57.0 days’ imports of LPG, compared with the mandatory reserves of 50 days’ imports.

Regarding the national LPG stockpiling, JOGMEC is

operating and constructing five stockpiling bases on commission from the government in order to achieve the target reserves of 1.5 million tons, which are equivalent to about 40 days’ imports. JOGMEC is currently managing the operation of national LPG stockpiling bases located in Nanao (Ishikawa Prefecture), Fukushima (Nagasaki Prefecture), and Kamisu (Ibaraki Prefecture), which together hold LPG worth 21.7 days’ imports as national stockpile. Construction of stockpiling bases is underway in Namikata (Ehime Prefecture) and Kurashiki (Okayama Prefecture).

■ Stockpiling of rare metals essential to industry

In recent years, the supply of rare metals, which are indispensable for manufacturing electronic components and as raw materials for steel, is becoming increasingly unstable due to rising demand from China and other countries, and due to policy changes on the part of resource-producing 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 promoting exploration and development, recycling, and developing alternative materials as medium to long-term measures to ensure stable supplies. JOGMEC is stockpiling rare metals, with the reserves stored and managed at a national stockpiling base and to sell stockpiled materials and change the form of the materials as required.

JOGMEC also conducts surveys on supply / demand and market trends.

■Stockpiling in fiscal 2009

LPG Stockpiling Rare Metals StockpilingOil Stockpiling

National Stockpiling

48.07 million kl(product equivalent)

Private Stockpiling

34.95 million kl(product equivalent)

115 days 84 days


636 thousand tons

Private Stockpiling

1,673 thousand tons

21.7 days 57.0 days


Target

Private StockpilingTarget

42 days 18 days

as of March 31, 2010 domestic consumption level as of March 2010 imports level

Stockpiling



■ Safe and efficient management of national petroleum and LPG reserves

About 50.6 million KL of national petroleum reserves are stored at the 10 national oil stockpiling bases across the country and in tanks leased from private companies and around 640,000 tons of national LPG stockpiles are stored in three above-ground stockpiling bases. JOGMEC is keeping the national petroleum and LPG stockpiles under integrated management.

Safe management of oil and LPG reservesUnder JOGMEC’s integrated management, each

stockpiling base conducts various activities ranging from routine procedures for disaster prevention to large-scale anti-disaster exercises periodically and continuously in order to prevent disasters. Through such activities, JOGMEC improves safety while strengthening cooperation with local governments, other relevant local organizations, and the relevant government organizations. Listed below are examples of exercises conducted in fi scal 2009.・ Comprehensive petrochemical complex exercises (at

petroleum stockpiling bases in Kuji, Akita, Kushikino, Fukui, Kikuma, Shibushi, and at an LPG stockpiling base in Fukushima)

・ Joint exercise for the protection of citizens (at an LPG stockpiling base in Nanao)

・ Anti-oil leak exercise (at petroleum stockpiling bases in Mutsu-Ogawara, Kuji, Akita, Shirashima, Kamigoto, and Kushikino

■ Joint exercise for the protection of citizens (at an LPG stockpiling base in Nanao)

Increasing efficiency of integrated management of national petroleum reserves

To increase the efficiency of the management of national petroleum reserves, JOGMEC introduced a general competitive bidding system for the operation of all national petroleum stockpiling bases in fiscal 2009

and selected subcontractors to undertake the operation starting in fi scal 2010. JOGMEC is also promoting further cost reduction efforts, such as extending the application of general competitive bidding to the work processes contracted out by individual bases and reviewing the specifi cations of construction work, while regarding safe operation of stockpiling bases as the prerequisite.

■ Enhancing emergency response capabilities

To maintain and improve a system that enables quick response to the government’s request for the release of reserves, JOGMEC changes the types of stockpiled oil, transfers reserves between different bases, and conducts various training programs. JOGMEC also contributed to improving the fl exibility of national petroleum stockpiling by involving itself in the stockpiling of oil products and joint stockpiling with the U.A.E., both of which began in fi scal 2009. Major activities conducted in fi scal 2009 are as follows:,

・ Supported the government’s sale of 78,000 KL of middle oil (Hout) and 360,000 KL of special crude oil (Attaka)

・ Procured and transferred to the government 47,000 KL of light oil (Murban)

・ Completed the shift of the Shirashima base to light oil stockpiling by transferring 334,000 KL of heavy oil (Khafji) from there to the Mutsu-Ogawara and other bases

・ Transferred 118,000 KL of middle oil (Upper Zakum) from the Shibushi and other bases to the Akita base

・ Transferred 190,000 KL of light oil (Murban) from the Kiire base to Seibu Oil’s Ube base and the Shibushi base

・ Procured and transferred to the government 130,000 KL of heating oil for stockpiling based on the decision to start national stockpiling of oil products

・ Provided a subsidy to support the delivery of crude oil stocks owned by the U.A.E. to the Kiire base for storage there in relation to the joint stockpiling program with the U.A.E.

・ Conducted exercises for the emergency release of reserves at national oil stockpiling bases in the eastern part of Tomakomai, and in Kushikino and Kamigoto

・ Conducted exercises for the emergency release of reserves at national LPG stockpiling bases in Kamisu, Fukushima, and Nanao

■ International cooperation in petroleum stockpiling

The oil consumption in the ASEAN region, which is similar in amount to the consumption in Japan, is expected to continue growing significantly. JOGMEC is

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

contributing to strengthening energy security in Japan and other Asian countries by using national stockpiles in a strategic manner through such activities as promoting international cooperation to establish a petroleum stockpiling system in Asia under the framework of ASEAN + 3, and enhancing stockpiling cooperation with China, which is the largest oil-consuming country in Asia.・ Supported the ASENAN Center for Energy as a co-

secretariat in the management of a working group on the formulation of a roadmap for the establishment of a petroleum stockpiling system under the framework of ASEAN+3, and hosted the third meeting of that working group in Sapporo

・ Held a conference and a working group meeting based on a strategic assistance agreement with Korea National Oil Corporation (KNOC)

■ Third meeting of the working group on the formulation of the roadmap (in Sapporo)

■ Providing loans for petroleum and LPG stockpiling by private companies

In fiscal 2009, JOGMEC provided loans totaling a record 926.1 billion yen for the procurement of oil and LPG for stockpiling by private companies that are obligated to hold stocks. JOGMEC steadily raised funds despite the impact of the global financial crisis, by introducing a bidding system for the selection of the lead fi nancial institution for syndicated loans.

■ Construction of underground LPG stockpiling bases

Construction proceeded steadily in fi scal 2009 on new rock cavern underground stockpiling bases in Namikata and Kurashiki, whose construction period was extended to take measures against a high permeability layer and the formation of rust on the shaft metal pipes, according to the revised construction plan. Consequently, JOGMEC is scheduled to acquire the capacity to stockpile 1.5 million tons of LPG by fi scal 2012.

■ Excavation of the No. 1 underground propane tank at the Kurashiki Base

■ Rare metal stockpiling

In response to a report made in July 2009 by a subcommittee on the mining industry of the Advisory Committee for Natural Resources and Energy under the Agency for Natural Resources and Energy, indium and gallium were added to the scope of rare metals covered by national stockpiling. JOGMEC also increased its stockpiles of rare metals.

In addition, JOGMEC replaced tungsten ore with ammonium paratungstate (APT) as a stockpiling item in order to improve convenience for users.

■Delivery of rare metals to a stockpiling warehouse

Moreover, JOGMEC conducted a broad range of surveys on trends related to rare metals, including a survey on the supply-demand conditions for rare metals covered by the stockpiling program and a survey to estimate rare metal demand in relation to the creation of a low-carbon society. It also exchanged information with overseas stockpiling organizations.

Kitakami River (revived by Matsuo Neutralization Plant)

Chapter 4



JOGMEC provides technical and financial

support to ensure that local governments and

Japanese companies are able to implement

appropr ia te mine pol lu t ion prevent ion

measures.

Matsuo Neutralization Plant

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

■ Technical assistance 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 controlling entities, we offer consulting as part of our survey and advisory services, and provide information related to construction work for mine pollution controls and the formulation of mine pollution control policy. We also provide technical assistance for designing construction work for mine pollution controls on commission from mine pollution controlling entities and have undertaken the operation and management of Matsuo Neutralization Plant (Iwate Prefecture). Additionally, we collect and organize data on abandoned mines, offer technical guidance and training courses, and provide support for mine control measures taken by the government, in order to increase the efficiency of overall mine pollution controls 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 controls

JOGMEC prov ides loans to Japanese pr iva te companies implementing mine pollution control projects, and it 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-producing countries

Japan has technology and systems for mine pollution controls which have been developed through many years of efforts to control mine pollution and which will be useful around the world. JOGMEC contributes to the promotion of environment-friendly mine development, and indirectly helps Japan secure resource interests by disseminating information and knowhow related to mine pollution controls to resource-producing countries.

■Project flow for mine pollution control

without owners

Operating mines

with owners

Municipal Governments (1/4)

Abandoned MinesSuspended or Abandoned Mines

JOGMEC

Technical & Intelligence

Support

Grants for Administrative Services Subsidies Interest Subsidy Subsidies

(3/4)

Technical Support

Implementation of Mine Pollution Control

Financial ＆Technical Support

Funds

Deposits

Government




■ Technical support for mine pollution control

Technical support for mine pollution controlling entitiesIn 2008, when a local government in Japan requested

technical consulting (survey guidance) on how to deal with a gypsum adherence problems at a mine drainage treatment facility that it had started, JOGMEC drew up a plan for a solution that does not involve a major renovation of the facility and reported on it to the local government.

■ A gypsum adherence problem at the mine drainage treatment facility that received the consulting.

We also provided support for designing construction works for mine pollution control for three mines, and assisted with construction for mine pollution controls at 10 mines, at the request of local governments in Japan. The work on mine pollution controls that had continued in Akita Prefecture for 38 years was completed when a project we had supported was fi nished.

Developing mine pollution control technologyAs is shown in the above-mentioned Akita case, Japan

has made signifi cant progress in mine pollution controls. Still, drainage treatment is ongoing at 80 sites across the country following the completion of mine pollution controls. In light of this situation, JOGMEC is developing mine pollution control technologies mainly with a view to increasing the efficiency of drainage treatment and drastically reducing the drainage treatment cost. Major activities conducted in fi scal 2009 are as follows:・ Started monitoring of the operation of a demonstration

test facility for passive treatment using sulfur-reducing bacteria (passive treatment is a low-cost drainage treatment method based on the natural purification function) that was installed at a model mine based on the research results obtained through laboratory testing

・ Verified the possibility of meeting the strengthened regulation* on the zinc content of effluent with a new low-cost process at a cost 1.2 times the current cost or less through long-term, continuous testing at a model

mine and drew up a report on it・ Conducted a demonstration test of a new process

using iron oxide bacteria that is intended to reduce neutral ized precipitate containing arsenic, and confi rmed the operating conditions that ensure stable treatment based on bacterial oxidation and reduce such neutralized precipitate

■ Demonstration test facility for passive treatment

* In the metal mining sector, regulations on the zinc content will be strengthened in December, with the maximum allowable amount of zinc revised from 5mg/L to 2 mg/L in December 2011

Providing training and developing human resources for mine pollution controls

There are 80 mine drainage treatment faci l i t ies in Japan, including 56 facil i t ies owned by private companies that are obligated to take mine pollution control measures, many of which face problems related to the retirement of experienced fi eld engineers. To cope with this situation, JOGMEC started to conduct a basic training program in fi scal 2008 that targets inexperienced field engineers, in order to improve and maintain the technical standards of treatment facilities. In fi scal 2009, it conducted training programs in Akita and Fukuoka Prefectures.

In fiscal 2009, we held two information exchange conferences (in Tochigi and Tottori Prefectures) on mine pollution and the environment, where we shared information with a total of 130 people involved in mine pollution control work in both the public and private sectors.

In addition, JOGMEC created a video intended to train personnel involved in mine pollution controls and conducted activities to raise awareness about mine pollution controls, including organizing an eco-tour for local high school students.

Operating and managing Matsuo Neutralization PlantJOGMEC operates and manages Matsuo Neutralization

Plant under a contract with Iwate Prefecture. It enhances the crisis management system of the facility through anti-disaster exercises and makes sure to keep the quality of treated effl uent in line with the standards set under the contract, thereby contributing to the preservation of the

Business Overview


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

water quality of Kitakami River, which fl ows through Iwate and Miyagi Prefectures. During fi scal 2009, the number of consecutive days in which the Matsuo mine drainage treatment facility had been operated without incident exceeded 10,000.

■ An anti-disaster exercise at Matsuo Neutralization Plant

■ Providing financial assistance for mine pollution control works by Japanese companies

Providing loans for mine pollution controlsIn fi scal 2009, JOGMEC provided a total of 260 million

yen in loans to four private companies for mine pollution control works and drainage treatment at eight mines. In addition, it lent 170 million yen to two companies to support the implementation of soil pollution control measures on agricultural land in two regions that were contaminated with heavy metals.

Managing mine pollution control reserve funds and project funds

JOGMEC contributes to ensuring the implementation of sustainable mine pol lut ion control projects by appropriately managing reserve funds*1 and project funds*2 accepted from private companies that undertake mine pollution controls based on the Act on Special Measures for Pollution Caused by the Metal Mining Industry, etc. In fiscal 2009, construction work for mine pollution controls at five mines was implemented using the reserve funds, bringing the total number of mines that

received the reserve funds for mine pollution controls to 90 since the reserve fund system started.

*1 A system of setting aside reserve funds to ensure that construction work for mine pollution controls 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 treatment

■ Technical support for the governments of metal resource-producing countries

JOGMEC provides information and technical support to resource-producing countries by holding seminars on mine pollution controls and dispatching experts. Major activities conducted in fi scal 2009 are as follows: ・ Dispatched a mine pollution control policy advisor

and a mine pollution control technical advisor to the Peruvian government and accepted Peruvian trainees

・ Co-sponsored a seminar on mine pollution control in Peru with the Peruvian Ministry of Energy and Mines

・ Co-sponsored a seminar on mine pollution control in Bolivia with Ministry of Mining and Metallugy, and Corporacion Minera de Bolivia (COMIBOL)

・ Dispatched an employee to serve as a lecturer at a training session on environmental problems related to mines that was held by the Japan International Cooperation Agency

■ A seminar on mine pollution control in Peru

General Overview



Financial Review

■ Approval, Audit and Disclosure of Financial Statements

The management of JOGMEC is carried out in accordance with the Law for Incorporated Administrative Agencies (“General Law”), enacted in 1999, and the Japan Oil, Gas and Metals National Corporation Law (“Specifi c Law”), enacted in 2002.

JOGMEC’s accounts are settled in accordance with the requirements of the General Law. 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 an independent firm of 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 statements.

JOGMEC’s financial statements are disclosed promptly after approval. Methods of disclosure include the JOGMEC corporate website and offi cial government bulletins, 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 amount to 303.2 billion yen at the end of fi scal 2009.

In addition to national government investment, which is 55.4 billion yen in fiscal 2009, JOGMEC procures funds from a number of external sources, including revenues from grants for administrative services (24.5 billion yen), subsidies (2.4 billion yen), revenues from entrusted activities (94.1 billion yen), loans from financial institutions (941.4 billion yen). Methods of fund procurement are determined by how JOGMEC plans to use the funds.

■ Earnings Structure

The operation of JOGMEC is basically dictated by the amount of grants for administrative services that received from the government to cover operating expenses, which are 24.5 billion yen in fi scal 2009. JOGMEC adopts costbased income realization criteria. Therefore grants for administrative services are once regarded as liabilities, and then turned into revenues with limits of expenditures along the progress of projects. Revenues from other grants received are paid by subvention to support private companies. These grants represent the amount JOGMEC receives for support on behalf of the government portion of state-sponsored survey and development projects (a subvention or other financial aid) in a specific sector that private companies handle. Revenues from entrusted activities represent the amount

Financial Review


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

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. Because revenues from all these grants are calculated and paid to correspond to the corporation’s operating expenses, general and administrative expenses and expenses for entrusted activities, JOGMEC, in principle, derives no profit from these business activities.

In fiscal 2009, JOGMEC posted a current gross loss of 2.6 billion yen. The main factor in this loss was the fact that JOGMEC posted 7.7 billion yen (including 3.6 billion yen of valuation loss for termination-approved projects) in loss on write-offs of investment in subsidiaries and affiliates regarding their new exploration and termination-approved projects for the current fiscal year in investment in oil and natural gas exploration projects. This amount substantially exceeded earnings such as the guarantee fee income received (2.1 billion yen).

Half of the investment balance is assessed as the fair value based on JOGMEC’s bylaw and in accordance with the practical guidelines for f inancial instrument accounting standards established by the Japanese Institute of Certif ied Public Accountants. This is because it is diffi cult to objectively judge the collectability of stock for investment in the exploratory stage and because the Accounting Standards for Incorporated Administrative Agencies do not assume such case. JOGMEC follows an accounting procedure that reflects the characteristics of equity capital and liability guarantees with which JOGMEC provided companies when investing in exploration projects. In general, extended periods are required for oil exploration development projects, making it difficult to assess their success. Therefore, JOGMEC conservatively evaluated the investments in companies prospecting for resources and booked them as losses with write-offs of investments in subsidiaries and affi liates.

■ Finance and Liability Guarantees

JOGMEC, together with private-sector companies, provides equity fi nance for operations related to oil and gas E&P, natural gas liquefaction and other activities. It also grants liability guarantees for these same activities.

Equity finance is recorded as investments in subsidiaries and affiliates in fixed assets. These investments amounted to 68.7 billion yen at the end of fi scal 2009, representing shares in fourteen companies in total (10.2 billion yen). These cover four companies transferred from the former JNOC, two companies among the seven adopted for new investment, and eight companies adopted by fiscal 2008 and in which investment was made in fi scal 2009. Currently, none of these subsidiaries and affi liates is publically listed. In accordance with the Accounting Standards for Incorporated Administrative Agencies, amounts for liability guarantees for nine companies, which totaled 244.5 billion yen at the end of fi scal 2009, can be found in the attached Notes to Financial Statements and supplementary fi nancial statements.

In oil and LPG stockpiling-related activities, JOGMEC invested 19.5 billion yen at the end of fi scal 2009 in joint-venture stockpiling fi rms 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, which are 0.5 billion yen at the end of fi scal 2009. In addition, the corporation supplies fi nancing 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. Amount of these fi nances is 926.0 billion yen at the end of fi scal 2009. The resources of these loans were raised by syndicated loan from private financial institutions and booked as loans payable for funding private-sector stockpiling activities, which is 926.0 billion yen at the end of fi scal 2009.

Additionally, JOGMEC fi nanced projects that were necessary for exploration for metal resource development overseas (23.8 billion yen in total at the end of fi scal 2009) and provided equity capital (190 million yen in total at the end of fi scal 2009). In fi scal 2009, JOGMEC financed nine projects (new loans amounting to 11.1 billion yen) required for exploration of metal resource development overseas, and launched a fresh project investment of 120 million yen. In addition, JOGMEC fi nanced mine pollution control projects (4.7 billion yen at the end of fi scal 2009).

■ Stockpiling

JOGMEC is responsible for constructing national LPG stockpiling bases. After completing construction, JOGMEC hands over the facilities to the government. Funds received from the government during construction are recorded under liabilities as advances for uncompleted construction, while funds used to pay for construction are recorded under assets as payments for construction in progress, which is 164.6 billion yen at the end of fiscal 2009. Consequently, advances for uncompleted construction and payments for construction in progress relating to this work were transferred to revenues from entrusted activities and expenses for entrusted activities, respectively.

In addition, JOGMEC is responsible for operating petroleum and LPG stockpiling bases. Certain equipment and materials associated with these sites is owned by JOGMEC and recorded on its fi nancial statements under assets as part of machinery and equipment, etc.

JOGMEC also carries out stockpiling rare metals. These rare metals and mineral stockpiles are booked under assets, which amount 30.2 billion yen at the end of fi scal 2009.

■ Mine pollution control

As part of its mine pollution control activity, 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 right 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, which were 70 million yen in fi scal 2009.

Balance Sheet（March 31, 2010）


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

AssetsI Current assets

Cash on hand and in banks 115,986,700,409 1,246,498,661 Marketable securities 28,514,350,490 306,441,166 Trade accounts receivable 7,094,284,972 76,241,644 Inventories 15,622,295,322 167,891,406 Disbursements for work in process 164,615,960,230 1,769,112,952 Advance payments 28,341,444 304,583 Prepaid expenses 2,325,182 24,989 Accrued income 4,406,913,084 47,360,699 Accrued consumption tax 207,039,300 2,225,033 Short-term loans receivable 2,634,330,000 28,310,908 Loans receivable for subsidiaries and affi liates 60,000,000 644,815 Loans receivable for funding private-sector stockpiling activities 926,086,100,000 9,952,564,213 Accounts receivable 1,127,424,317 12,116,328 Advances 1,454,859 15,635

Total current assets 1,266,387,519,609 13,609,753,032

II Fixed assets1. Tangible fi xed assets

Buildings 6,688,771,559 71,883,628 Less : accumulated depreciation (1,581,561,579) (16,996,900)

Structures 1,123,161,621 12,070,517 Less : accumulated depreciation (517,824,375) (5,565,012)

Machinery and equipment 17,717,490,577 190,408,281 Less : accumulated depreciation (8,158,195,519) (87,675,395)

Vessels 760,000,000 8,167,652 Less : accumulated depreciation (759,999,999) (8,167,652)

Vehicles 567,420,540 6,098,018 Less : accumulated depreciation (521,860,743) (5,608,391)

Tools, furniture and fi xtures 2,851,484,480 30,644,648 Less : accumulated depreciation (1,976,431,983) (21,240,537)

Land 3,424,230,362 36,799,896 Construction in progress 4,774,267,765 51,308,627 Rare metals 30,233,968,844 324,921,750

Tangible fi xed assets, net 54,624,921,550 587,049,130 2. Intangible fi xed assets

Patents 155,674,729 1,673,022 Software 20,966,833 225,329 Telephone rights 4,292,000 46,126 Rights for use of facilities 5,777,778 62,093

Total intangible fi xed assets 186,711,340 2,006,570 3. Investments and other assets

Long-term deposit 11,891,306,645 127,794,805 Investments in securities 56,674,680,834 609,077,709 Investments in subsidiaries and affi liates 87,869,743,472 944,328,248 Long-term loans receivable 29,147,480,000 313,245,352 Long-term loans receivable from subsidiaries and affi liates 444,000,000 4,771,628 Security deposits 519,550,758 5,583,565

Total investments and other assets 186,546,761,709 2,004,801,308 Total fi xed assets 241,358,394,599 2,593,857,008

Total assets 1,507,745,914,208 16,203,610,040

Financial Review


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

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

LiabilitiesI Current liabilities

Grants received in advance for administrative services 16,444,571,139 176,728,330 Grants received in advance for facility improvement 236,282,235 2,539,304 Grants received in advance 985,681,066 10,593,026 Current portion of long-term borrowings 5,127,481,736 55,104,586 Loans payable for funding private-sector stockpiling activities 926,086,100,000 9,952,564,213 Trade accounts payable 5,002,223,074 53,758,442 Accounts payable-other 861,357,855 9,256,936 Accrued expenses 4,125,159,402 44,332,718 Advances received 13,775,132,239 148,040,110 Advances received for work in process 164,615,960,230 1,769,112,952 Deposits received 47,787,328 513,566 AllowanceAccrued bonuses 8,848,958 95,099

Total current liabilities 1,137,316,585,262 12,222,639,283

II Long-term liabilitiesContra accounts for services and assetsContra account for assets funded by grants for administrative services 10,867,669,732 116,793,871 Contra account for assets purchased with other grants 872,020,705 9,371,528 Contra account for construction in progress 4,774,267,765 51,308,627

Long-term borrowings 27,529,292,219 295,854,833 AllowancesAllowance for retirement benefi ts 251,082,162 2,698,357 Allowance for restoration costs 112,500,000 1,209,027

Long-term accounts payable 293,652,485 3,155,857 Reserve for prevention of mine pollution 1,812,551,000 19,479,323

Total long-term liabilities 46,513,036,068 499,871,425 Total liabilities 1,183,829,621,330 12,722,510,707

CapitalI Capital

National government investments 303,257,824,569 3,259,084,627 Total capital 303,257,824,569 3,259,084,627

II Capital surplusCapital surplus 3,355,807,108 36,064,558 Accumulated depreciation charged to capital surplus (3,515,554,739) (37,781,351)Accumulated impairment loss charged to capital surplus (1,617,000) (17,378)Fund for prevention of mine pollution 5,066,177,824 54,445,758

Total capital surplus 4,904,813,193 52,711,587

III Retained earningsAccumulated reserve carried over from fi rst mid-term target period 22,612,840,976 243,018,173 Accumulated reserve 151,360,490 1,626,658 Unappropriated loss 6,723,593,739 72,257,859 （Total loss for the year ￥2,608,888,428)

Total retained earnings 16,040,607,727 172,386,972

IV Unrealized holding loss on securities (286,952,611) (3,083,854)

Total Net assets 323,916,292,878 3,481,099,332 Total liabilities and Net assets 1,507,745,914,208 16,203,610,040

Statement of Operations（For the year ended March 31, 2010） Financial Review


(Yen) (U.S. dollars)（Note 1)

Ordinary expensesOperating expenses:Operating expenses 19,972,694,727 214,644,758 Operating and administrative expenses 5,089,314,214 54,694,403 Depreciation 5,305,776,738 57,020,706 Cost for purchases of oil 7,615,799,647 81,846,315 Accrual for bonuses 7,177,838 77,140 Loss on write-off s of investments in subsidiaries and affi liates 7,778,902,516 83,599,167

Expenses for entrusted activities 70,458,758,739 757,213,957 General and administrative expenses:Payroll expenses 947,482,556 10,182,510 Depreciation 11,895,850 127,844 Accrual for retirement benefi ts 13,288,417 142,809 Accrual for bonuses 1,671,120 17,959 Administrative expenses 315,933,453 3,395,308

Finance costs:Interest expense 9,099,724,571 97,793,923 Other fi nance cost 895,768,703 9,626,746

Interest on reserve for prevention of mine pollution 18,362,825 197,344 Operating expenses relating to mine pollution prevention activities 71,995,050 773,724 Miscellaneous losses 168,244,867 1,808,112

Total ordinary expenses 127,772,791,831 1,373,162,728

Ordinary revenuesRevenue from grants for administrative services 16,967,433,586 182,347,486 Operating revenues:Interest on loans receivable 10,021,384,566 107,698,921 Revenue from sales of oil 7,615,799,647 81,846,315 Guarantee fee income received 2,179,822,960 23,426,362 Dividends received 789,616,678 8,485,940 Revenue from rental of vessels 76,204,752 818,966

Revenues from other grants received:State subsidies 2,399,893,107 25,791,436 Compensation received 247,792,798 2,663,007

Revenues from entrusted activities:Revenue from activities entrusted by national government 69,386,402,103 745,689,437 Revenue from activities entrusted by local governments 519,537,679 5,583,425

Financial revenues:Interest income 589,893,797 6,339,536 Interest income on securities 933,828,449 10,035,771

Reversal of contra account for assets funded by grants for administrative services 5,102,648,543 54,837,706 Reversal of contra account for assets purchased with other grants 95,525,819 1,026,607 Miscellaneous income 1,942,729,629 20,878,341

Total ordinary revenues 118,868,514,113 1,277,469,254

Ordinary loss 8,904,277,718 95,693,474

Extraordinary lossLoss on sales of fi xed assets 29,066,275 312,373 Loss on disposal of fi xed assets 6,179,817 66,414

Extraordinary incomeGain on sales of fi xed assets 5,212,401 56,017 Reversal of contra account for assets funded by grants for administrative services 2,754,501 29,602 Reversal of contra account for assets purchased with grants 8,364,109 89,888

Net loss for the year 8,923,192,799 95,896,752 Withdrawal of accumulated reserve carried over from previous mid-term target period 6,314,304,371 67,859,262 Total loss for the year 2,608,888,428 28,037,490

Financial ReviewStatement of Cash Flows（For the year ended March 31, 2010）


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

(Yen) (U.S. dollars)（Note 1)

I Cash fl ows from operating activitiesPayments for raw materials, goods and services purchased (118,558,145,630) (1,274,133,752)Payroll expenses (4,485,060,088) (48,200,538)Loans receivable made (938,739,980,000) (10,088,554,326)Refund of reserve for prevention of mine pollution (543,093,000) (5,836,572)Expenses related to mine pollution prevention activities (71,882,837) (772,518)Purchases of investments (10,357,759,270) (111,313,909)Purchases of oil (8,007,018,087) (86,050,705)Consumption tax paid (578,509,773) (6,217,193)Other operating expenses paid (838,514,636) (9,011,442)Rental fees received for leased vessels and facilities 80,014,989 859,914 Guarantee fees received 2,175,504,074 23,379,947 Reserve for prevention of mine pollution received 15,512,000 166,706 Grants received for administrative services 24,522,792,000 263,544,245 Revenues received from entrusted activities 94,154,756,119 1,011,872,715 Other grants received 2,465,601,268 26,497,596 Collection of loans receivable 694,980,102,000 7,468,888,791 Revenue from sales of oil 8,007,018,087 86,050,705 Consumption taxes refunded 542,673 5,832 Other operating revenues received 2,855,499,029 30,687,792

Subtotal (252,922,621,082) (2,718,136,712)Interest and dividends received 11,376,984,683 122,267,433 Interest paid (8,839,487,309) (94,997,177)

Cash fl ows from operating activities (250,385,123,708) (2,690,866,456)

II Cash fl ows from investing activitiesPurchases of time deposits (291,339,989,217) (3,131,004,720)Proceeds from time deposits upon maturity 251,552,391,672 2,703,410,980 Purchases of securities (25,382,138,870) (272,779,569)Proceeds from securities upon maturity 28,012,000,000 301,042,450 Purchases of tangible fi xed assets (11,809,264,947) (126,913,111)Proceeds from sales of tangible fi xed assets 47,546,185 510,975 Grants received for facility improvement 5,010,550,000 53,847,931 Purchases of intangible fi xed assets (68,905,327) (740,519)

Cash fl ows from investing activities (43,977,810,504) (472,625,583)

III Cash fl ows from fi nancing activitiesProceeds from short-term borrowings 4,400,000,000 47,286,405 Repayments of short-term borrowings (4,400,000,000) (47,286,405)Proceeds from long-term borrowings 15,370,858,372 165,189,236 Repayments of long-term borrowings (9,790,034,372) (105,212,621)Proceeds from fund for prevention of mine pollution 31,277,000 336,131 Proceeds from loans payable for funding private-sector stockpiling activities 926,086,100,000 9,952,564,213 Repayments of loans payable for funding private-sector stockpiling activities (693,379,500,000) (7,451,687,265)Proceeds from national government investments 55,471,000,000 596,141,859 Repayments of lease obligations (135,487,116) (1,456,068)

Cash fl ows from fi nancing activities 293,654,213,884 3,155,875,485

IV Eff ect of exchange rate changes on cash and cash equivalents 180,248 1,937 V Net decrease in cash and cash equivalents (708,540,080) (7,614,617)VI Cash and cash equivalents at beginning of year 2,632,582,931 28,292,133 VII Cash and cash equivalents at end of year 1,924,042,851 20,677,516

Notes to Financial Statements (March 31, 2010)


I. Summary of Significant Accounting Policies1. 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 statements of income and cash fl ows have been prepared in accordance with “Accounting Standards for Incorporated Administrative Agencies” and accounting principles generally accepted in Japan. These are a portion of the financial statements prepared by JOGMEC as required by Article 38 of the “Law Concerning the General Rules for Incorporated Administrative Agencies.”

The translation of yen amounts into U.S. dollar amounts is included solely for convenience, as a matter of arithmetic computation only, at ¥93.05=US$1.00, the exchange rate prevailing on March 31, 2009. 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 ServicesRevenues 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 don’t relate to the passage of time.

3. Depreciation(1) Tangible fi xed 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 47 years Structures: 2 to 43 years Machinery and equipment: 2 to 17 years Vessels: 4 years Vehicles: 2 to 6 years Tools, furniture and fi xtures: 2 to 25 years

(2) Intangible fi xed assetsAmortization 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 fi ve years.Depreciation of certain specif ic depreciable assets

(as defined in “Accounting Standards for Incorporated Administrative Agencies, No. 86”) is directly deducted from capital surplus and reported as accumulated impairment loss charged to capital surplus.

4. Allowances(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

fi nancial diffi culties.(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 fi nancial position and the fair value of the assets pledged as collateral, as well as other relevant factors.(4) Allowance for restoration costs

Allowance for restoration costs are provided at an estimated amount for costs to be incurred to restore the land leased for vessel mooring facilities to its original state.

5. Allowance for Retirement Benefi tsAllowance for retirement benefi ts is provided at the 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 affi liates

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 affi liates, 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 classifi ed as other securities are carried

at fair value with changes in 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. Where there has been a permanent decline in the value of such investments, JOGMEC has written them down. Changes in unrealized holding loss, net of the applicable income taxes, are included directly in net assets section.

Financial Review


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

7. Valuation of Inventories(1) Work in process

Work in process is stated at the lower of cost or market, cost being determined by the specifi c identifi cation method.(2) Merchandise and supplies

Merchandise and supplies are stated at the lower of cost or last purchase price, cost being determined by the fi rst-in, fi rst-out method.

8. Valuation of Disbursements for Work in ProcessDisbursements for work in process are stated at the lower

of cost or market, cost being determined by the specific identifi cation method.

9. Foreign Currency TranslationAssets 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.

10. LeasesNoncancelable leases with aggregate lease payments of

three million yen or more are accounted for either as finance or operating leases; however, the impact of the interest portion included in the lease payments has been omitted from this lease accounting because of its immateriality.

Noncancelable leases with aggregate lease payments of less than three million yen are accounted for as operating leases (whether such leases are classified as operating or finance leases).

11. Consumption TaxesTransactions subject to consumption taxes are recorded at

amounts exclusive of consumption taxes.

II. Additional InformationSince this fi scal year, JOGMEC has adopted the Accounting

Standards for Incorporated Administrative Agencies and Notes to the Accounting Standards for Incorporated Administrative Agencies (revision of the Accounting Standards for Incorporated Administrative Agencies [Study Group of Accounting Standards for Incorporated Administrative Agencies, and Working Subcommittee of Legal and Public Accounting Systems, Fiscal System Subcommittee, Fiscal System Council, March 30, 2010]).

III. Notes to Financial Statements1. Balance Sheet

31-Mar-10

(yen) (U.S. dollars)

(1) Estimated amount of bonuses not recorded as accrued bonuses: 290,831,759 3,125,543

(2) Estimated amount of retirement benefi ts to be coverd by grants for administrative services:

7,035,846,674 75,613,613

(3) Guarantees given for loans: 267,216,671,095 2,871,753,585

2. Statement of OperationsYear ended March 31, 2010

(yen) (U.S. dollars)

(1) Loss on sales of fi xed assets: Tools, furniture and fi xtures 29,066,275 1,246,498,661

(2) Loss on disposal of fi xed assets: Buildings Machinery and equipment Vehicles Tools, furniture and fi xtures Telephone rights

289,5934,219,187

960,448684,589

26,000

3,112 45,343 10,322

7,357 279

(3) Gain on sales of fi xed assets: Buildings Machinery and equipment Tools, furniture and fi xtures

181,4104,982,712

48,279

1,950 53,549

519

3. Statement of Cash Flows(1) Reconciliation between accounts reported in the balance

sheet and cash and cash equivalents Year ended March 31, 2010

(Yen) (U.S. dollars)

Cash on hand and in banks: 115,986,700,409 312,373

Time deposits: (114,062,657,558) (1,225,821,145)

Cash and cash equivalents: 1,924,042,851 20,677,516

(2) Signifi cant non-cash transactions

Year ended March 31, 2010


Assets acquired through fi nance leases :Machinery and equipment: 186,544,500 2,004,777

4. Leases(1) Lease obligations

31-Mar-10


Due within one year from the balance sheet date 156,488,471 1,681,768

Due after one year from the balance sheet date 137,164,014 1,474,089

Total 293,652,485 3,155,857

The above lease obligations have not been classified and presented by current and noncurrent portion in the balance sheet because of their immateriality.(2) Future lease payments for operating lease transactions

31-Mar-10


Due within one year from the balance sheet date 616,800 6,629

Due after one year from the balance sheet date 514,000 5,524

Total 1,130,800 12,153

5. Financial Instruments(Additional information)From this fi scal year, JOGMEC has adopted the Accounting

Standards for Financial Instruments (Accounting Standards No. 10, March 10, 2008) and the Implementation Guidelines for Disclosing the Market Values of Financial Instruments (Guidelines for Implementing Accounting Standards No. 19, March 10, 2008)(1) Matters relating to fi nancial instruments1) Policy for approaching fi nancial instruments

JOGMEC has engaged in financing services, such as loan and investment business. To implement such services, JOGMEC acquires funds from national government investments as well as fi scal loan funds, and borrows funds from fi nancial institutions.2) Description and risk of fi nancial instruments

JOGMEC owns financial assets, mainly comprising loans

Notes to Financial Statements (March 31, 2010)


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 securities and stocks, have been held until maturity and for promoting political purposes. These securities and stocks are exposed to issuers’ credit risk, and risks of interest rate and market price fluctuations. Borrowings, meanwhile, 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 circumstances3) Risk management system relating to fi nancial instruments (i) Managing the credit risk

JOGMEC, via the respective departments in charge, manages risks pursuant to its internal control regulations 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 fl uctuation risk

Shares of projects are owned for political purposes. JOGMEC monitors the market environments and fi nancial 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) Matters relating to the market values of fi nancial instrumentsExcluding insignificant financial instruments, the amount of

fi nancial instruments in the balance sheet, their market values and differences on the last day of the accounting period are stated in the table below. However, financial instruments for which it is very difficult to determine the market value are not covered in the table. (Refer to (Note 2).)

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 fi nancial institutions concerned.(3) Short- and long-term loans receivable

All these loans are provided at fixed interest rates. Their market values are determined by striking interest rates supposed on new similar loans, from the total of the principal and interest of loans receivable based on their classifi cation of type, internal rating and period.(4) Loans receivable for funding private-sector stockpiling

activitiesSince these loans are settled in the short-term at values

almost similar to their book values, they are posted at the book 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 classifi cation of periods.

Liabilities(1) Current portion of long-term borrowings and long-term

borrowingsThese 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

activitiesSince 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) All of the investments in subsidiaries and affi liates and non-listed stocks posted in a portion of the investments in securities in the balance sheet (88,511 million yen posted on the balance sheet) have no marketable prices. It is also very diffi cult to obtain market values by estimating the future cash fl ow under contract. Therefore, stocks of subsidiaries and affiliates are neither included in the objects of market value valuation nor 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 (1,812 million yen posted in the balance sheet) must be repaid upon demand. Since it is very difficult to specify the time for such repayment demand, the reserve is not included in the

31-Mar-10

Amount posted in the balance sheet Market value Difference

(Million yen) (Million U.S. dollars) (Million yen) (Million

U.S. dollars) (Million yen) (Million U.S. dollars)

(1) Cash on hand and in banks 115,986 1,246 115,986 1,246 －－(2) Marketable securities and

investments in securities

1) Held-to-maturity securities 44,083 473 44,457 477 373 4

2) Other securities 41,105 441 41,105 441 －－(3) Short- and long-term

loans receivable 31,781 341 32,549 349 767 8

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

926,086 9,952 926,086 9,952 －－

(5) Long-term deposits 11,891 127 12,043 129 152 1

Total Assets 1,170,934 12,583 1,172,227 12,597 1,292 13

(1) Current portion of long-term borrowings and long-term borrowings

32,656 350 32,987 354 330 3

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

926,086 9,952 926,086 9,952 －－

Total Liabilities 958,742 10,303 959,073 10,307 330 3

(Note) Amounts of less than one million yen and one million U.S. dollars are rounded down.(Note 1) Matters relating to methods for determining the market value of financial

instruments and transactions of marketable securities

Financial Review


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

objects of market value valuation.

6. Impairment of Fixed Assets(1) Fixed Assets with impairment losses

■Fixed assets with impairment losses charged to capital surplus

31-Mar-10


Telephone rights: 44,000 473

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, and were not charged to income.(2) Fixed Assets with indicators of impairment losses1) The facility of training in Hakone

The facility of training in Hakone had an indicator of impairment losses. It was decided in the plan resolved by Cabinet Council on December 24, 2007 that the facility should be sold by the end of March 2011 to streamline incorporated administrative agencies.

But an impairment loss for this facility is not recognized, because this facility is used for training of recruits every year, and will be used in the future as well as is maintained regularly.

■Book value of the facility of training in Hakone

31-Mar-10


Buildings: 459,053,991 4,933,412

Structures: 52,088,775 559,793

Tools, furniture and fi xtures: 82,425 886

Land: 53,500,000 574,960

Telephone rights: 43,000 462

Rights for use of facilities: 2,000,000 21,494

2) The warehouse associated with the operations of the new neutralization and treatment facility at abandoned Matsuo mineThe warehouse associated with the operations of the new

neutralization and treatment facility at abandoned Matsuo mine had the following indicator of impairment losses:

It was decided in the plan resolved by Cabinet Council on December 24, 2007 that JOGMEC should conduct negotiations for disposal, such as sale, of the warehouse by the end of March 2011 to streamline incorporated administrative agencies.

However, an impairment loss for this warehouse is not recognized, because this warehouse continues to be used for operating and managing the new neutralization and treatment facility at abandoned Matsuo mine, although the negotiations on its disposal, such as sale, are ongoing with the target of the end of March 2011.

■ Book value of the warehouse associated with the management of the new neutralization and treatment facility at abandoned Matsuo mine

31-Mar-10


Buildings: 13,135,470 141,166

IV. Act ions Resul t ing in Signi f icant F inancia l ObligationsBased on the construction contract of National LPG

stockpiling bases in accordance with Article 5-1 of Specific Law, the amount for actions resulting in significant financial obligations scheduled to be paid after the following fi scal year is 55,885 million yen (601 million U.S. dollars).

V. 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 refi ning 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.

VI. Subsequent EventsNot applicable.

VII. Other Financial Information to Disclose the Condition of JOGMEC

The following are some actions of JOGMEC in the plan to streamline incorporated administrative agencies decided by cabinet council on December 24,2007.(1) Review of services and affairs[Operation of national petroleum stockpile base]

When JOGMEC contracts with private companies for operation of stockpile base, open bid should be introduced by the end of March 2013. At least about one base, an open bid should be introduced by the end of March 2011. JOGMEC minimizes requirements for entry to open bid and show the specification of equipments, facilities and operation, and JOGMEC strives to open bidders besides a company currently operating. Framework of compliance should be established to keep fairness and clarity.

[Mine pollution control]Contract for operation of the new neutralization and treatment

facility at abandoned Matsuo mine should introduce open bid by the end of March 2009.

(2) Effi ciency and independence[Sales of Asset]- Facility of training in Hakone should be sold by the end of

Marche 2011.- JOGMEC should negotiate to sell the warehouse associated

with the operations of the new neutralization and treatment facility at abandoned Matsuo mine by the end of March 2011.

- Dormitory should be sold and newly purchased by the end of March 2009.

Report of Independent Auditors Financial Review


Report of Independent Auditors

Mr. Kawano HirobumiPresidentJapan Oil, Gas and Metals National Corporation

As a result of our audit, it is our opinion that:

Pursuant to Article 39 of “The Law Concerning the General Rules of Incorporated Administrative Agencies,” we have audited the fi nancial statements by account consisting of the balance sheet by account, the statements of operations, cash fl ows and execution costs for administrative services by account, the proposal for appropriation of retained earnings and disposal of accumulated defi cit by account, and the supplementary schedules by account of Japan Oil, Gas and Metals National Corporation (“JOGMEC”) for the 2009 fi scal year from April 1, 2009 to March 31, 2010. We have also audited the combined fi nancial statements consisting of the combined balance sheet, the combined statements of operations, cash fl ows and the execution costs for administrative services and the combined supplementary schedules as well as the accounting matters stated in the business report and the financial reports for each account of JOGMEC for the 2009 fi scal year. The accounting matters which we audited in the business report were derived from the accounting books and records of JOGMEC. These financial statements, the business report and the financial reports are the responsibility of the President of JOGMEC. Our responsibility is to express an opinion independently on these fi nancial statements, the business report and the fi nancial reports based on our audit.

We conducted our audit in accordance with auditing standards for incorporated administrative agencies and auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We plan the audit considering the possibility that errors or illegal acts committed by personnel within the organization of the incorporated administrative agencies may result in material misstatements of the financial statements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by the presidents of the incorporated administrative agencies, as well as evaluating the overall presentation of the fi nancial statements. We believe that our audit provides a reasonable basis for our opinion. This basis includes the fact that, during the course of our audit, we did not identify any errors or illegal acts committed by personnel within JOGMEC’s organization which would result in material misstatements of the fi nancial statements. However, our audit was not designed for the purpose of expressing an opinion on whether or not there were any errors or illegal acts committed by personnel within JOGMEC’s organization which would not result in material misstatements of its fi nancial statements.

1) the fi nancial statement by account (except for the proposal for appropriation of retained earnings and disposal of accumulated deficit) of the Account for Oil and Natural Gas, and Account for Metal Mining Stockpiling, Exploration Loans and Others, the General Account for Metal Mining, the Reserve for Prevention of Mine Pollution Account, the Fund for Prevention of Mine Pollution Account and the Account for Metal Mining Precision Study, as well as the combined fi nancial statements present fairly, in all material respects, the fi nancial position by account and on a combined basis of JOGMEC, and the results of its operations, its cash fl ows and its execution costs for administrative services by account and on a combined basis in conformity with “Accounting Standards for Incorporated Administrative Agencies” and accounting principles generally accepted in Japan,

2) the proposal for appropriation of retained earnings and disposal of accumulated deficit for each account is presented in accordance with the related regulations,

3) the accounting matters stated in the business report present properly the affairs of JOGMEC, and4) the financial reports related to each account present properly JOGMEC’s financial affairs in accordance with the budget

classifi cation established by the President of JOGMEC.

The U.S. dollar amounts in the accompanying fi nancial statements with respect to the year ended March 31, 2010 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.

We have no interest in JOGMEC which should be disclosed in compliance with the Certifi ed Public Accountants Laws.

Ernst & Young Shin Nihon LLC

June 15, 2010

Overview of JOGMEC


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

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

■ President Hirobumi Kawano

■ Capital 303.26 billion yen (as of 31 March, 2010)

■ No.of employees 474 people (as of 31 March, 2010)

■ 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 JOGMEC are to supply the necessary funds for exploring for petroleum and combustible natural gas as well as metallic minerals or others and to conduct other operations necessary for promoting the development of petroleum, combustible natural gas 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. 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.

■ Location Headquarters　　Muza Kawasaki Central Tower, 1310 Omiya-cho, Saiwai-ku, Kawasaki-city, Kanagawa 212-8554 Japan　　TEL : +81-44-520-8600／FAX : +81-44-520-8710Technology & Research Center　　1-2-2 Hamada, Mihama-ku, Chiba-city, Chiba 261-0025 Japan　　TEL : +81-43-276-9212／FAX : +81-43-276-4061

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 effi ciency, 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 second medium-term objective period beginning in April 2008.

What is an Incorporated Administrative Agency?

Offi cer（as of 30 November, 2010）


Position Name Term Previous History

President Hirobumi Kawano2008.4.1

～

2012.2.28

- 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

PresidentFumiaki Fujita

2008.4.1

～

2012.2.28

- Director, Senior Vice President, General Manager of Negishi Refi nery, Nippon Petroleum Refi ning Co., Ltd.- Executive Offi cer and General Manager of Sendai Refi nery, Nippon Petroleum Refi ning Co., Ltd.- Deputy Managing Director, Thai Paraxylene Co., Ltd.- Assistant General Manager, Engineering Planning Group, Engineering Department, Mitsubishi Oil Co., Ltd.

Executive Director

Hiroshi HirotaInternal Audit (Offi ce), General Coordination, Financial Management & Accounting, & Evaluation

2010.4.1～

2012.3.31

- Director General for Technology Policy Coordination, Minister's Secretariat, Ministry of Economy, Trade and Industry, Government of Japan- Director General, Kanto Bureau of Economy, Trade and Industry, Ministry of Economy, Trade and Industry, Government of Japan- Deputy Director General, Agency for Natural Resources and Energy, Government of Japan- Director, Petroleum Refi ning Division, Petroleum Department, Agency for Natural Resources and Energy, Government of Japan

Exective Director

Hironori WasadaOil & Gas Upstream Business Unit

2009.6.29

～

2012.2.29

- Councilor, Oil & Gas Upstream Business Unit, JOGMEC- Director General, Project Group, JOGMEC- Director General, First Project Department, Japan National Oil Corporation

Exective Director

Akira SuzukiOil & Gas Upstream Technology Unit

2009.6.29

～

2012.2.29

- Councilor, Oil & Gas Upstream Technology Unit, JOGMEC- Director General, Petroleum Stockpile Management Department, JOGMEC- General Manager, Jakarta Offi ce, Japan National Oil Corporation

Exective Director

Hisamitsu MoriwakiMetals Strategy & Exploration Unit

2008.3.1

～

2012.2.29

- Senior Councilor, Metals Strategy & Exploration Unit, JOGMEC- Director General, Metals Exploration Group, JOGMEC- Deputy Director General, Mineral Resource Survey Department, Metal Mining Agency of Japan

Exective Director

Hitoshi AraiStockpile Unit

2010.4.1

～

2012.3.31

- Senior Executive Offi cer, Member of the Board, General Manager of Sales Division and Engineering Division, Tokyo Gas Engineering Co., Ltd.- Senior Executive Offi cer, Member of the Board, General Manager of Sales Division, Tokyo Gas Engineering Co., Ltd.- General Manager of Sodegaura LNG Terminal, Tokyo Gas Co., Ltd.

Exective Director

Eimon UedaMetals Technology & Financial Support Unit

2010.4.17

～

2012.3.31

- Controller for Financial System’s Stability, Kanto Local Finance Bureaus, Ministry of Finance- Counselor in Charge of International Economic Cooperation, Cabinet Secretariat, Government of Japan- Head, Outreach Unit for Financial Sector Reform, Organization for Economic Co-operation and Development (OECD)

Auditor Sumio Matsuzaki2007.4.1

～

2012.2.29

- President and Representative Director Tomakomai Chemical- General Manager of Sales Department, Recycling and Environment Division, Nippon Mining & Metals Co., Ltd.- Deputy General Manager of Sales Department, Recycling and Environment Division, Nippon Mining & Metals Co. Ltd.

Auditor Tadakazu Tanimoto2010.4.1

～

2012.3.31

- Director & Chief Investment Offi cer, Nissay Asset Management Corporation- General Manager of Treasury & Capital Markets Department, Nippon Life Insurance Company- Deputy General Manager of Securities Operations Department, Nippon Life Insurance Company

Organization Structure（as of 30 November, 2010）


Oil and G

as Upstream

Investment

and Research &

Develo

pment

Metals S

trategy, E


y Develo

pment

Financial R

eviewM

ine Pollution C

ontrolS

tockpiling

● Internal Audit Offi ce

● Genaral Coordination Department

● Financial Management & Accounting Department

● Evaluation Department

Oil & Gas Upstream Business Unit

● Project Department

● Business Development Department

● Research Department

Oil & Gas Upstream Technology Unit

● Technical Strategy & Planning Department

● Survey & Technology Department

● Technology Research & Development Department

Metals Strategy & Exploration Unit

● Metals Strategy Department

● Metals Exploration Department

Stockpile Unit

● Stockpile Planning Department

● Petroleum Stockpile Management Department

● LPG Stockpile Management Department

● Rare Metals Stockpile Department

Metals Technology & Financial Support Unit

● Mine Pollution Control Department

● Metals Finance Department

● Metals Mining Technology Department

● Research Vessel Project Group

President

Exective Vice President

Exective Directors

Auditors

Auditors’ Office

Worldwide Network



Beijing Offi ce (China) #Room 709, Beijing Fortune Building5 Hao, Dong San Huan Bei-Lu, Chao Yang District, Beijing, 100004, CHINA

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

Jakarta Offi ce (Indonesia)5th Floor, SUMMITMASⅡ, Jl Jend.Sudirman Kav.61-62, Jakarta, 12190, INDONESIA

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

Sydney Offi ce (Australia)Level 23, BT Tower, 1 Market Street, Sydney, NSW 2000, AUSTRALIA

(Oil & Gas)+61-2-9264-9611(Metals)+61-2-9264-2493

+61-2-9264-6781

+61-2-9264-4914

Washington Offi ce (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 Offi ce (U.S.A.) One Riverway, Suite,450, Houston, Texas 77056, U.S.A. +1-713-622-0204 +1-713-622-1330

Vancouver Offi ce (Canada) 1710-400 Burrard Street, Vancouver, B.C. V6C 3A6, CANADA +1-604-685-1282 +1-604-685-4123

Mexico Offi ce / Ofi cina en Mexico (Mexico)

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

+52-55-5280-1099 +52-55-5280-214

Lima Offi ce / Ofi cina en Lima (Peru)Av. Camino Real 348, Torre El Pilar, Piso 7, Offcina 704, San Isidro Lima-27, PERU

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

Santiago Offi ce/ Ofi cina en Santiago (Chile)

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

+56-2-203-6130 +56-2-203-6121

Moscow Offi ce (Russia)Room 650, Hotel Mezhdunarodnaya-2 Krasnopresnenskaya Nab.12, Moscow 123610, RUSSIAN FEDERATION

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

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

(Oil & Gas)+44-20-7287-7915(Metals)+44-20-7287-7916

+44-20-7287-7917

+44-20-7287-7917

Middle East Offi ce (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)

Geologic Information Centre 1st Floor, Plot No. 1734, Khama 1 Avenue, Lobatse, BOTSWANA

+267-530-1503 +267-530-1501

BEIJING OFFICE

JAKARTA OFFICE

SYDNEY OFFICE

WASHINGTON OFFICE

HOUSTON OFFICE

VANCOUVER OFFICE

MEXICO OFFICE

LIMA OFFICE

SANTIAGO OFFICE

MOSCOW OFFICE

LONDON OFFICE

MIDDLE EAST OFFICE

BOTSWANAGEOLOGIC REMOTE SENSING CENTRE

　


Domestic Network


Tomakomai Site Management Offi ce 308 Aza-Shizukawa, Tomakomai-shi, Hokkaido 059-1363 Japan 0144-56-2466 0144-56-1513

Mutsu-Ogawara Site Management Offi ce 525-2 Aza-Futamata, Oaza-Obuchi, Rokkasho-mura Kamikita-gun, Aomori 039-3212 Japan 0175-73-3611 0175-73-3612

Akita Site Management Offi ce 219 Aza-Ashizawa, Funakawa, Funakawa Minato, Oga-shi, Akita 010-0511 Japan 0185-24-6121 0185-24-4555

Kuji Site Management Offi ce 8-105-2 Heinokuchi, Natsui-cho, Kuji-shi, Iwate 028-0001 Japan 0194-52-2215 0194-52-2216Fukui Site Management Offi ce 1 Aza-Rinkai, 38 Ishishinbo-cho, Fukui-shi, Fukui 910-3133 Japan 0776-85-1229 0776-85-1220Kikuma Site Management Offi ce 4642-1 Tane, Kikuma-cho, Imabari-shi, Ehime 799-2302 Japan 0898-54-2929 0898-54-2928

Shirashima Site Management Offi ce 1-108 Hibiki-machi, Wakamatsu-ku, Kitakyushu-shi, Fukuoka 808-0021 Japan 093-761-1411 093-761-1454

Kamigotou Site Management Offi ce 818-411 Aza-Orishima, Tsuzukihamanouragou, Shinkamigoto-cho, Minamimatsuura-gun, Nagasaki 857-4415 Japan 0959-52-4610 0959-52-4617

Kushikino Site Management Offi ce 1 Seisatsu-cho, Ichikikushikino-shi, Kagoshima 896-0046 Japan 0996-33-1182 0996-33-1189

Shibushi Site Management Offi ce 5024-1 Aza-Shinsuzaki, Kawahigashi, Higashi-Kushira-cho, Kimotsuki-gun, Kagoshima 893-1615 Japan 0994-63-6993 0994-63-6905

Kamisu Site Management Offi ce 6225-40 Okunoya, Kamisu-shi, Ibaraki 314-0116 Japan 0299-97-3020 0299-97-3021Nanao Site Management Offi ce 165-1 Mimuro-machi, Nanao-shi, Ishikawa 926-0007 Japan 0767-58-8787 0767-58-8789Kurashiki Project Management Offi ce 6-6-5 Minamise, Kurashiki-shi, Okayama 712-8055 Japan 086-450-3931 086-450-3932Namikata Project Management Offi ce 600 Ko, Miyazaki, Namikata-cho, Imabari-shi, Ehime 799-2104 Japan 0898-36-4051 0898-36-4061

Fukushima Site Management Offi ce 58-2 Shiohamamen, Fukushima-cho, Matsuura-shi, Nagasaki 848-0403 Japan 0955-41-3030 0955-41-3033

Hokkaido Mine Pollution Control Project Support Offi ce 30-31 Umemoto-cho, Date-shi, Hokkaido 052-0022 Japan 0412-25-1113 0142-23-1259

Tohoku Mine Pollution Control Project Support Offi ce 2-5-17 Matsunami, Yamagata-shi, Yamagata 990-0023 Japan 023-626-4631 023-626-4632

Chugoku-Kinki Mine Pollution Control Project Support Offi ce

1310 Omiya-cho, Saiwai-ku, Kawasaki-shi, Kanagawa 212-8554 Japan 044-520-8640 044-520-8730

Kyushu Mine Pollution Control Project Support Offi ce 1-5 Tashima Hon-machi, Hita-shi, Oita 877-0026 Japan 0973-27-6140 0973-27-6141

Kashiwazaki Test Field Offi ce 690 Oaza-Hirai, Kashiwazaki-shi, Niigata 945-1353 Japan 0257-21-5420 0257-21-5443Matsuo Mine Pollution Control Project Support Offi ce 1-3-1 Kashiwadai, Hachimantai-shi, Iwate 028-7303 Japan 0195-78-3156 0195-78-3076

Metals Technology Center 9-3 Furudate, Kosakakozan, Kosaka, Akita 017-0202 Japan 0186-29-3829 0186-29-3849

Head Office　Technology & Research Center (TRC)

● Oil Stockpile Site Management Office　● LPG Stockpile Site Management Office or Project Site Management Office 　● Kashiwazaki Test Field Office　 ◆ Mine Pollution Control Project Support Office　 ■ Metals Technology Center

Mutsu-OgawaraSite Management Office

Tomakomai Site Management Office

Shirashima Site Management OfficeFukui Site Management Office

Kamigotou Site Management Office

Akita Site Management Office

Shibushi Site Management OfficeKushikino Site Management Office

Kuji Site Management Office

Kikuma Site Management Office

Nanao Site Management Office

Fukushima Site Management Office

Kamisu Site Management Office

Namikata Project Management OfficeKurashiki Project Management Office

Hokkaido Mine Pollution Control Project Support Office

Tohoku Mine PollutionControl Project Support Office

Kyushu Mine Pollution Control Project Support Office

Kashiwazaki Test Field Office

Metals Technology Center

Matsuo Mine Pollution ControlProject Support Office

Head OfficeChugoku-Kinki Mine Pollution Control

Project Support Office

Technology & Research Center (TRC)

Message from the President ................................. 2 JOGMEC’s Activities ............................................ 4 Oil and Gas Upstream Investment and Research & Development .............................. 6

Metals Strategy, Exploration, and Technology Development ...................................................... 12

Stockpiling ......................................................... 18 Mine Pollution Control ........................................ 22 Financial Review

　General Overview ........................................... 26 　Balance Sheet ................................................ 28 　Statement of Operations ................................. 30 　Statement of Cash Flows ................................ 31 　Notes to Financial Statements March 31, 2010 ... 32 　Report of Independent Auditors ..................... 36

Overview of JOGMEC ........................................ 37 Offi cer ................................................................ 38 Organization Structure ....................................... 39 Worldwide Network ............................................ 40 Domestic Network .............................................. 41

INDEX

annual report 2010 - jogmec · metals technology center 9-3 furudate, kosakakozan, kosaka, akita...

Documents