JOGMEC promotes HSE in accordance with the following policies:　1．Compliance with laws and regulations　2．Reduction of burden through self-regulation and

collaboration with affiliate companies　3．Dissemination of policies and education/training　4．Disclosure of information

May. 2018

Japan Oil, Gas and Metals National Corporation

Corporate Profile

2 3

ContentsMessage from the president 02About JOGMEC 04Oil and natural gas 06Metals 16Coal 24Geothermal 28

Resource diplomacy and international cooperation 32

JOGMEC’s areas of operation 34

Corporate ProfileOfficial name Japan Oil, Gas and Metals National

Corporation

Location Head OfficeToranomon Twin Building, 2-10-1,Toranomon, Minato-ku, Tokyo 105-0001 JAPANTel: +81-3-6758-8000Fax: +81-3-6758-8008

Date ofestablishment

February 29, 2004

Capital 893 Billion yen （as of June , 2017)

Expenditure budget

1,786 Billion yen（fiscal 2017）

Number of employees

567 persons（as of January , 2017）

Seeking a stable supply of natural resources and energy for Japan and the World

Message from the president

We at JOGMEC, an organization that covers natural resources in general, perform the activities with the purpose of, among others, contributing to stable and inexpensive supplies of oil, natural gas, metals, coal, and geothermal energy.With respect to oil and gas, JOGMEC provides financial and technical support for exploration and development projects carried out by Japanese private companies. JOGMEC is also engaged in R&D, such as for the development of methane hydrate, and enhanced oil recovery technologies (CO2EOR). Also, with the amendment of the Act on JOGMEC in 2016, JOGMEC has strengthened support functions to Japanese private companies and is able to assist the acquisition of capital tie-ups with overseas resource companies, and make additional investment for petroleum projects that have moved from the exploration phase to the development phase. Regarding metals, JOGMEC provides financial and technical support for the exploration and development of base and rare metals, in addition to conducting surveys on deep-sea minerals, including polymetallic massive sulfide deposits. Furthermore, JOGMEC is working to prevent pollution from domestic abandoned mines. In the area of coal, in addition to providing financial and technical support for exploration and development, JOGMEC performs the activities related to the government’s policy of transitional measures taken for the closed domestic coal mines. For the exploration of oil, gas, metals, and coal, JOGMEC directly conducts initial explorations that are risky for private companies, aiming to hand over its exploration interests to Japanese companies at a later stage.

When it comes to geothermal energy, which is attracting attention as one of the renewable energy source, JOGMEC provides financial and technical support for promoting the utilization of geothermal energy in Japan. JOGMEC is also engaged in resource stockpiling-related areas in preparation for possible supply disruption, setting up a structure that manages the national stockpiles of oil, oil gas, and rare metals, and it releases the stockpiles in an agile manner during the event of an emergency.

Looking out over the world, the situation surrounding resources and energy is undergoing major upheaval such as the arrival of the EV age and dramat ic advances in IT technology. Meanwhile, the global economy faces uncertainty in

terms of geopolitical instability, an increasingly complex international situation and so on. Under such circumstances, for Japan, which relies on imports to provide most of its resources and energy, it is essential to secure stable and economical supplies.

The new five-year medium-term target period (the 4th term) has started from the year 2018. While playing a part of government’s resource diplomacy through strengthening relations with resource-rich countries, more than ever, JOGMEC is committed to offering risk money to support Japanese private companies acquiring resource interests, enriching functions as a center of expertise and information on resources and energy, and enhancing technical and human resource development functions.

JOGMEC’s mission of securing stable supply of Japan’s resources and energy is becoming more and more important. To efficiently advance a broad range of activities, we will not only reinforce our unity as the organization, but also actively seek cooperation with the Government of Japan, the governments of resource -r ich countr ies , government agencies , and domest ic and international corporations. Then we will build a flexible structure for conducting the needed activities. We at JOGMEC continue to make greater efforts. I deeply appreciate your continuous understanding and support for our activities.

Tetsuhiro Hosono President

Oil

99.7% 97.6%

Natural gas

Copper ore

100%

Coal

99.4%

Dependence of natural resources on imports

JOGMEC’s partners

Eight multi-faced activities

JOGMEC is a governmental organization that collaborates with governmental agencies and companies both at home and abroad with a view to secure stable supplies of natural resources and energy for Japan, while contributing to the development of resources and energy business worldwide as the duty of a large energy-consuming nation.

About us

It is essential to secure stable supplies of resources since they are the driving force of modern life and economic activities for every nation.Japan may face serious threats to securing resources as competition for resources intensifies, because it largely depends on imports. Therefore, Japan needs to steadily secure resources for people’s lives and economic development.

Flow of natural resource development

JOGMEC’s 4 areas of responsibilityTo contribute to dynamic development of natural resources and energy, JOGMEC’s main areas of responsibility are defined as:

Survey Exploration Development Production

Stockpiling

Supply

Foreign governments and companiesMutually cooperative and beneficial relationship is

established.

Japanese publicJOGMEC contributes to the stable supply of natural resources and energy, indispensable for the national livelihoods.

Japanese companiesJOGMEC joins hands with Japanese private companies in technological and financial

areas.

JapanJOGMEC implements projects in line with the government’s policies.

❶

❷

❸

Technological development

❹

Environmental protection

❻

National stockpiling

❺

International cooperation and resource diplomacy

❼

Collection and provision of information

❽

MetalsOil and natural gas Coal Geothermal

Importance of securing resources in Japan

JOGMEC joins hands with Japanese private companies in each of these areas at various phases of projects through geological surveys, technological development, financial support, stockpiling, environmental protection, and gathering and provision of information, to name just a few. International cooperation and collaboration is also at the forefront of JOGMEC’s activities, which are designed to contribute to the stable supply of natural resources and energy, indispensable for the national livelihoods.

Environmentalprotection

Geological survey

Survey for marine resource development

Financial support for Japanese companies

4 5

76

Oil and natural gas

　ⒸAnadarko Petroleum Corporation

Geological and geophysical surveysJOGMEC is conducting geological and geophysical surveys, evaluation studies of oil/gas fields, feasibility studies, etc. in countries where new exploration and development projects of oil and natural gas are expected. Through these surveys and studies, JOGMEC builds cooperative relationships with resource-rich countries, and also encourages Japanese companies to participate in exploration and development projects by providing the survey results and priority negotiation rights acquired through the survey process.JOGMEC also conducts geological and geophysical surveys in Japan, since domestic resources could become the most secure supply sources.

Oil and natural gas

To ensure stable supplies of oil and natural gas, JOGMEC is contributing in a wide variety of areas including survey, research, development and production.

Strengthening mutually beneficial relationships with resource-rich countries is essential in developing oil and natural gas resources. As a governmental organization, JOGMEC conducts various projects to support Japan’s resource diplomacy, collaborating with national oil companies, and providing advanced technical training for experts such as geologists and geophysicists from producing countries.While conducting surveys and studies with resource-rich countries, will confirm possible presence of resources, JOGMEC also supports Japanese companies financially in the exploration, development and production stages by providing equity capital and liability guarantees.JOGMEC is engaged in a wide range of activities to increase recoverable resources through advancement of state of the art technological development, taking on technological and challenges in methane hydrate, GTL and other new area of resources and energy, with emphasis on the preservation of environment.In the oil & LPG stockpiling system commissioned by the government, JOGMEC has been committed to building reliable and safe stockpiles to ensure the Japanese people with smooth supply in the unlikely event of an energy crisis.

Bolshetirsky license block in Eastern Siberia

Overseas geological and geophysical surveysOverseas geological and geophysical surveys are conducted to evaluate the potential of prospective area, on t h e r e q u e s t f r o m f o r e i g n governments and national oil companies or on the advice of JOGMEC. Through these surveys,

we build cooperative relationships with the host country. JOGMEC encourages the participation of Japanese companies through the surveys. Since 1979, 64 overseas geological surveys have been conducted in 28 countries.

3D seismic survey vessel “Shigen” has a total tonnage of around 10,000 tons.

Domestic oil and gas survey programOil and natural gas resource surveys in Japan are a part of Japan’s national policy to ensure energy security. JOGMEC conducts seismic surveys and exploratory drilling to gather fundamental data and facilitate further exploration activities.In line with the global shift of offshore exploration toward the depth of

2,000 meters or above, JOGMEC is commissioned to opera te a government owned survey vessel “Shigen” and conduct three-dimensional seismic surveys. This vessel enables JOGMEC to identify three-dimensional underground structures over a wider area with more accuracy.

JOGMEC transferred a joint exploration project in Eastern Siberia to 2 Japanese companies . The project had been conducted by JOGMEC unde r the scheme o f overseas geological and geophysical survey. After the takeover, JOGMEC provides equity capital to the project for further exploration activity.

JOGMEC and its predecessor JNOC have conducted a geological and geophysical survey project in Greenland since 1989. Greenland Petroleum Exploration Co., was established to implement the priority negotiation rights acquired through the survey project, and in 2013 it was awarded two exploration areas in the northeastern offshore Greenland.

Recent achievementsTransfer of a geological and geophysical survey project in Eastern Siberia to Japanese companies

Acquired exploration sites in Greenland

Geological and geophysical survey project in KenyaEastern Africa has a potential to evolve into a new oil producing region. JOGMEC has been carrying out an overseas geological and geophysical survey project in onshore Kenya with National Oil Corporation of Kenya (NOCK) since 2012.

8 9

＊FMS：Flocculation and Magnetic-Separation

CO2-EOR(Rang Dong oil field, Vietnam)

Facility of Rang Dong Oil Field in off shore Vietnam, operated by Japan VietnamPetroleum Company 《Source: JX Nippon Oil & Gas Exploration Corporation》

FMS undergoing performance verification tests on offshore platform in Cantarell Oil Field, Mexico

JOGMEC is conducting research and development on “CO2EOR” (enhanced oil recovery by injecting carbon dioxide); this is one of the technologies of EOR, and improves the oil recovery. By combining CO2EOR with a CCS (Carbon Dioxide Capture & Storage) technology to separate, recover and store in the ground the CO2 emitted from power plants, factories and other industrial plants, JOGMEC aims to establish environmental protection technologies that also increase revenue. JOGMEC is carrying out joint R&D with national oil companies of Abu Dhabi and Vietnam.

JOGMEC has been developing FMS technology since 2009, at the request of the Mexican national oil company, PEMEX.In FMS technology, oil and solids contained in produced water are flocculated using magnetic powder and flocculating agent, and the aggregate is then separated from water by using a strong magnet to attract it. FMS equipment is compact yet the process is rapid, and the quality of processed water is high. As a new oil production technology of Japan, FMS attracts global attention.

CO2EOR technology

FMS technology＊

Examples

Technological developmentIt is essential to improve various technologies for exploration, development and production of oil and gas, not only to conduct exploration and development projects more efficiently but also to secure more resources. As a core organization for oil and gas development technology in Japan, JOGMEC is continuously accumulating technology, technically supporting operations, conducting joint research with oil and gas-producing countries, supporting new projects, conducting expert training programs for geologist and geophysicist and so forth.

Exploration and development technology

Environmental protection technology

Development of exploration technologies plays an essential role in securing future oil and gas production. JOGMEC promotes research and development of exploration technology for oil, gas and non-conventional resources such as shale gas/oil and methane hydrate. Also, JOGMEC carries out technological assessment of exploration and development projects by Japanese companies world widely, joint studies with NOCs, technological trend surveys and human-resource-development related activities.

Minimizing the environmental load is an unavoidable challenge in oil and gas development. For example, CO2 reduction technology and technologies related to the treatment and reuse of water trapped in underground formations that is brought to the surface along with oil or gas production (produced water) are attracting attention.

Pore structure of shale sample, obtained by sequential 2D cross-section observation using an electron microscope (left: 3D visualization of shale, right: red and blue represent organic matters and pores, respectively).

《Source: Research Consortium for Methane Hydrate Resources in Japan》＊ Depressurization method: A method to dissociate methane hydrate and produce

methane gas by reducing the pore pressure in methane hydrate-bearing layers, which is in a stable state at low temperature and high pressure.

Methane gas combustion during production test

JOGMEC is developing a reservoir monitoring approach using a permanent seismic source ACROSS (Accurately Controlled, Routinely Operated Signal System). It produces continuous, highly accurate seismic energy to extract tiny temporal change at underground oil/gas layers caused by production and injection. Therefore, it is expected to provide valuable information for EOR (enhanced oil recovery) evaluation and for improving shale gas productivity.

GTL (Gas to Liquids) is a technology that converts natural gas to liquid fuel such as clean kerosene and gas oil. Since the produced GTL fuel does not contain sulfur and aromatics, it attracts attention as a clean fuel.JOGMEC has co-developed the JAPAN-GTL technology with six Japanese companies. It enables to use CO2 as a raw material for GTL and it does not require expensive oxygen production equipment. Three years of verification tests were successfully completed in 2011, and JOGMEC is currently discussing the introduction of JAPAN-GTL with the national oil companies of Turkmenistan and Mozambique.

Methane hydrate, also known as “fiery ice,” is an ice-like substance composed of methane gas and water. It is abundant in low-temperature, high-pressure environments such as permafrost and layers under deep ocean floors.In line with Japan's Methane Hydrate R&D Program of METI in 2001, JOGMEC is conducting research on resource assessments, field tests, etc. as a member of the Research Consortium for Methane Hydrate Resources in Japan.Based on a detailed survey conducted in eastern Nankai Trough, a zone with concentrated methane hydrate was found in a reservoir consisting of alternating layers of sand and mud, and the methane gas resource was estimated for the offshore area. After conducting onshore production tests in Canada by the depressurization method*, JOGMEC conducted the world’s first offshore production test in March 2013, successfully producing roughly 120,000m3 of methane gas in six days.

For the commercial development of shale gas, it is essential to utilize horizontal well dr illing and hydraulic f rac tur ing technologies as the gas is stored in nano-scale pore spaces in shale rocks. To understand the gas storage and blow in the shale rocks and efficiency of the hydraulic fracturing, fundamental R&D is still required.JOGMEC has started a joint research project with Mitsubishi Corporation and Encana Corporation to contribute to their shale gas operation in Canada. In the joint research, JOGMEC has been conducting, for the purpose of the optimization of shale gas development, laboratory experiments and seismic data interpretation that is developed through a fractured reservoir characterization.

ACROSS seismic source, a leading-edge reservoir monitoring approach

JAPAN-GTL technology

Technology for developing methane hydrate resources

Optimization of shale gas development

Examples

ACROSS seismic source

Oil and natural gas

Removalof sulfur

Synthetic gasproduction

FTsynthesis

UpgradingNatural gas（CO2 content: 20%）

No need to remove CO2 contained in natural gasNo need for oxygen production plant

Enables effective use of gas fields left undevelopeddue to high CO2 content

Synthetic gas productionFT synthesisUpgrading

Carbon dioxide/steam reformationSlurry bed + Co catalyst Fixed bed + Pt catalyst

10 11

Total number of participants (between 1989 and the end of October, 2016)

Participants of regular course

Technical solutions project Technical training programs for overseas participantsIn light of increasing technical difficulties of oil and gas developments, Exploration and Production projects need a wide range of new technologies. JOGMEC is ready to answer this growing demand. Technical solutions project provides advanced and cutting-edge technologies (seeds) of Japanese companies to solve technical problems (needs) of oil and gas-producing countries. JOGMEC’s prime task is to promptly grasp technical

As one of the largest oil and gas importers in the world, Japan strengthens cooperative relationships with oil and gas-producing countries by contributing to human resources development in these countries. JOGMEC invites oil and gas experts from these countries and provides various training programs including regular courses (exploration geology, geophysics, reservoir engineering and drilling management) over a wide range extending from basics to specialized technologies.

These courses consist of technical lectures, workshops, and field trips to impart practical skills and the latest knowledge. They are introduced to Japanese culture and language through orientation sessions and later regional trips to get acquainted with its history.Since its inception in 1989, 3,417 participants from 48 countries have been invited as of October,2016. Many of our “Alumni” are now in responsible positions in ministries and national oil companies. Both JOGMEC and the participating countries appreciate the training programs as good opportunity for human networking as well as for technology transfer. Several joint projects have been initiated by JOGMEC and the participating countries as a result of cooperative relationships and mutual understanding fostered through the program.

Technology Development & Demonstration

JOGMEC will continue to propose technological development packages that utilize the high-end technologies of Japanese companies, in addition to conventional technologies.

Technical lecture

JOGMEC hosts “JOGMEC Techno Forum” which provides unique opportunities to discuss technical challenges in oil and gas industry and discover Japanese innovative technologies applicable to needs of oil and gas-producing countries. The first forum was launched in May 2013, attracting many participants from a wide range of Japanese industries and several NOCs/IOCs. We will host this forum annually to support interactions between Japanese companies and oil and gas-producing countries.

JOGMEC Techno Forum connects the needs of oil-and gas-producing countries with Japanese technology

Exhibition at JOGMEC Techno Forum

Oil and natural gas

Participants from Mozambique

needs of the oil and gas-producing countries to propose the right technical solutions for their needs. As a foundation of this project, JOGMEC actively continues technological development with a wide range of Japanese industries. JOGMEC customizes the Japanese high-end technologies, in addition to conventional technologies, to make a suitable technical solutions package for oil and gas-producing country.

Papua New GuineaIndonesia

Kazakhstan

Thailand Vietnam

Malaysia

Cambodia

MyanmarBangladesh

Iran

EgyptLibyaAlgeria

NigeriaSudan

Iraq

Syria

Turkey

Qatar

Kuwait

Angola

Democratic Republicof Congo

Uganda

Kenya

Ghana

Tanzania

OmanYemen

SaudiArabia

Azerbaijan

Turkmenistan

Russia

Mexico

BrazilPeru

ColumbiaVenezuela

China

UAE

Gabon

Uzbekistan

Brunei

Philippines

EquatorialGuinea

Ecuador

48 countries3,417 participants

Invited countries

Mozambique

Mongolia

Seychelles

1

2

43

1

2

5

3

46

75

8

10 9

12 13

Financial assistance to Japanese companies Resource stockpilingOil and natural gas exploration and production projects (E&P projects) require huge amounts of investment. JOGMEC provides equity capital to Japanese companies for oil and natural gas E&P projects to mitigate the risks for them. After the commercial discovery of oil or gas reserves, JOGMEC also provides liability guarantees for oil and natural gas E&P projects conducted Japanese companies to support their finance.

Japan depends on imports for virtually all of its energy resources, despite being the fifth largest consumer of energy in the world.* Thus, people’s lives and the economy would be disrupted in the event of unforeseeable circumstances. To prepare for disruption in the supply of energy resources, JOGMEC is promoting the stockpiling of petroleum and petroleum gas (LP gas) at the request of the Japanese government.

Equity capitalStockpiling system

Stockpiling bases

Liability guaranteesTo launch oil and natural gas exploration and development projects by a Japanese company, it usually establishes a project company to operate each project. The project company raises funds for exploration by issuing new stock, and, JOGMEC provides equity capital by purchasing such stock. After a decision for commercial development is made, JOGMEC’s policy is to divest its capital holdings.

Stockpiling of petroleum in japan is performed in three programs. First, there is national stockpiling, which is run directly by Japanese government. Second, there is private stockpiling, which by law must be performed by private oil companies. Third, there are stockpiles held jointly in collaboration with oil-producing nations. The three programs have a combined stockpile of approximately 80 million kiloliters of petroleum (equivalent to approximately 207 days of domestic consumption, as of the end of Match 2016).Stockpiling of petroleum gas (LP gas) in japan is being promoted through two programs: the national stockpiling program which is directly controlled by the government, and the private-sector stockpiling program which is implemented by private companies under obligation by law. Two programs have a combined stockpile of approximately 2.8 million tons of LP gas (equivalent to approximately 103 days of import volume, as of the end of March 2016).

JOGMEC provides liability guarantees to Japanese companies for their finance for oil and natural gas development projects or asset purchases (purchase of oil/gas fields). JOGMEC also provides completion guarantees for projects.

Oceania is expected to be the largest LNG supply area for the East Asian market. JOGMEC is providing equity capital and liability guarantees to multiple LNG development projects in Australia and Papua New Gu inea i n wh ich Japanese compan ies a r e participating.

Huge gas fields have been discovered in offshore Mozambique, where a JOGMEC-associated Japanese company is participating in an exploration project. This area is expected to contribute to a stable energy supply for Japan as a major LNG supply base.

Increasing support to LNG projects in Oceania Progress of LNG projects in Mozambique

Recent examples of our support

National stockpile Private-sector stockpile stockpiles held jointly with oil-producing nations

Petroleum 47.8 million KL112 days

31.3 million KL81 days

1.3 million KL4 days

LP gas 1,150 thousand tons40.8 days

1,738 thousand tons61.7 days -

1 640 Tomakomai2 570 Mutsuogawara3 450 Akita4 175 Kuji5 340 Fukui6 150 Kikuma7 560 Shirashima8 440 Kamigotou9 500 Shibushi10 175 Kushikino

Petroleum and LP gas stockpiling system

Stockpiling quantity in Japan

Stockpiling capacity by base

*Source: BP Statistical Review of World Energy (June 2016)

1 200 Kamisu2 250 Nanao3 400 Kurashiki4 450 Namikata5 200 Fukushima

（Unit: thousand tons）

（Unit: ten thousand KL）

（as of the end of March 2016）

Petroleum LP gas

Oil and natural gas

Ⓒ Anadarko Petroleum CorporationImage courtesy of INPEX CORPORATION

National petroleumstockpiling

Private-sectorpetroleum stockpiling

stockpiles heldjointly with

oil-producing nations

Stockpiling byprivate companies

Inventory in tanksloaned to

oil-producing nations

National LP gasstockpiling

Private-sector LP gasstockpiling

LP gasstockpiling

Petroleumstockpiling

Stockpiling by leasingprivate-sector tanks

National petroleumstockpiling bases(10 bases)

Stockpiling by privatecompanies

National LP gas stockpilingbases(5 bases）

14 15

Stockpiling methods StockpilingFor the national petroleum stockpiling bases, different stockpiling methods are employed depending on the characteristics of each site. National LP gas stockpiling bases are required by law to be constructed adjacent to private LP gas

importing bases, to reduce costs by effectively using existing facilities and commissioning operations and so on. Suitable stockpiling methods are selected for each site, as with national petroleum stockpiling bases.

Petroleum stockpiling methods

Wide variety of events

LP gas stockpiling methods

This is the most commonly used stockpiling method at national petroleum stockpiling bases. It is a common type of petroleum storage tank and has a proven track record including safety performance and advantages such as relatively low construction cost.

In order to improve the safety and reliability of national stockpile bases and reduce the cost of the national stockpiling programs, JOGMEC is carrying out various surveys and research on stockpiling technology, including preservation of petroleum quality, maintenance of tanks, etc., and studies on safety and disaster prevention.

At stockpile bases, we strictly monitor compliance with relevant laws including the Fire Service Act, Act on the Prevention of Disaster in Petroleum Industrial Complexes and Other Petroleum Facilities, and the High Pressure Gas Safety Law, to ensure safety and prevent disasters. We also strictly monitor operational management.

The member countries of the International Energy Agency (IEA) are aiming to establish energy security centered on petroleum and a stable energy demand and supply structure for the medium and long term. For Japan, which relies on imports for most of its energy supply, cooperation with the IEA is extremely important.

In cooperation and collaboration with the IEA, JOGMEC will respond to emergency situations by appropriately combining measures such as releasing petroleum from the stockpile and suppressing demand and taking into account such factors as the degree and expected duration of supply shortage and the domestic demand and supply trends.

In t h i s s t ockp i l ing me thod , an underground rock cavern is excavated and used to store petroleum. This type of tank has advantages of low risk petroleum leakage and is resistant to natural disasters such as earthquake, lightning, etc. In addition, there is minimal effect on the surrounding scenery because the storage facility requires only limited space for incidental facilities.

In this stockpiling method, LP gas, which is liquefied by cooling, is stored at low temperature in a cylindrical double-shell tank with a flat bottom. The double-shell tank consists of an inner tank and an outer tank is made of low temperature resistant steel, and the space between the tanks is filled with insulator　(cold insulator). The principle is the same as that of a thermos flask. This is the most common storage method used at LP gas importing bases.

In this system, LP gas at normal temperature is sealed in a rock cavern by groundwater pressure. The storage tank is installed underground at a depth where the groundwater pressure is slightly higher than the pressure of the LP gas, preventing leakage of the gas to the outside. Water is supplied to the bedrock from water-sealing tunnels and water-sealing boring in order to stabilize the groundwater pressure.

In this stockpiling method, most of the tank body is buried in the ground. The risk of petroleum leakage or penetration into the ground is low, and the structure has excellent earthquake resistance. This type of tank has approximately three times the capacity of an aboveground tank for the same land area, because the tank diameter and depth of the tank can be made larger.

In this stockpiling method, storage facilities are installed offshore to utilize the available ocean space. Each “storage vessel,” which has a double hull structure, is set afloat on the sea and surrounded by double petroleum fences to provide maximum protection against petroleum leakage or diffusion.

Aboveground tank system

JOGMEC provides loans to private companies with stockpiling obligations to finance the purchasing of petroleum and LP gas for stockpiling.

Providing loans to finance purchasing

Technological development

Safety management of stockpile bases

International cooperation

Releasing petroleum in emergency situations

Water-sealed type underground rock cavern tank system

On-ground low-temperature tank system Water-sealed type underground rock cavern tank system

In-ground tank system

Floating tank system

Structure of On-ground low-temperature tank system

Structure of underground rock cavern tank system

Water-seal boringWater-seal water

Groundwater pressure

Water-seal tunnel

Underground water level

LP gas

Shibushi National Petroleum Stockpiling Bases Structure of the in-ground tank

system（Akita National Petroleum Stockpiling Bases）

Inside of a rock cavern tank（Kushikino National Petroleum Stockpiling Bases）

Shirashima Nat ional Petroleum Stockpiling Bases has eight “storage vessels” floating on the sea.

Emergency release drill

Comprehensive disaster drill

Monthly briefings on oil and gas business trends

JOGMEC-TRC Week

International seminars Overseas exhibitions

Guard basin (discharge tank) for checking the discharge water is not contaminated

Full view of Kamisu National LP Gas Stockpiling Bases

Stockpiling tunnel

Collection and provision of informationAs an organization that gathers, analyzes and provides information, JOGMEC is constantly carrying out research on worldwide resources and energy trends, tax systems in oil and natural gas producing countries, published information on new mining areas, the trends of resource development companies, and so on. We provide information in a timely manner through our websites and briefing sessions.

Oil and natural gas

Inner tank

InsulatorNitrogen gas

Liquidlayer

Vapourlayer

Outer tank

Airform chamber

Initial fire extinguisherfacility

Landfill/earthfilllayer

Floating roofdrainage unit

Bottom plate

Sidewall

Rock layer

Rain discharge pump

Payout pumpBottom drain pump

Groundwaterlifting pump

Rock anchorDouble deck floating roof

16

Metals

16 17

Geological surveyRecent rise of emerging economies coupled with hikes in metal prices has made access to natural resources extremely competitive, especially at the development phase. Consequently, JOGMEC from time to time participates in risky primary exploration projects with NOCs and private companies aiming to hand over its exploration interests to Japanese companies at a later stage.

JOGMEC conducted an exploration survey in the Waterberg district in South Africa and confirmed the existence of Bushveld Complex, which contains platinum group metals deposits, and discovered the mineralization of platinum group metals. JOGMEC confirmed approximately 693 tons o f precious metals such as platinum as estimated metal resources.

JOGMEC participated in an explora tion pro ject in the Frontera district, which was in the initial exploration stage, and identified the possibility of existence of mineable copper and gold deposits. JOGMEC has transferred its interests in the project to a Japanese private company, accelerating the shift from survey to development.

Discovery of platinum group metals deposits by JV survey in South Africa

Transfer of a world-class mining to Japanese private company

Major recent achievements

“ S Q U I T E M ” i s t h e t r a n s i e n t electromagnetics (TEM) system using the high temperature superconductive quantum interface device (HT SQUID) magne t ome t e r s . JOGMEC has developed “SQUITEM”, which increases the depth and accuracy of exploration.

SQUITEM: Exploration method for deep underground

JOGMEC received the Mining J o u r n a l O u t s t a n d i n g Achievement Awards 2012 for this discovery.

World-class copper and gold deposits discovered in the region between Chile and Argentina.

JOGMEC actively carries out joint mineral exploration with overseas national corporations and non-ferrous metal companies. For projects with promising results, JOGMEC’s share of interests may be transferred to Japanese companies with reduced initial exploration risk. Principle exploration targets

are base metals and rare metals. Target areas are selected based upon geological potential, mining investment environment, including safety and Japanese companies’ interest.

Joint venture survey

Metals

JOGMEC seeks to ensure a stable supply of metal resources which are indispensable for Japanese industry, and contributes to a wide range of fields including surveying, exploration, development, production and stockpiling to recycling and environmental protection.While implementing and assisting geological surveys in prospective areas for metal resources, JOGMEC also supports exploration and development by Japanese companies by providing equity capital and liability guarantees. JOGMEC also actively carries out technological development and provides technical support in each stage of metal resource development, and operates national stockpiling programs as a safeguard against disruptions to the supply of rare metals, which are unevenly distributed by region. In addition, JOGMEC is working on environmental protection including projects for mine pollution prevention and associated project development, as well as proactively providing related technology and knowledge to resource-rich countries.

JOGMEC JV Partners

METIBudget

Implementationof survey

Transfer

Identification of projects andtechnical cooperation

Providing survey fieldsJoint exploration

Securing of a stable supply to Japan Economic and technical cooperationto the partner country

Acquisition ofsurvey results

Exploration and development

Production

Flow of JV survey implementation system

Japanese corporations（including overseas subsidiaries）

TEM measurement device (SQUITEM) No.3

18 19

Survey of sea-floor polymetallic sulphides

Marine resource research vessel “Hakurei”

：

Minami Torishima (Marcus Island)

Approximately 600 km

Exclusive Economic Zone

Seamounts designated as exploration areas

Water depth (m)

:

Location map of exploration areas for cobalt-rich crusts

Experiment at the site

Technological developmentAs mineral exploration field move into deeper and more remote areas of the world, more efficient exploration is needed. JOGMEC is challenging R&D of mineral exploration technology and metal resource recycling technology and improving metal extraction technology. JOGMEC is also carrying out R&D for promoting ocean metal resources development.

Development of exploration and production technology

Development of metal recycling and refining technology

Verification of lithium extraction technology in Bolivia

Exploration of metallic mineral ore deposits using remote sensing technology

Development of hydrometallurgical technology using bioleaching, in Chile

Development of technology for recovering rare metals from waste small electronic and electric appliances

JOGMEC is currently performing experiment and evaluation to establish a technology for extracting lithium from the Uyuni Salt Lake in Bolivia. JOGMEC has invited Bolivian experts to Japan to participate in the experiment, JOGMEC is helping to create the lithium industry envisioned by the Bolivian government as well as building trusty relationship between Japan and Bolivia.

JOGMEC has developed mineral exploration technologies to identify hydrothermal alternation zone by using optical sensors data, and also realized geology discrimination technologies to promote the efficient mineral exploration in vegetated areas by using Synthetic Aperture Radar data. JOGMEC is developing more accurate technologies for identification of mineralization by using data from hyper-spectral image sensors that can measure 185 or more spectral bands.

Bioleaching is a technology to enhance the leaching of metal ions by using the action of microorganisms, and is used in the leaching process in a hydrometallurgical system. JOGMEC is performing search and evaluation of microorganisms and column leaching tests and, based on the test data, carrying out validation tests at a pilot plant in Chile, using locally-produced copper ore.

Small electronic and electric appliances contain base metals such as copper and zinc, precious metals including gold, as well as rare metals such as tantalum and cobalt. JOGMEC has been carrying out tests for recovering these metals from waste small electronic and electrical appliances and fact-finding surveys, as well as basic tests for establishing the flow for recovering rare metals. Since 2012, JOGMEC has also been developing recycling technology for recovering tantalum and cobalt.

Exploration of marine mineral resources and technological development

Principal marine mineral resources

These are polymetallic sulphide deposits containing copper, zinc, gold, silver, etc., which are formed when metallic elements contained in the hydrothermal venting out of the sea-floor deposit form chimney and mounds.

Cobalt-rich ferromanganese crusts are similar to manganese nodules and consist of iron and manganese oxides. They cover the bed rock on the slopes and tops of seamounts, with thicknesses ranging from several millimeters to several tens of centimeters. The cobalt content of cobalt-rich crusts is roughly three times that of manganese nodules, and cobalt-rich ferromanganese crusts also contain small amounts of platinum.

Manganese nodules are lumps of iron and manganese oxides of roughly 2 to 15 centimeters in diameter, which are half-buried on flat ocean floors at depths between 4,000 and 6,000 meters. They contain useful metals such as nickel, copper and cobalt.

Sea-floor polymetallic sulphides

Cobalt-rich ferromanganese crusts

Manganese nodules

Manganese nodules, cobalt-rich ferromanganese crusts and sea-floor hydrothermal deposits lie on the deep sea floor, and those are greatest unexploited mineral resources on the earth. JOGMEC is actively surveying deep-sea-floor to secure stable supply of mineral resources to Japan.

Survey of sea-floor polymetallic sulphides

Cobalt-rich ferromanganese crust survey Manganese nodule survey

From 1985 to 2003, JOGMEC carried out surveys for polymetallic sulphides in the East Pacific Rise, the Okinawa Trough and the Izu-Bonin back-arc basin. JOGMEC has been performing resource assessment surveys since 2008. In 2012, JOGMEC conducted a deep drilling survey of sea-floor polymetallic sulphides in the Okinawa Trough using the marine resource research vessel “Hakurei,” and discovered a new, deeper ore body which could turn out to be a large-scale deposit. In addition, JOGMEC successfully carried out the world’s first crawl and mining test using a small test mining machine and has started to develop actual machines.

Since 1987, JOGMEC has been conducting resource assessment surveys for cobalt-rich ferromanganese crusts in the Area in the central to north-west Pacific. Based on the survey results and after screening by the International Seabed Authority, JOGMEC acquired exclusive exploration rights to an area (3000 km2) in international waters 600 km southeast of Minami Torishima (Marcus Island). We plan to commence a full-scale exploration including R&D of production technology that will take 15 years.

JOGMEC carried out resource distribution surveys and resource assessment surveys from 1975 to 1996. Based on the results, JOGMEC acquired a manganese nodule exploration area of 75,000 km2 in the ocean southeast of Hawaii in December 1987, pursuant to the United Nations Convention on the Law of the Sea. JOGMEC resumed surveys in this exploration area in 2011.

18

Waste small electronic and electrical appliances（image）

Metals

ASTER short wavelength infrared imageAltered rocks are displayed in pink and green.

ASTER visible and near-infrared imageHigh-resolution image

ASTER spectral ratioing imageMinerals are displayed in different colors.

Case of image analysis

Pilot plant in ChileExperiment at the site

20 21

The confluence of the polluted Matsukawa River and Kitakami River（at the time of closure of the Matsuo Mine）

The confluence today

Permeable reactive barrier Artificial wetland

Conceptual diagram of passive treatment technology

Seminars held on mine pollution control

Technical support to the governments of metal resource-producing countriesUtilizing its experience and technical know-how on mine pollution control

developed over the years, JOGMEC has been providing information and

technical support to resource-producing countries in recent years through

Strengthening relationships with resource-producing countries

Dispatching advisors on mine pollution policies to Peru

Holding seminars and other programsJOGMEC signed a memorandum of understanding (MOU) with Peru in December 2008 concerning the dispatching of an expert on preventive policy for mine pollution. In 2013, JOGMEC newly signed MOUs in the field of mine pollution control with countries such as Cambodia and Laos. Thus, JOGMEC’s activities to support mine pollution control are steadily spreading around the world.

At the request of the Peruvian government, which highly evaluates JOGMEC’s efforts in mine pollution control projects, JOGMEC signed an MOU on the dispatch of advisors on mine environment policies in 2008 and has been dispatching experts on mine environment to Peru since 2009.In addition, JOGMEC has been providing technical support to the engineers of the Ministry of Energy and Mines since 2012, by conducting water systems surveys in the field as the OJT (technical transfer).

To strengthen the cooperative relationships with resource-producing countries in the field of mine pollution control, JOGMEC is providing various technical support such as holding seminars on mine pollution control and hosting observation teams and trainees in Japan.

Technical transfer to Peruvian engineers

Signing of MOU（Peru）

Country Date No. of Participants Principal participating agencies

Peru 2016.2 110 Ministry of Energy and Mines

Bolivia 2011.11 192 Ministry of Mining and Metallurgy and local governments

Chile 2010.6 65 SERNAGEOMIN（National Service of Geology and Mining）

Vietnam 2012.8 62 General Department of Geology and MineralsMinistry of Natural Resources and Environment

China 2008.6 40 China Nonferrous Metals Industry Association

Cambodia 2012.2 96 General Department of Mineral Resources,Ministry of Industry, Mines and Energy

Laos 2015.11 25 Ministry of Energy and Mines

Myanmar 2013.9 170 Ministry of Mines

South Africa 2014.2 Approx. 105

Government officials from South Africa, Angola, Botswana, Congo, Gabon, Lesotho, Madagascar, Malawi, Mozambique, Namibia, Niger, Tanzania, Zambia, Zimbabwe

Zambia 2013.6 90 Ministry of Mines, Energy and Water Development

Madagascar 2014.8 124Ministère auprès de La Présidence chargé des Mines et du pétrole and University of Antananarivo

Botswana 2015.10 128 Ministry of Minerals, Energy and Water Resources

Zimbabwe 2016.3 125 Ministry of Mines & Mining Development

overseas seminars on mine pollution control, dispatching of advisors, etc.,

thereby contributing to environment-friendly and sustainable development of

mine and strengthening relationships with resource-producing countries.

Environmental protectionMines greatly benefit the countries and local societies in various ways, but can also cause environmental problems such as mine pollution that affects seriously to the lives of local residents. JOGMEC’s environmental protection activities mainly consist of sharing information and providing technical and financial supports to local governments, entities seeking to prevent mine pollution, and governments of metal resource-producing countries.

JOGMEC’s activities in Japan: at the abandoned Matsuo Mine

Technological development: Survey and research related to passive treatment technology

Japan used to be a leading mining country but now has nearly 5,000 abandoned mines, and mine pollution such as water pollution has occurred at about 450 sites of them. Therefore, JOGMEC has been working mine pollution control since 1973.JOGMEC was commissioned by the Iwate prefectural government to operate and manage a water treatment facility at the abandoned Matsuo Mine, which used to be the largest sulfur mine in Asia. The facility has the largest water treatment capacity of acid mine drainage from abandoned mines in Japan, and commenced

Passive treatment is an almost maintenance-free water treatment technology. This technology can greatly reduce the cost of treatment of mine drainage. The advantage of passive treatment technology is that it fully uses the natural cleaning function of microorganisms to precipitate the heavy metals, which are then easily removed or absorbed by vegetation.JOGMEC is carrying out various tests aiming to introduce passive treatment on site in the near future.

Metals

full-scale operation in 1982. Since then, we have been continued neutralization of highly-acidic mine drainage, which contains toxic heavy metals such as iron and arsenic, at a rate of 18 tons per minute. Sludge are separated and deposited at waste dam and the clear supernatant liquid is discharged. In addition, we have been restoring and maintaining the scenery of the region through measures such as maintaining the sedimentation dam and providing soil cover and vegetation over the closed open-pit, thereby protecting the clean water of Kitakami River for over 30 years.

Seminar on mine environment in MyanmarImpermeable layer

Sedimentdam

Treatedwater

RiversPermeablereactivebarrierPolluted

seepage water

Abandonedmine

Minedrainage

Treatedwater

Rivers

Sedimentationtank

Aerobicwetland

Anaerobicwetland

22 23

Financial support for Japanese companies Rare metals stockpiling

Collection and provision of information

JOGMEC provides funds required for metal resource exploration projects in the form of equity support or loan, to assist Japanese companies in expanding and expediting exploration, leading to the faster transition to mine development stages. JOGMEC also provides liability guarantees for development funds loaned by private financial institutions, in order to ensure the smooth procurement of enormous investment funds. The funds support by JOGMEC can be provided to the projects through participation of Japanese companies.

Rare metals, which are widely used in applications ranging from automobiles, electronics and aviation to IT and environmental protection, are an important and vital resource for Japanese industry. JOGMEC has been promoting a national rare metal stockpiling project as a safeguard against short-term supply interruptions of rare metals and to stabilize the Japanese economy.

The world situation concerning metal resource development is changing rapidly, due to the expanding demand for metals, increasing competition to acquire mining areas, and the impact of tighter environmental regulations on mining management. Accordingly, the value of information is also increasing. JOGMEC collects, studies and analyzes information on international trends in mining, and distributes such information through various media, lecture meetings and websites, thereby assisting Japanese companies.

Equity capital, loan and investment system for acquisition of assets Liability guarantee

Metal resources investment seminar

To enhance and expedite high-risk mineral exploration, JOGMEC provides

the necessary funds in the form of equity support or loan. Since 2010, a

scheme of equity participation was also started to assist Japanese

companies for the acquisition of mining interests in the development and

production stages.

The rare metals stockpiling system was established in 1983 as a cooperative system between the government and private sector, to ensure natural resource security and economic security. Since then JOGMEC has been engaged in the national rare metal stockpiling project. Stockpiled rare metals will be released in response to interruption of supply from overseas or shortage in domestic supply.

National stockpile warehouse

Projects in the development stage require massive amount of investment,

ranging from several tens of millions to more than one billion dollars.

JOGMEC provides liability guarantees for development funds loaned by

private financial institutions to Japanese companies, in order to ensure the

smooth procurement of development funds and to reduce the business

risks and country risks associated with each project.

In 2012, JOGMEC provided a liability guarantee for part of the development funds for the lithium development project in Salar de Olaroz (Olaroz Salt Lake), Argentina, in which a Japanese trade company participated.

JOGMEC invested in the world’s largest Brazilian niobium producer with Japanese steel makers and a trade company. Niobium is an essential metal for manufacturing high-grade steel, thereby securing an established source for stable supply of niobium.

Supporting Japan’s first lithium development project

In Chile, the largest copper-producing country in the world, JOGMEC provided liability guarantees for the funds loaned by private financial institutions to Japanese companies participating in the Esperanza, Caserones and Sierra Gorda mining projects. These projects are expected to greatly help ensure a stable supply of copper, with most of the copper concentrate produced at these mines being supplied to copper smelters in Japan.

Liability guarantee for large-scale copper mine development projects in Chile

Investing in the world’s largest niobium production company

Recent examples of our support

Investment seminar on ArgentinaSalar de Olaroz

Metals

Esperanza Mine Plant Caserones Mine

JOGMEC booth at Mining INDABA

JOGMEC organizes investment seminars for metal resource exploration and development, inviting high level government officers from resource-rich countries and industry experts as speakers, to

National rare metals stockpiling project

promote overseas mining investment by Japanese companies. JOGMEC also attends various mining-related events to exchange information with resource concerned parties.

③Bidding

Transfer ofinterest

Acquisition of interestFirm-in style

①Conclusion ofJV contract

JOGMEC

Foreign companyNational corporation

Foreign jointventure partner

②JV survey

④Continuance ofthe joint venture

Japanesecompany

Operator

Exploration cost

Owner ofthe mine

■ S c h e m e o f J V s u r v e y s

Geological surveyIt is important for Japan to expand the supply capacity of coal-producing countries and acquire new coal resources because Japan deeply depends on coal from foreign countries. JOGMEC conducts surveys on coal development and related projects in addition to organizing exploration projects jointly with the governments of coal-producing countries, foreign companies, and national corporations to help Japanese companies develop coal resources smoothly and efficiently.

JOGMEC organizes joint venture surveys by designating foreign companies as joint venture partners, and conducts geological surveys, geophysical and drilling surveys with the partners and summarizes the results. If the result is promising and Japanese companies show strong interest in them, JOGMEC invites them for bids and transfers JOGMEC’s rights under the joint venture agreement to the successful bidder. It contributes to reduce the risk involved in developing coal resources for Japanese companies.

Coal is a vital resource for the Japanese economy and industry, and demand for it has been rising worldwide. JOGMEC contributes to the coal industry in various ways including conducting geological surveys, developing technologies, and providing financial support and information, in order to secure stable coal supply in Japan.

Joint survey with government agencies of coal-producing countriesJOGMEC conducts joint surveys with the government agencies of coal-producing countries, and analyzes coal resources and geological structures of the coal layers to assess the potential for resource exploration, confirming the presence and extent of coal resources in high-risk areas where private companies cannot easily explore by themselves. JOGMEC contributes to

securing a stable coal supply for Japan by acquiring benefits for the entry of Japanese companies from the government agencies of coal-producing countries as well as facilitating future development of such coal resources. JOGMEC conducts surveys in highly expected countries by Japanese companies in addition to in key areas such as in Southeast Asia and Africa.

JOGMEC concluded a joint exploration agreement with Stanmore Coal Limited of Australia for a project in Clifford area, its first JV survey project in coal exploration. There are high hopes for this area with its highly combustible and high-quality steam coal resources.

Coal JV survey with Australian company

Major recent achievements

Coal

Joint survey with foreign companies（Joint venture survey）

ⒸDrummond International LLC ITOCHU Corporation

2524

Coal

Financial support for Japanese companies

Technological development and technical transferCollection and provision of information

JOGMEC has established an integrated financing system that covers from the initial exploration through development and production. Coal exploration projects involve extremely high-risk, so JOGMEC facilitates exploration by providing equity capital. Moreover, JOGMEC provides liability guarantees for the funds that Japanese companies borrow from private financial institutions because a lot of investment is needed for the development stage.

Based on agreements with government of coal-producing countries, JOGMEC helps to ease the tight supply and demand caused by increased demand in coal-producing countries, by demonstrating and diffusing coal-related technologies such as for effectively using low-grade coal. JOGMEC is also strengthening relations with coal-producing countries mainly in Asia such as by transferring coal extraction and security technologies to them. Coal demand has been growing rapidly especially in Asia, and is likely to continue increasing. It is important

to acquire information on the continuously changing situation of coal resources worldwide, promptly and precisely. JOGMEC supports Japanese companies who make the investment decisions by analyzing and providing comprehensive coal-related information, including the trends of coal-producing countries and resource development companies, and coal mining technology.

Equity participation in overseas exploration

Environmental measure project

Technology for efficient utilization of low-grade coal

Organizing seminars

Liability guarantee for overseas development fund

Transfer of coal exploration technology project

JOGMEC provides equity capital up to 50% of the project cost to facilitate high-risk exploration projects of coal resources when a Japanese company explores for coal in a foreign country.Financing is provided by stock acquisition, and JOGMEC has a policy to sell its interests when the purposes of the exploration are achieved.

JOGMEC carries out joint surveys with the government agencies of coal-producing countries on environmental issues that affect the development of coal in coal-producing countries, examines remedial measures and the applicability of

About half of the world’s recoverable coal reserves are low-grade coal called subbituminous coal and brown coal; their uses are limited because they have high moisture, low calorific value, and a high risk of spontaneous combustion. At the request of Indonesia, one of Japan’s major coal suppliers, for technological cooperation, JOGMEC conducts experiments to verify technology for producing liquefied fuel called coal slurry using low-grade coal.

JOGMEC holds seminars to introduce a t t r a c t i v e ne s s o f i n v e s tmen t destinations as needed. In December 2013, JOGMEC held a coal seminar focusing on the State of Queensland, Australia, an important partner as a coal supplier whose coal accounts for 25% of Japan’s coal imports, jointly with the state.

JOGMEC provides liability guarantees for up to 80% of the debt borrowed from private financial institutions as funds necessary for investment for coal mining, subsequent cleaning and other related operations in a foreign country.　

Many Asian coal-producing countries have been increasing their domestic consumption of coal, and they need to both expand production and ensure security at coal mines. In technical transfer projects, production and security technologies are transferred to coal mine workers in these countries using the knowledge and networks of Japan. JOGMEC also dispatches Japanese engineers to coal-producing countries and gives technical guidance according to local requirements.

After afforestation（December 2012）Tree planting on waste dump（September 2011）

Training of rescue team（Indonesia）《Source: JGC Corporation》 Coal seminar

Afforestation of waste dump in Vietnam

Japanese technologies, and conducts experiments. JOGMEC recently conducted a survey on environmental load reduction (improvement of acid soil and afforestation) in Vietnam and confirmed the effectiveness of Japanese technologies.

Coal

26 27

28 29

Geothermal

28 29

Measuring Instruments loaded Airborne Geophysical Survey by a helicopter

Geological survey

Financial Support

As the development of geothermal resources requires quite a long time with specific risks in the development up to operating a power plant, JOGMEC provides Japanese companies with financial support for their geological surveys and conducts its own R&D for geothermal technology.

In addition to the support of subsidy above-mentioned, JOGMEC provides other 2 support measures to be applied to the following stages of geothermal development.

Geothermal Potential Survey Subsidized ProjectsJOGMEC conducts advanced airborne geophysical surveys by a helicopter for the first time in Japan for geothermal development, aiming to acquire basic data for evaluation of geothermal resources; Airborne Gravity Gradiometer(AGG) and Helicopter Time-Domain Electromagnetic survey(HeliTEM). AGG acquires the highest resolution airborne gravity data available. HeliTEM expｌores deeper than conventional survey to narrow down prospective areas efficiently.

JOGMEC provides Japanese companies and local governments with subsidies for their surveys. The subsidies are provided to expenses for high-risk initial surveys including surface survey, geophysical exploration and well drilling survey. Costs of environmental assessments and monitoring surveys are also subsidized to protect the natural environment and to maintain harmony with hot spring areas. A total of 26 survey projects were subsidized in the fiscal year 2016.

Investments and Liability GuaranteesAt the stage of estimate of the production ability after the initial surveys, JOGMEC can invest up to 50% of the equity capital of the special project company. The first investment was made for Matsuohachimantai exploration project in 2015.At the construction stage of a power plant, JOGMEC provides companies with a liability guarantee for up to 80% of the total loan if they need to be financed from private financial institutions as development funds. Such Liability guarantees were provided for 2 geothermal binary plants, Tsuchiyu of 0.4MW and Sugawara of 5MW in 2013 and Wasabizawa geothermal power plant of 42MW in 2014.

As with the many types of renewable energy resources, geothermal energy is clean source that has a much lower environmental impact than conventional energies, and is considered constantly replenished and sustainable. Geothermal Power Generation, harnessing geothermal energy for electricity production, attracted more attention as one of base-load energy sources after the accident in Fukushima in 2011, and the circumstances around geothermal power generation have been changed to advance toward expansion.To drive geothermal development and geothermal power generation in Japan, JOGMEC provides various support ranging from development to power plant construction, conducts R&D, and provides the related data and information.

Geothermal

30

Geothermal development in Japan

31

R&D for Geothermal Technology

Data Collection & InformationJOGMEC is tasked with promotional activities to increase public awareness of geothermal energy. The activities include symposiums, exhibitions and other events related to geothermal energy.In addition, JOGMEC provides results of surveys, achievements of R&D and guidance documents to assist Japanese companies, and conducts technical seminars to foster geothermal engineers.

Cooperation with foreign agencies⃝Joint research with EPRI In 2014, joint research was realized with Electric Power Research Institute(EPRI) in U.S. on Enhanced Geothermal System (EGS) .

⃝IEA-GIAJOGMEC is proactively working to share data, technologies, and expertise for further geothermal development through its participation in IEA-GIA ※

Exploration Technology

Enhanced Geothermal System

PDC BitIn the initial stages of geothermal exploration, it is quite important to visualize subsurface structures in detail. Then JOGMEC has been applying seismic survey which has recently showed remarkable achievement in the oil exploration fields.

There are some geothermal power plants of which power generation often fluctuate due to the uncertainty of required volumes of steam or hot water.In order to work out such issues, JOGMEC will develop technology to extract optimal and stable volumes of steam or hot water by properly controlled injection to geothermal reservoirs.

JOGMEC's efforts are underway to develop versatile PDC bits for geothermal development which are further suitable at high temperature and to igneous rocks than conventional bits, as such bits have not been developed and available.

Workshop at EPRI,Sep.2014

Geological Interpretation by 3D Seismic Data Our Prototype (8-1/2 inch PDC Bit)

Our Prototype(PDC Cutter D-8.2mm H-5.0mm)

※the International Energy Agency Geothermal Implementing Agreement

Geothermal power plants in Japan Geothermal Resource Potential and Installed Capacity

As of 2014, there are 38 geothermal power plants in operation with the capacity of 524MW in Japan. Matsukawa Geothermal Power Plant, commenced in 1966, is the first plant of 23.5MW in Japan. Hacchobaru Geothermal Power Plant, the largest geothermal power plant in Japan, has a total capacity of 112MW. Until very recently, after Hachijojima Geothermal Power Plant was constructed to start operation in 1999, no major geothermal power plants have been constructed except for several small-scale plants, newly constructed to start operation in 2015 are Sugawara Binary Plant of 5MW and Tsuchiyu Binary Plant of 0.4MW.While in terms of geothermal potential Japan has approximately 23,000MW, estimated to be the third largest in the world, its geothermal installed capacity is ranked tenth in the world in 2016.

Current situation of geothermal power generation

◦National Parks and DeregulationsAbout 80% of geothermal resources is located in national parks where the development is prohibited. However, after the disaster in 2011 the Ministry of Environment has issued guidelines to lift the restrictions since 2012, enabling to expand areas for development.

◦Acceleration of Development under FITFIT※ system was introduced in Japan in July 2012.Under the FIT, the purchase prices of geothermal energy are set at 40.0 yen per kW for plants less than 15,000kW and 26.0 yen per kW for plants of 15,000kW and up as of 2016. ※The Feed-in Tariff

Agencies related Geothermal Development

Government

Incorporated Administrative

Agencies

Related Associations

Ministry of Environment(MOE)

Ministry of Agriculture,Forestry & Fisheries(MAFF)

Ministry of Economy,Trade & Industry(METI)

Japan Geothermal Association (JGA)The Geothermal Research Society of Japan (GRSJ)New Energy Foudation (NEF)Themal & Nuclear Power Engineering Society (TEMPES)Japan Mining Industry Association (JMIA)Japan Mining & Materials Processing Institute of Japan (MMIJ), etc.

Agency for Natural Resources & Energy

Japan Oil,Gas & Metals National Corporation(JOGMEC)

New Energy & Industrial Technology Development Organization(NEDO)The Institute of Advanced Industrial Science & Techinology(AIST)

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

JapanKenyaTurky

Iceland

Mexico

ItalyNew Zealand

Indonesia

PhilippinesUnited States

Geothermal Installed Capacity

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

Italy

New Zealand

Iceland

Mexico

Philippines

Japan

Indonesia

United States

Geothermal Resource Potential

39,090

27,140

23,470

6,000

6,000

5,800

3,650

1,500

Geothermalmal

Geothermal Power PlantGeothermal Power Plant

Volcano Rainwater

Caprock(Impermeable Layer)

Magma Chamber

River

Prod

uctio

n W

ell

Injec

tion

Well

Rech

arge

Well

Geothermal Reservoir

Matsukawa

Mori 25,000kW

★Ohnuma 9,500kW

Sumikawa 50,000kW

Kakkonda 80,000kWUenotai 28,800kW

Yanaizu Nishiyama65,000kW

Ohtake 12,500kW

Hachijo-jima 3,300kW★Suginoi 1,900kW

★Kuju 990kW

Takigami 25,000kW

Hacchobaru 110,000kW, 2,000kW

Ohgiri30,000kW

Yamakawa30,000kW ★Kirishima 100kW

Onikoube 15,000kW

23,500kW

Tsuchiyu 400kW

Sugawara 5,000kW

in Operation★ for Private Use

Source: Hirofumi Muraoka, July 2011, OHM

Source：BP Statistical Review of Energy, June2016

Agreements on international cooperation with resource-rich countries（2015〜）

Country Date Field

Oman 2016.12 Human resources development and Technical cooperation on Oil and Gas

Russian Federation2016.122016.92016.6

Development of resources on lithium Joint ExplorationsDevelopment of resources on Coal and Oil development

Australia（QLD） 2016.11 Partnership on natural resources

Mozambique 2016.102016.8

Human resources development on Oil and Gas, and Coal

Kenya 2016.8 Human resources development on Oil and Gas, and Metals

Colombia 2016.8 Development of resources on Coal

Myanmar 2016.7 Joint Research on Metals

China 2016.6 Stocpiling of Oil

Canada（BC） 2016.5 Cooperation on Gas and Coal

Indonesia 2016.3 Oil development Technology

Peru 2016.2 Dispatch of mining and environment exparts

Brazil 2015.11 Oil and Gas development

Cambodia 2015.11 Stocpiling of Oil

Kazakhstan 2015.10 Joint Research on Metals

Uzbekistan 2015.10 Cooperation and Joint Research on Oil and Gas, and Metals

Turkmenistan 2015.10 GTL Project

Zimbabwe 2015.9 Human resources development on Metals

Viet Nam 2015.9 Technological development of Oil

New Zealand 2015.7 Cooperation on Geothermal development

JOGMEC held the Japan Sustainable Mining, Investment & Technology business forum (commonly known as J-SUMIT) in Tokyo jointly with the Ministry of Economy, Trade and Industry in 2013. This event was designed to help Japanese companies invest in resource development in Africa and promote business matching between Japanese state-of-the-art technologies and the resource development field, and it attracted more than 2,000 visitors from home and abroad. Lectures on Japanese technologies and exhibition booths featuring the technologies of Japanese companies attracted attention from visitors. Moreover, information was actively exchanged and business negotiations were held, making this a lively event that brought together industry, academia, and government.

JOGMEC has been holding technical training for the mineral resource exploration project and professionals in geology for the Southern African Development Community (SADC) in the Geological Remote Sensing Center in the Republic of Bo tswana. JOGMEC signed a memorandum o f understanding with 11 countries in the SADC community. It also conducted joint analyses and local surveys using satellite image analysis technology with a total of about 300 geology professionals for the five years between 2008 and 2013, and transferred technologies to these professionals of the SADC countries, while also selecting and organizing projects in promising areas. As a result, some SADC countries have developed sufficiently skilled human resources to teach experts studying geology in their home countries.

Business matching between Japanese companies and resource-rich African countries

Human resource development and technology transfer seminar in the Botswana Geological Remote Sensing Centre

3332

JOGMEC has been and will continue strengthening mutually cooperative relationship with NOCs and host governments in line with the Japanese government’s energy policy.

Resource diplomacy and international cooperation

Contents of resource diplomacy①Mutually cooperative relationship fostered

through meetings with key figures from host governments and NOCs to pave the way for further collaboration on projects, R&D, and human resources development, resulting in strategic partnerships.

②JOGMEC participates actively in international conferences and exhibitions to raise the presence of the Japanese resource industry and JOGMEC.

③JOGMEC’s contribution to host countries in human resources development through various courses in Advanced Technical Training.

On February 29, 2004, JOGMEC was established through the merger of the functions of the Japan National Oil Corporation (JNOC) responsible for securing supplies of oil and natural gas and those of the Metal Mining Agency of Japan (MMAJ) responsible for securing supplies of non-ferrous metal and mineral resources.In addition, the business of assisting coal and geothermal development was added on September 15, 2012.

History1967

J a p a n P e t r o l e u m Development Corporation (JPDC) established

1978Renamed “Japan National Oil Corporation” (JNOC)

2004Japan Oil, Gas and Metals National Corporation (JOGMEC) established through the integration of Japan National Oil Corporation (JNOC) and the Metal Mining Agency of Japan (MMAJ).

2012 JOGMEC’s functions strengthened due to the addition of support activities related to coal and geothermal energy.

1963Metallic Minerals Exploration Financing Agency of Japan (MEFAJ) established

1973Renamed “Metal Mining Agency of Japan” (MMAJ)

Offices in the WorldResearch facilities for technology development, stockpile site management offices, and metals environment & geothermal resource support offices are located throughout Japan, with the headquarters as the center of the organization.Resident offices are located worldwide, and they distribute information on local resources and the energy situation and on exploration and development that is continually changing.

ＯｆｆｉｃｅｓJOGMEC’s areas of operation

Offices in Japan

Oil Stockpile Site Management Offices

Tomakomai Site Management OfficeMutsu-Ogawara Site Management OfficeKuji Site Management OfficeAkita Site Management OfficeFukui Site Management OfficeKikuma Site Management OfficeShirashima Site Management OfficeKamigoto Site Management OfficeKushikino Site Management OfficeShibushi Site Management Office

Toranomon Twin Building, 2-10-1,Toranomon, Minato-ku, Tokyo105-0001 JAPANTel: +81-3-6758-8000Fax: +81-3-6758-8008

Head Office

The Metal Technology Center of JOGMEC is engaged in research and development related to the production and recovery of metals, and raising the efficiency of eco-friendly technologies.

9-3, Furudate, Kosaka-kozan, Kosaka-machi,Kazuno-gun, Akita 017-0202 JAPANTel: +81-186-29-3829　Fax: +81-186-29-3849

Metals Technology Center

Technical departments related to exploration and development of oil and natural gas of JOGMEC are integrated in the Technology & Research Center , and pro fessional training to which technical experts from resources-rich countries are invited are held by the Technology & Research Center periodically.

1-2-2, Hamada, Mihama-ku, Chiba-city,Chiba 261-0025 JAPANTel: +81-43-276-9212　Fax: +81-43-276-4061

Technology and Research Center（TRC）

LPG Stockpile Site Management Offices

Kamisu Site Management OfficeNanao Site Management OfficeKurashiki Site Management OfficeNamikata Site Management OfficeFukushima Site Management Office

Metals Environment & Geothermal Resource Support Office

Hokkaido Metals Environment & Geothermal Resource Support OfficeTohoku Metals Environment & Geothermal Resource Support OfficeChugoku-Kinki Metals Environment & Geothermal Resource Support OfficeKyushu Metals Environment & Geothermal Resource Support OfficeMatsuo Mine Pollution Control Project Support Office

Other locations

Kashiwazaki Test Field Office

34 35

Beijing Office（China） 3005 Chang Fu Gong Office Building,Jia-26, Jianguomen Wai Street, Beijing 100022 CHINATel: +86-10-6590-9520 Fax: +86-10-6590-8366Jakarta Office（Indonesia）5th Floor, SUMMITMASⅡ, Jl. Jend. Sudirman Kav.61-62, Jakarta 12190, INDONESIATEL.+62-21-522-6640 FAX.+62-21-522-6650

Asia

Sydney Office（Australia）Level 23, BT Tower, 1 Market Street, Sydney NSW 2000, AUSTRALIATEL.+61-2-9264-9611 (oil&gas), +61-9264-2493 (metals) FAX.+61-2-9264-4914

Mexico Office（Mexico）Emerson #304, Int. 801, Col. Polanco IV seccion, Del.Miguel Hidalgo, CDMX, Mexico, C.P. 11550TEL.+52-55-5280-1099 FAX.+52-55-5280-0214

Lima Office（Peru）Av. Camino Real 348, Torre El Pilar, Piso 7, Oficina 704, San Isidro Lima-27, PERUTEL.+51-1-221-5088 FAX.+51-1-221-1871Santiago Office（Chile）World Trade Center, Torre Norte 1005, Av. Nueva Tajamar 481, Las Condes, Santiago, CHILE TEL.+56-2-2203-6130 FAX.+56-2-2203-6121

Vancouver Office（Canada）1710-400 Burrard Street, Vancouver, B.C. V6C3A6, CANADATEL.+1-604-685-1282 FAX.+1-604-685-4123Washington Office（U.S.A.）1233 20th Street, N.W. Suite 206 Washington, D.C. 20036, U.S.A.TEL.+1-202-775-0602 FAX.+1-202-775-0605Houston Office（U.S.A.）One Riverway, Suite 450 Houston, Texas 77056, U.S.A.TEL.+1-713-622-0204 FAX.+1-713-622-1330

North America

South America

Oceania

Middle East Office（U.A.E.）P.O.BOX 6270 Al-Masaood Tower #904 , Sheikh Hamdan Street, Abu Dhabi, U.A.E.TEL.+971-2-6330366, +971-2-6217704 FAX.+971-2-6330280

Middle East

London Office（U.K.）Carrington House, 126-130 Regent Street, London W1B 5SE, U.K.TEL.+44-20-7287-7915（oil & gas）, +44-20-7287-7916（metals）FAX.+44-20-7287-7917

Europe

Botswana Geological Remote Sensing Centre（Botswana）Plot 54353, 5th Floor Office B, Masa Centre,Gaborone, BOTSWANATEL：267-390-2878 ／ FAX：267-390-2879

Africa

Moscow Office（Russia）Room 748, HOTEL：Mezhdunarodnaya Krasnopresnenskaya Nab.12 Moscow 123610, RUSSIAN FEDERATIONTEL.+7-495-967-0405 FAX.+7-495-967-0407

Russia

Internal Audit Office, General Coordination, Financial Management & Accounting, Evaluation and Research & Analysis

President Executive Vice President

Executive Director Auditors(2) Auditors' Office

Oil & Gas Upstream Business Unit

Metals Strategy & Exploration Unit

Metals & Coal Finance and EnvironmentUnit

Oil & Gas Upstream Technology Unit

StockpileUnit

Geothermal Resource Development Department

Russia ProjectGroup

Organization

Internal Audit Office

BusinessStrategy Department

Administration and Training Department

MetalsStrategy Department

StockpilePlanning Department

Metals Environment Management Department

General Coordination Department

Project Department

Exploration Department

MetalsExploration Department

Petroleum Stockpile Management Department

Metals Finance Department

Financial Management & Accounting Dpartment

Seismic Vessel Project Group

MetalsMining Technology Department

LPG Stockpile Management Department

CoalDevelopment Department

Evaluation Department

Technology Department

Rare Metal Stockpile Department

Coal Asset Management Department

Research & Analysis Department

Technical Solutions Project Group

Methane Hydrate Research & Development Group

Kyushu Branch Office