INPEX CORPORATION TEIKOKU OIL CO.

, LTD

Joint Presentation
Business Integration

November 7, 2005
DISCLAIMER

This presentation includes forward-looking statements that reflect the plans and expectations of
INPEX CORPORATION (hereinafter ‘INPEX’) and TEIKOKU OIL CO., LTD. (hereinafter ‘Teikoku’) in
relation to the integration described above and the benefits resulting from it. These forward-looking
statements are based on the current assumptions and beliefs of INPEX and Teikoku in light of the
information currently available to them, and involve known and unknown risks, uncertainties and
other factors, and may be affected by such risks, uncertainties and other factors. Such risks,
uncertainties and other factors include, without limitation, the following:

„ Changes in the relationship between the post-integration INPEX/Teikoku group (the "Group")
with the governments of the countries or regions in which it will conduct business
„ Changes in the Japanese government's energy policy and the Group's role within it
„ Changes in prices or demand for crude oil and natural gas the Group will produce
„ The risks of increased costs to develop and apply exploration, development, production and
related technologies, and the uncertainty of such technologies producing expected results

INPEX and Teikoku have no obligation to update publicly any forward-looking statements after the
date of this presentation.

2
Agenda

1. Overview of Business Integration

2. Benefits of Business Integration

3. Growth Strategy of the New Company

3
1. Overview of Business Integration

4
Objectives of Business Integration
State-owned oil companies devoted Large oil development companies
to acquisition of natural resources repeating M&A activity
Intensifying competition in securing oil/natural gas resources

Strengthening financial base

Further enhancement of corporate strength

Enhancing acquisition capability

Combining technical capabilities of acquiring valuable interests,
for resource development leveraging government resource diplomacy

Establishing strong positioning within the international competitive market

Sustainable growth of the company / stable supply of energy to Japan

5
Outline of the New Company (Holding Company)
Kokusai Sekiyu Kaihatsu Teiseki Holdings K.K.
Company Name
English Name: INPEX Holdings Inc.

Location 4-1-18 Ebisu Shibuya-ku, Tokyo

Date of Incorporation April 3, 2006 (Plan)

Establish a holding company through Share

Transfer
Integration Process (To become an operating holding company through merger of INPEX, Teikoku
and new joint holding company by the annual shareholders’ meeting of the
second fiscal year(2008/6))
・1 Holding Company common share for 1 INPEX common share
・1 Holding Company special class share for 1 INPEX special class
Share Transfer Ratio share
・ 0.00144 Holding Company common shares for 1 Teikoku common
share

Listing Exchange Tokyo Stock Exchange (1st Section)

6
 Business Integration Process

Current Phase 1 (2006/4) Phase 2 (2008/6)

Holding Operating

Share Transfer
INPEX Teikoku Company Holding Company

Merger
INPEX Teikoku
INPEX Teikoku

Overseas Overseas Domestic

Operations Operations Operations
Overseas Overseas Domestic Overseas Domestic New
Operations Operations Operations Operations Operations Operations
Proved reserves*（BOE millions）:
1,545 260 ** Further reorganization to realize growth strategy
Probable reserves*（BOE millions）:
2,025 126 ** Proved reserves*（BOE millions）: 1,805

Production Volume*（1,000 BOE/d）: Probable reserves*（BOE millions）: 2,152

330 42 Production Volume*（1,000 BOE/d）: 372

Note : * Proved reserves and production volume are figures calculated in accordance with SEC regulations, and probable reserves are figures calculated in accordance with SPE / WPC standards (oil conversion).
Includes owned proportion of equity-method affiliates. INPEX figures are based on DeGolyer & MacNaughton’s deposit evaluation report. Teikoku figures are based on company evaluations prepared in
accordance with the abovementioned standards, as of 12/31/2004. Holding Company figures are simple sums of Teikoku and INPEX’s figures of FY 2004.
** Includes reserves currently in a governmental approval process for interests transfer

7
Schedule

11/5/2005 Signing of Stock Transfer Agreement

1/31/2006 (Plan) Extraordinary Shareholders’ Meeting

3/28/2006 (Plan) Delisting of both companies

4/3/2006 (Plan) Establishment and listing of Holding

Company

June 2008 (Plan) To become an operating holding

company

8
Members of the Board of Directors

Rep. Director & Chairman Kunihiko Matsuo (Chairman of INPEX)

Rep. Director Akira Isono (Chairman of Teikoku)

Rep. Director Masatoshi Sugioka (President of Teikoku)

Rep. Director & President Naoki Kuroda (President of INPEX)

Note: Other directors, auditors to be selected upon discussion prior to mailing of proxy statement for the Extraordinary Shareholders’ Meeting

9
Functions of the New Company
(Holding Company)
Shareholders’
meeting

Board of Auditors
Directors

Chairman,
President

Audit Division Management

Committee

General
Corporate Strategy Accounting Technology / HSE
Administration
and Planning Division Division Division
Division
General Admin Strategy Budget Technology
HR New Project Finance R&D
Development
Administrative Accounting HSE
Secretary IR／PR

10
Pro Forma Financials
(Simple Sum)

(JPY in 100 millions)

FY 2004 INPEX Teikoku Simple Sum

Revenue 4,786 840 5,626

Operating Profit 2,687 135 2,822

Ordinary Profit 2,586 165 2,751

Net Income 765 93 858

Total Assets 7,792 2,405 10,197

Market Cap 15,704 3,579 19,284
as of 11/4/2005*

Number of
387 1,331 1,718
Employees
* Source: Bloomberg
11
2. Benefits of Business Integration

12
Benefits of Business Integration

„ To establish well-balanced portfolio through combining

Well-balanced Asset
promising, complementary overseas and domestic
Portfolio assets

„ To stabilize operational foundation through combining

highly profitable overseas operations with high growth
Strengthened Presence as potential and stable domestic operations
a Global Independent „ To increase recoverable reserves and production
Company volume
„ To expand overseas businesses operations

„ Consolidation of advanced, practical technical

capabilities and consolidation of acquisition of
Enhanced Capability as an promising assets and experience through operation
Operator with ample experience in managing domestic/overseas
operator projects and evaluating/acquiring promising
overseas assets

13
 Well-balanced Asset
Portfolio
Presence as a Global

Well-balanced Asset Portfolio Independent Company

Enhanced Capability as an
Operator

Promising, highly complementary assets

„ As there is no overlap between INPEX (operating mainly in Asia/Oceania, Middle East,
Caspian Sea) and Teikoku (with a domestic gas development base, operating overseas
mainly in Central/South America and Africa), the overseas assets of each are highly
complementary, and will bring expansion in operating areas and diversify country risk
„ Reduction in business risk by a diversified combination of projects with differing risk
profiles, such as exploration, development, and service operations

Domestic business stabilizing long-term operational foundation

„ Domestic assets such as producing gas fields and undeveloped licensed areas as well as
the gas pipeline network are free from country risk and foreign exchange risk, contributing
to stronger portfolio balance and long-term stability in business operation

Possible expansion in new business domain

„ In addition to domestic and overseas upstream operations, we intend to lay the path for
establishing an LNG supply chain by combining the 1,300 km domestic gas pipeline
network and vertical operational development of refining, power generation, etc. with the
overseas gas assets.

14
 Well-balanced Asset Portfolio Well-balanced Asset
Portfolio
Presence as a Global
Independent Company
Existing Interests in Major Assets Enhanced Capability as an
Operator

North Caspian Sea Block

(Kashagan Oil Fields, etc.)
Sakhalin 1
Minami-
ACG Oil Fields Nagaoka
South Cuervito,
Azadegan Oil Fields Natuna Sea Offshore Mahakam Block/
ADMA Block Fronterizo
Block B Attaka Unit
(Umm Shaif/Lower Blocks
El Ouar I/II /Upper Zakum Oil Berau Block
Fields, etc.) (Tangguh unit) East Guarico,
Sanvi Guere
Blocks
West Bakr Block Masela Block
Ohanet Block ABK Block (Abadi)

North West Java Block 18* Offshore North

WA-10-L Block Block Campos
Block 31* Frade Block
(Grifin) South East
Sumatra Block
Offshore Congo Block WA-285-P Block
JPDA03-12 Block Albacora
(Ichthys) (Bayu Undan)
INPEX： In Production In Development Undeveloped (Discovered)
Teikoku： In Production In Development Undeveloped (Discovered)
* In a governmental approval
process for interests transfer
15
Well-balanced Asset Portfolio Well-balanced Asset
Portfolio
Presence as a Global
Independent Company
Long-term Stability Brought by Domestic Business Enhanced Capability as an
Operator

Minami-Nagaoka Gas Field in close

proximity to lucrative markets
„ Abundant reserves with no country risk Minami-Nagaoka Gas Field
(R/P: approx. 30 years) Ample reserves to supply in
the super long-run
„ Further increase in reserves due to the Massive
Hydraulic Fracturing (MHF) technique

„ 1,300 km pipeline network affording direct links to

the markets with high growth potential in the
Kanto-Koshinetsu (Yamanashi, Nagano, Niigata)
Region

Perpetuate domestic business through

introduction of overseas LNG
„ Produce the best mix of domestically produced gas
and overseas LNG to maximize the utilization value
of domestic reserves

„ Secure sources of gas to follow the Minami-Nagaoka Overseas LNG

Gas Field to perpetuate the domestic business Optimal use of domestic reserves
to be potentially new source
post-Minami-Nagaoka Gas Field
„ Consider the possibility of business development by
effectively combining the pipeline network and
overseas gas assets

16
Well-balanced Asset Portfolio Well-balanced Asset
Portfolio
Presence as a Global
Independent Company
Production Volume by Region Enhanced Capability as an
Operator

INPEX (FY 2004) New Company

Caspian Sea
Coast / Other Total: 330,000 BOE/D
4% Caspian Sea
Coast / Other Africa
Central & South 3% 3%
Asia / Oceania America
Middle East 57％ 4%
39% Japan
5%

Teikoku (FY 2004)

Africa Total: 42,000 BOE/D Middle East Asia / Oceania

24% 34% 51%
Japan
43%
Total: 372,000 BOE/D

Central & South

America
33% Notes: * Production volume figures are in accordance with SEC regulatory standards including owned proportion of equity-method affiliates.
Figures for the New Company are a simple sum of INPEX and Teikoku of FY2004

17
Well-balanced Asset Portfolio Well-balanced Asset
Portfolio
Presence as a Global
Independent Company
Production Volume by Products Enhanced Capability as an
Operator

INPEX (FY 2004) New Company

Total: 330,000 BOE/D

Gas
42%
Oil
58%
Gas
44%
Oil
Teikoku(FY2004) 56%

Total: 42,000 BOE/D

Oil
36%

Total: 372,000 BOE/D

Gas
64%

Notes: * Production volume figures are in accordance with SEC regulatory standards including owned proportion of equity-method affiliates.
Figures for the New Company are a simple sum of INPEX and Teikoku of FY2004

18
Strengthened Presence as a Global Well-balanced Asset
Portfolio
Presence as a Global

Independent Company Independent Company

Enhanced Capability as an
Operator

Stabilization of operational foundation

„ Stabilization of operational foundation due to the combination of domestic operations, free
from country risk and foreign exchange risk, and the highly profitable overseas operations
with high growth potential

Expansion of scale of operations

„ Proved reserves by SEC Standards (as of 3/31/2005): 1,805 million BOE
„ Probable reserves by SPE/WPC Standards (as of 3/31/2005): 2,152 million BOE
„ Net Production Volume (FY 2004): 372,000 BOE/D

Expansion of overseas business operations

„ Strengthened operational foundation through existing projects and expanded overseas
assets through increasing opportunities to access new projects leveraging the government
resource diplomacy

19
 Well-balanced Asset
Strengthened Presence as a Global Independent Company Portfolio
Presence as a Global
Independent Company
Expansion of Proved Reserves* Enhanced Capability as an
Operator

（FY2004）
5,000
Crude Oil / Condensate / LPG Natural Gas

4,500

4,124

4,000

3,500
BOE in millions

3,000

58% 2,532
2,500 2,368
2,229
20% 2,147

2,000 1,937
53% 1,805 1,754
35%
1,545
1,500
70% 52% 45% 1,242 1,218
1,139
62% 41% 1,046
968 917
1,000 80%
55% 57%
42% 51% 38%
65%
500 47% 55% 88% 71%
48%
59% 62% 260 **
30% 45% 43% 49%
38%
29% 73%
0 12%
Statoil Occidental Anadarko CNOOC BG Apache New Unocal INPEX Talisman Kerr- Marathon Amerada PTTEP Woodside Teikoku
Company McGee Hess

Source: Most recent publicly available financials (as of FY 12/2004, except for PTTEP (FY 12/2003) and INPEX (FY 3/2005) respectively; figure for the New Company is a simple sum, assuming that integration of
INPEX and Teikoku took place in FY 2004)
Note : * Proved reserves are figures calculated in accordance with SEC regulations. Includes owned proportion of equity-method affiliates. INPEX figures based on DeGolyer & MacNaughton’s deposit evaluation report.
Teikoku figures are based on company evaluations prepared in accordance with the abovementioned standards, as of 12/31/2004
** Includes reserves in a government approval process for interests transfer

20
 Well-balanced Asset
Strengthened Presence as a Global Independent Company Portfolio
Presence as a Global
Independent Company
Increase in Proved reserves and Probable reserves* Enhanced Capability as an
Operator

4,500
Proved Reserves Probable Reserves （FY2004）
RP Ratio***
4,000 3,956

3,500

3,000
B O E in m illio n s

2,025 2,152
2,500

2,000
126** 29.2Years

1,500

1,000 1,545
1,805 13.3Years

500

0
260**
Teikoku INPEX Teikoku INPEX New Company
Note:
Texas Indiana Texas Indiana New
* INPEX’s probable reserves as of 3/31/2005 are figures calculated in accordance with SPE / WPC standards (including owned proportion of equity-method affiliates),
(Integrated)
based on DeGolyer & MacNaughton’s deposit evaluation report. Teikoku figures are based on company evaluations prepared in accordance with the abovementioned
standards, as of 12/31/2004
** Includes reserves currently in a governmental approval process for interests transfer Company
*** RP (Reserve Production) Ratio = “Proved reserves” or “Proved + Probable reserves” as of end of FY2004/ Actual FY 2004 Production Volume

21
 Well-balanced Asset
Strengthened Presence as a Global Independent Company Portfolio
Presence as a Global
Independent Company
Increase in Production Volume* Enhanced Capability as an
Operator

（FY2004）
1,200 Crude Oil / Condensate / LPG Natural Gas

1,077

1,000

33%

800
1,000 BOE/d

600 567 563

524
19%
457 449
425
36% 381
400 372
353 342 332 330
56% 46% 16% 313
44%
67% 72% 34%
63% 45%
49% 42%
200 49%
81% 148
84% 130
64%
54% 56% 66% 58%
55% 51% 56% 84%
45% 51% 42
28% 37%
44% 63%
16%
0
Statoil Occidental New Anadarko BG Apache Unocal CNOOC New Talisman Amerada Marathon INPEX Kerr- Woodside PTTEP Teikoku
Company Company Hess McGee
(FY2009)

Source: Most recent publicly available financials for each company

Notes: * Company data as of FY 12/2004, except for INPEX (FY 3/2005) and PTTEP (FY 12/2003)
Figures for the New Company are simple sums, assuming that integration of INPEX and Teikoku took place in FY 2004 (Teikoku figures are FY 12/2004 figures)
Production volume figures are in accordance with SEC regulatory standards. Includes owned proportion of equity-method affiliates.

22
 Well-balanced Asset
Portfolio
Presence as a Global

Enhanced Capability as an Operator Independent Company

Enhanced Capability as an
Operator

Consolidation of advanced, practical technical capabilities with ample

experience in managing domestic/overseas operator projects and
evaluating/acquiring promising overseas assets
„ Combination of the abundant technological knowledge / experience acquired through cooperation
with numerous oil majors and independent oil companies in the course of global operations, and the
domestic and overseas operating experience as an operator, to greatly expand technical capabilities
as an upstream company and capability of acquiring projects and management
„ Effectively utilizing such operator capabilities and know-how as well as the technical research center
to support operating activities
„ Creation of a team of 700 technical staffs

Driving forward existing projects

„ The expanded operator capabilities will be a stronger drive force to implement large projects such
as Iran (Azadegan), Australia (Ichthys), and Indonesia (Abadi)

23
Enhanced Capability as an Operator Well-balanced Asset
Portfolio
Presence as a Global
国際的な有力中堅企業として
Independent Company
のプレゼンス向上
Expansion of Human Resources as a Genuine Upstream Company Enhanced Capability as an
オペレーター能力の強化
Operator

INPEX Teikoku
Engineers and external negotiation experts who have
acquired abundant technological knowledge and Abundant operating experience domestically and
experience in acquiring and operating promising assets overseas (over 50 years domestically, over 10 years in
through cooperation with numerous oil majors, leading ＋ Venezuela, etc.) as an operator, and many engineers
independent oil companies and national oil companies with high technological know-how who have practiced
of the oil producing country, in the course of the such operations
Company’s global operations

<Mahakam, JODCO, ACG, etc.> <Minami-Nagaoka, Venezuela, Egypt, etc.>

Complementary /
Synergy Effects

Development of new, large-scale oil/gas fields such as Azadegan, Ichthys, and Abadi
Strengthening driving force of implementation of new operator projects
„ 700 technical staffs (Teikoku 510 / INPEX 190)
„ Utilizing the HQ Engineering Division, Technology Research Center, etc. to support
global operating activities

24
 Other Expected Effects of Integration

„ Speedy and precise realization of integration effects due to

the combination of healthy financial positions,
efficiency-oriented management policies, and corporate
cultures of “simplicity and fortitude” that already exist
commonly in the both companies
„ Securing an efficient and proactive management structure
through merger of INPEX, Teikoku and new joint holding
company by the annual shareholders’ meeting of the
second fiscal year (2008/6)

25
3. Growth Strategy of the New Company

26
Growth Strategy of the New Company
Production Commencement Schedule for New Oil and Gas Projects

Australia /Timor Sea JPDA

Indonesia
Ichthys
Australia
2015
Ravensworth Abadi
Indonesia
Australia
2014
Vincent
Australia
2013
Kuda Tasi Jahal
Timor Sea Joint Petroleum Development
Area
2012
Caspian Sea/Other
Bayu-Undan Sisi Nubi Tangguh 2011
Timor Sea Joint Petroleum Agreement Indonesia Indonesia
Area

2010 Kashagan
Sadewa Kerisi Kazakhstan
Indonesia Indonesia

2009 Kairan Aktote

Kazakhstan Kazakhstan
Hiu
APN Indonesia
Kalamkas Kashagan Southwest
Indonesia 2008 Kazakhstan Kazakhstan

Belanak
Indonesia
2007 South Gunashili (Deepwater) El Ouar I/II
America Azerbaijan
Algeria

2006 Frade
Brazil
Middle
2005 East Azeri
Apaika Nenke Azerbaijan

(Block 31*)
2004 Azadegan Ecuador
Iran

Development Phase Project under establishment of Gas Oil/Condensate

(Producing plan is settled) development plan
* In a governmental approval
process for interests transfer 27
 Pro forma Volume Projections *

Caspian Coast / Other

Middle East
600 Japan GR: 8.7%
2009
CA 563
Asia / Oceania Y
550 04 - F
FY 20
500
450 32%

400 372
( 1,000 BOED)

350 10%
300 28%
34%
250
200 5% 5%
150
35%
100 51%
50
0
FY2004 FY2005 (E) FY2006 (E) FY2007 (E) FY2008 (E) FY2009 (E)
Pro forma**
Notes: * Assuming oil prices of $39 in 2005, $33 in 2006, and $30 thereafter
** Production Volumes are simple sums, assuming that integration of INPEX and Teikoku took place in FY 2004

28
 Exploration / Development Investment Plan

By Activity By Region

(JPY in 100 millions) (JPY in 100 millions)

Post-Integration Post-Integration
2,500 2,464 2,500
2,464

2,033 2,033
1,920 775
2,000 2,000 1,920

627
1,428 1,428 631
1,500 1,500
448
2,217
273
445
1,848 248 444
1,000 1,790 1,000
85 244
1,342 231 145
500 500 993
890
667 699
86 185 247 130
0 0
FY2004 FY2005(E) FY2006(E) FY2007(E) FY2004 FY2005(E) FY2006(E) FY2007(E)
Pro forma* Pro forma*
Exploration Development Asia / Oceania Japan
Note: * Simple sums, assuming that integration of INPEX and Teikoku took place in FY 2004 Middle East Caspian Coast / Other

29
Acquisition of New Resources and
Enhancement of Enterprise Value
Integration of INPEX and Teikoku

Enhanced Capability as Production

Asset Portfolio Balance Strengthened Presence equivalent to top
an Operator independents
„ Overseas oil and gas assets „ Expanding reserves and „ Consolidation of technical
production volume capabilities including
„ Domestic natural gas
human resources and
„ Strengthened financial base
„ Domestic gas pipeline know-how etc.
network
Enhancement of operating
activities creating
further growth uous growth
Contin

Production：
563,000BOE/D Acquisition of new resources in current
operating areas as well as new region

Early commercialization of large projects

such as Kashagan, Ichthys, Abadi, etc.

Central/
Indonesia Australia Caspian sea South North Africa New region
America

FY2009 FY2015-2020

30
Contact Information

INPEX
Corporate Strategy and Planning Unit / Public Affairs Unit
Director, General Manager Corporate Strategy and Planning /
Public Affairs Unit
Seiya Ito
TEL: +81-3-5448-1238 (Corporate Strategy and Planning) /
1205 (Public Affairs Unit)

Teikoku

Corporate Management Department

Senior General Manager
Shuhei Miyamoto
TEL: +81-3-3466-1233

31