Dear All

January 4, 2022

2022 New Year's Message by President Hosoi

Please be informed of New Year's Message from our president Mr HOSOI to employees, which was addressed in January 4, 2022 by online streaming as follows;

Happy New Year to everyone at the JX Nippon Oil & Gas Exploration Group.I hope you all had a chance to refresh over the New Year's holidays.

I would also like to express my sincere appreciation for everyone around the world who worked during the New Year's holidays to ensure operations ran safely and smoothly.

Looking back on the previous year, we saw the price of oil, which experienced a sharp decline in 2020, rise back to be over $80 a barrel at one point due to the resumption of coordinated cuts in production, increases in COVID-19 vaccination rates, and other factors. Gas prices also spiked, pulled up by strong demand in Asia and Europe.

In addition, 2021 also saw an increased push toward decarbonization across the globe. At the COP26 Conference held from the end of October, an official agreement was reached that the increase in global average temperature should be below 1.5℃above pre-industrial times , resulting in taking hard look at fossil fuels in the realm of public financing.

Turning an eye to our company, 2021 was a year when we brought efforts to implement a "Two-Pronged" approach to management up to speed, focusing on our core business of"E&P business" , while also pursuing the environment-friendly business as a growth business.

With regard to the first prong - "E&P business" - within our core operator projects we continued safe & stable crude oil and natural gas production in Block 15-2 Vietnam and block SK10 in Malaysia. In terms of LNG projects, an area which is expected to remain a significant contributor to company cashflows in the future, progress is being made on Tangguh train project #3 in Indonesia despite the continued impact of COVID-19. Last year was also the year where we made the decision to sell out of our assets in the U.K. This decision was made as part of our broader portfolio strategy and represents a major step toward accelerating our "Two-Pronged" management.

For the second prong of our business, our environment-friendly business, we established the Sustainable Business Unit in April. New initiatives taken since the establishment of this Unit include our involvement in a joint study as part of the Australian Offshore CO2 Capture and Storage Hub Project "deepC Store". Further, the other environment-friendly business initiatives have been developed, including progress on a CCS project study in high CO2 gas fields in Malaysia, and investments into 8 Rivers, a company with proprietary zero-carbon power generation system, and clean hydrogen and ammonia-related technologies.

These are some of the ways we are repositioning our business in light of a rapidly changing business environment. The shift toward decarbonization can be viewed not as a threat, but as an opportunity to establish new competitive advantages. I hope to see us seize this opportunity to contribute to a sustainable society by further broadening our strengths in CCS/CCUS technologies and utilizing such technologies in our business at the earliest timing. Our company can take pride in being a front-runner in demonstrating the business applications of CCS/CCUS technologies ahead of our competitors, implementing such technologies into our business before the rest of the world caught on. Looking ahead, I hope our company can continue to lead the way in establishing a sustainable society by delivering social value.

Lastly, I would like to note that the execution of our business objectives relies on the physical and mental health and safety of all employees. I would like to extend my wishes for the health and prosperity of all employees, their partners, and their families, both in Japan and abroad, in the New Year.

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