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Press Release

Conclusion of Memorandum on Examination of
Joint Business in Chiba Refineries

June 18, 2014
Cosmo Oil Co., Ltd.
TonenGeneral Sekiyu K.K.

Cosmo Oil Co., Ltd. (Representative Director and President: Keizo Morikawa) and TonenGeneral Sekiyu K.K. (Representative Director and President: Jun Mutoh) have been examining the joint business of their Chiba refineries (Chiba refinery of Cosmo Oil: Processing capacity of 240,000 BPD, Chiba refinery of Kyokuto Petroleum Industries in the TonenGeneral Group: Processing capacity of 152,000 BPD; hereinafter, the "both refineries") in Chiba district (as already announced).

We hereby announce that the both companies have confirmed the specific matters to be continuously examined in the future and concluded a memorandum as below, based on the examinations up to now toward realization of the joint business.

Background The both companies have agreed on the recognition that they "aim for a top-ranked refinery with global competitiveness" by integrating the both refineries. Accordingly, they continue discussions based on the memorandum toward realization of the joint business and are headed to conclude a basic agreement within this year.
Conclusion date June 18, 2014
Principal points Major specific matters to be examined continuously in the future
  • We aim to establish a joint business company by January 2015. The company shall be a limited liability company, where equal and fair operation is sought.
  • After the joint business company is established, we gradually address the creation of synergy in relation to operations in refineries.
  • We initiate detailed design of pipelines connecting the both refineries and try to complete them in FY2016.
  • We centralize the refining facilities at the time of completion of the pipelines to integrate the refineries.
    * In order to create an integration synergy, we consider optimizing the facilities including reviewing the capacity of crude distillation units.
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