Annual Report 2013

Net Sales? Sales prices increased on the back of an upswing in crude oil pricesresulting from the weak yen? Turning to foreign currency exchange markets, the value of the yenappreciated from a rate of ?83 per U.S. dollar as of the beginning ofthe period to ?77 yen per U.S. dollar in September 2012. Thereafter,growing expectations toward extensive monetary relaxation policiesadopted by the Bank of Japan drove down the value of the yen to?96 per U.S. dollar in March 2013.‘03Apr.?Dec.‘13‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 Jan?Mar1501209060300(US$/barrel)(FY)Crude Oil CIF Prices (April 2003 ? March 2013)100608040200’90 ’11 ’15 ’20 ’25 ’30 ’35(Million barrels/day)(FY)Outlook for Global Demand for Petroleum ProductsOECD countries Non-OECD countriesInternational marine bunkers 6420’90 ’11 ’15 ’20 ’25 ’30 ’35(Million barrels/day)(FY)Outlook for Demand for Petroleum Products in JapanOperating Income Excluding the Impact of Inventory Valuation? On an operating income basis, earnings in the oil exploration and productionbusiness improved due mainly to the increase in crude oil prices. In contrast,earnings declined in the petroleum business owing largely to weak marketconditions in Japan’s four mainstay products and declining demand.Net Loss? Tax expenses increased due mainly to the reversal of deferred income taxesattributable to a review of the realizability of deferred tax assets? During the fi scal year under review, the Company provided for lossesrelating to the closure of the Sakaide Refi nery. At the same time, Cosmo Oilincurred an extraordinary loss in connection with fi xed costs relating to thesuspension of operations at the Chiba Refi neryOIL EXPLORATION AND PRODUCTION BUSINESS PETROLEUM BUSINESS01,0002,0003,0004,000(FY) ‘07 ‘08 ‘09 ‘10 ‘11 ‘12(Billion of yen)Net Sales3166.7-100-50050100(FY) ‘07 ‘08 ‘09 ‘10 ‘11 ‘12(Billions of yen)Operating Income (Loss) Excluding the Impact ofInventory Valuation, Net Income (Loss)37.1-85.9Consolidated Financial Highlights Market Environment FeaturesWhat sets COSMO Oil apart?Core Areas:Abu Dhabi, United Arab Emirates (U.A.E.)? Fiscal 2012 crude oil production volumeAbu Dhabi Oil Co., Ltd. 21,062 barrels/dayUnited Petroleum Development Co., Ltd. (Abu Dhabi &Qatar ocean boundary) 13,447 barrels/day? Acquired a new concession agreement for the Hail OilField with plans to commence production in fi scal 2016Qatar? Fiscal 2012 crude oil production volumeQatar Petroleum Development Co., Ltd. 7,047 barrels/daySub-Core Areas:Australia? Plans in place for the drilling of exploration wells at theAC/P4 mining lotUAE 29.5Saudi Arabia 24.8Qatar 13.7Kuwait 12.8Other 19.2Crude OilImport Share byCountryFY2012 (%)Trends in the Ratio ofCrude Oil Self-DevelopmentFiscal 2010 approx. 4.6% Fiscal 2012 approx. 5.5%Marketing Structure by Petroleum ProductsPetroleum Product SSs Companies Overseasin Japan in Japan ExportLP gas Gasoline Naphtha Kerosene Jet fuel Diesel fuel Heavy fuel oil A Heavy fuel oil C Asphalt Source: IEA “World Energy Outlook 2012” Source: IEA “World Energy Outlook 2012”Total Refi ning Capacity (Barrels/day)? Chiba Refi nery Refi ning Capacity: 220,000? Yokkaichi Refi nery Refi ning Capacity: 175,000? Sakai Refi nery Refi ning Capacity: 100,000? Sakaide Refi nery Refi ning Capacity: 140,000Scheduled to close in July 2013Total: 635,000Trends in Refi nery Capacity Utilization RatesFiscal 2012 82% After closure of the Sakaide Refi neryin July 2013 over 90% (estimate)* Utilization rates excluding the impact ofregular repairs, maintenance, andother factors* Companies in Japan: major electric companies,airlines, and other companies Operating income (loss) excluding the impact of inventory valuation Net income (loss)