Integrated Report 2023 [PDF:6.

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Integrated Report 2023

For the period ended December 31, 2023

INPEX CORPORATION Integrated Report 2023	Introduction	Value Creation	Growth Strategy	A Company Capable of	Financial and
Sustainable Development	Other Information

Introduction

Our Mission

We are committed to contributing to the

creation of a brighter future for society through our efforts to develop, produce and deliver energy in a sustainable way.

Sustainability Principles

The INPEX Group is committed to continue fulfilling its corporate social responsibilities through its business activities as a credible company while increasing its corporate value sustainably over the medium- to long-term.

001

INPEX CORPORATION Integrated Report 2023	Introduction	Value Creation	Growth Strategy	A Company Capable of	Financial and
Sustainable Development	Other Information

002

About Our Reporting

Reporting Highlights

We have incorporated information with the aim of straightforwardly conveying our business activities within the reporting period from both financial and non-financial perspec- tives. In editing this Integrated Report, we aimed to straightforwardly communicate our financial strategy, investment strategy, and capital allocation in an integrated manner, with a focus on implementing management that is conscious of the cost of capital and share price and have included a dialogue between the Senior Vice President of Finance & Accounting and the Senior Vice President of Corporate Strategy & Planning on page 27. It also provides more information on corporate governanceand safety managementinitiatives and other ESG factors compared to previous editions. We will continue working to enhance the information covered by our Integrated Report as a communication tool contributing to dialogue with our stakeholders.

Scope of Coverage

Period covered: January 1, 2023, to December 31, 2023

Organizations covered: INPEX CORPORATION on a non-consolidated basis and the INPEX Group

Accounting Standards: International Financial Reporting Standards (IFRS) since the fiscal year ended December 31, 2023. (Japanese Generally Accepted Accounting Principles ("Japanese GAAP") until the year ended December 31, 2022)

Reference Guidelines

We have referred to guidelines such as the International Integrated Reporting Council's (IIRC's) International Integrated Reporting Framework and the Guidance for Collaborative Value Creation issued by Japan's Ministry of Economy, Trade and Industry (METI).

Publication

July 2024

FORWARD-LOOKING STATEMENTS

This Integrated Report includes forward-looking information that reflects the Company's plans and expectations. Such forward-looking information is based on the current assumptions and beliefs of the Company in light of the information currently available to it, and involves known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors could cause the Company's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by such forward-looking information. Such risks and uncertainties include, without limitations, fluctuations in the following:

the price of and demand for crude oil and natural gas;

exchange rates; and

the costs associated with exploration, development, production and other related expenses.

The Company undertakes no obligation to publicly update or revise any information in this Integrated Report (including forward- looking information).

Communication Tool Map

Financial InformationNon-financial Information

	Integrated Reports
	Securities Reports
	(available in Japanese only)
Earnings Reports			Sustainability Reports

Financial Results Investor		Corporate Governance Reports
Meeting Materials
Notice and Material of Ordinary General Meeting
of Shareholders

Shareholder Newsletters

(available in Japanese only)

INPEX's Website (Investor Relations)

Corporate Brochures

INPEX CORPORATION Integrated Report 2023

Contents

Introduction

Value Creation

Growth Strategy

A Company Capable of Sustainable Development

Financial and

Other Information

003

001	Introduction	001	Our Mission/Sustainability Principles	002	About Our Reporting	003	Contents
004	Value Creation	005	Message from the President & CEO	015	INPEX Strengths	022	Sustainability Highlights
			011	INPEX's Business	017	Value Creation Process
			013	A History of Value Creation	018	Financial and Operating Highlights
024	Growth Strategy	025	INPEX Vision @2022 Long-term Strategy	035	Project Overview: O&G Business	047	Project Overview:
			026	INPEX Vision @2022 Medium-term	035	Ichthys LNG Project		5 Net Zero Businesses
				Business Plan	037	Abadi LNG Project	047	Hydrogen and Ammonia
				039	Abu Dhabi
			027	048	CCS/CCUS/Methanation
			Dialogue: Senior Vice President, Finance	041	Norway Projects
			049	Renewable Energy
				& Accounting and Senior Vice President,	043	Japan	050	Forest Conservation
				045	Milestones and Business Policies by
				Corporate Strategy & Planning	051	Technical Strategies
			033	Financial Information by Segment		Business Field: 5 Net Zero Businesses
			034	Milestones and Business Policies by Business
				Field: Ichthys Project and O&G Business
053	A Company Capable	054	Sustainability Management	064	Health & Safety	070	Human Capital
		of Sustainable	055	Risk Management	066	Environment	073	Promotion of Diversity
		Development	056	Sustainability Material Issues:	068	Local Communities	074	Roundtable with Outside Officers
				Targets and Achievements	069	Respect for Human Rights	078	Corporate Governance
			060	Climate Change
093	Financial and Other	094	11-Year Financial Information	099	INPEX Green Finance	100	Oil and Gas Reserves and
		Information	096	Management's Analysis of Financial Condition,		Annual Report	103	Production Volume
				Financial Results and Cash Flows			Corporate Information

INPEX CORPORATION Integrated Report 2023

Introduction

Value Creation

Growth Strategy

A Company Capable of Sustainable Development

Financial and

Other Information

004

Value Creation

IntegratedNPEX CORPORATIONReport 2023Integrated Report 2023

Message from

the President & CEO

Introduction

Value Creation	Growth Strategy	A Company Capable of	Financial and
Sustainable Development	Other Information

We will promote the supply of energy with a long-term view to bring about

a sustainable future.

Changes in the energy landscape have clouded the direction in which we must move to realize a net zero carbon society, and we must transition while considering the future. Takayuki Ueda spoke about the transition INPEX plans to execute.

Takayuki Ueda

005

Representative Director, President and CEO

INPEX CORPORATION Integrated Report 2023

Message from the President & CEO

Introduction

Value Creation

Growth Strategy

A Company Capable of Sustainable Development

Financial and

Other Information

006

Formulating a solution to the emerging trilemma

In recent years, the environment surrounding the energy industry has changed dramatically. Until a few years ago, the industry's primary challenge was how to transition to decarbonization in response to climate change issues. Since Russia's invasion of Ukraine, however, soaring oil and gas prices and a tight supply-demand balance have combined to spark the emergence of a trilemma: the emphasis is on ensuring energy security and affordability (stable quantities and prices), but these two factors must be balanced against sustainability-or environmental considerations toward decarbonization-and simultaneously addressed.

Amid these conditions, the term "transitional fuels" was used in the final agreement document of the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) held in Dubai, United Arab Emirates, in November and Decem- ber 2023. In terms of the transition, natural gas-particu- larly liquefied natural gas (LNG), which, among fossil fuels, emits a relatively low volume of CO2 when burned compared with oil or coal-is expected to play a key role. This is the industrial sector's shared understanding.

Meanwhile, perceptions have shifted regarding the path to a net zero carbon society. There is a growing recognition that diverse pathways need to be considered. The speed and methods employed will have to reflect the circumstances and conditions of each country and region. Certain countries and regions, for instance, could accelerate the shift to renewable energy sources. In countries and regions that rely on fossil fuels, co-firing of ammonia to reduce CO2 generation will be necessary during the transition.

In light of these changes, we at INPEX will fulfill our responsibility to provide a stable supply of energy. First, we will firmly expand our business with a focus on LNG. At the same time, we will reinvest revenues into clean energy development, with the aim of becoming a world-leading company as a pioneer in energy transition.

LNG as transitional energy

Significant growth is forecast in global demand for LNG, particularly in Asia. One reason for this is that although many Asian countries have traditionally produced and consumed natural gas locally, economic development has resulted in demand growth outpacing production within the Asian region. LNG imports from outside the region are expected to rise in order to satisfy this demand. The second reason is linked to the spread of renewable energy. Demand for natural gas is likely to increase as fuel for backup power sources to compensate for the variability of renewable energy power generation.

Since the invasion of Ukraine, European countries that had been importing oil and gas through pipelines from Russia are now moving to accept LNG imports with the aim of reducing their dependence on Russia.

LNG is the pillar of INPEX's core oil and natural gas business, whose cornerstone is the Ichthys LNG Project, for which operations were launched in 2018 off the coast of Australia. The project generates approximately 8.9 million tons of LNG annually, more than 10% of the LNG Japan imports each year. Over 70% of this amount is supplied to Japanese customers.

The Ichthys LNG Project serves as the foundation of our business, generating about 70% of our profits, but

from a management perspective, we need to shift away from this overly focused approach and reduce our dependence on Ichthys. Based on this thinking, we have been working to launch the Abadi LNG Projectin Indonesia as the next growth driver, and we aim to begin production around 2030. We are planning for annual LNG production of 9.5 million tons-the same scale as Ichthys-and we will provide it not only to Japanese customers but also to satisfy the growing LNG demand in Asia.

INPEX CORPORATION Integrated Report 2023

Message from the President & CEO

Introduction

Value Creation

Growth Strategy

A Company Capable of Sustainable Development

Financial and

Other Information

007

Developing, producing, and delivering energy in a sustainable way

As stated in our Mission, "we are committed to contributing to the creation of a brighter future for society through our efforts to develop, produce and deliver energy in a sustainable way." The operation of both the Ichthys and Abadi projects will contribute to satisfying the increasing

demand for LNG, which is seen as a transitional energy source, and is nothing less than the realization of our Mis- sion. In terms of developing, producing, and delivering energy in a sustainable way, however, it will take further efforts to reduce CO2 emissions and realize net zero carbon.

Despite the environmental characteristics of LNG being superior to those of oil and coal, CO2 is emitted during the LNG combustion process. To reduce emissions, we intend to introduce carbon capture and storage (CCS)- one of our 5 net zero businesses-into our LNG projects to mitigate emissions. CCS is a technology for geological storage of CO2 that has been separated and captured. The Ichthys LNG Project has been awarded a CCS assessment block by the Australian government, and we plan to drill wells and conduct a storage assessment in 2024. For the Abadi LNG Project, our intention from the beginning has been to introduce CCS with a view to decades-long production, and we will proceed while consulting with the Indonesian government.

By making LNG-which boasts excellent environmental characteristics-even cleaner through the introduction of CCS developing renewable energy, hydrogen, ammo- nia, and other clean energy sources as part of our 5 net zero businesses, we hope to establish INPEX as a major player in the energy industry today and into the future.

Advantages demonstrated by the Abadi LNG Project

The start of operations of the Abadi LNG Project is a turning point for the future of INPEX, and we have great expectations for it as a new growth pillar. With the Ichthys LNG Project, INPEX became the first Japanese company to serve as the operator of a large-scale LNG project, and through its success, we secured a tremendous reputation and trust both in Japan and abroad. Moreover, by acting as operator of the Abadi LNG Project and effectively

doubling our supply capacity, we will be able to rapidly strengthen our presence in the energy market and further enhance our position. At the same time, we must be aware of our even more significant social responsibility to satisfy the world's energy demand and support a stable supply.

We believe that the Abadi LNG Project will allow us to demonstrate unique advantages. One such advantage is the ability to leverage the technological capabilities, human resources, and various experience and knowledge that we cultivated through the Ichthys LNG Project. The deployment and effective use of these resources will ensure the smooth launch and operation of the Abadi LNG Project.

The other advantage lies in the operating conditions, which center on extraction and delivery work in Indonesia. With the global situation evolving and geopolitical risk continuing to spread, it will be necessary to avoid risks by producing and delivering LNG in a way that is as close as possible to a "local production for local consumption" model. The large demand for LNG within Indonesia and the expected concentration of other customers mainly in Japan and Asia mean that the Abadi LNG Project will be supplying LNG within a compact area, making its value very significant.

In the fiscal year ending December 31, 2024 (fiscal 2024), we intend to conduct a variety of offshore and onshore surveys and bid on front-end engineering design (FEED) work while pressing forward with marketing and financing initiatives.

INPEX CORPORATION Integrated Report 2023

Message from the President & CEO

Introduction

Value Creation

Growth Strategy

A Company Capable of Sustainable Development

Financial and

Other Information

008

Focus themes and future developments in our 5 net zero businesses

With its oil and natural gas business at the core, INPEX delivers solutions that contribute to the reduction of CO2 emissions in five areas: CCS, renewable energy, hydrogen and ammonia, forest conservation, and carbon recycling and new business opportunities, with a view to achieving a net zero carbon society. Our long-termstrategycalls for growth investment of up to 1 trillion yen in these 5 net zero businesses from fiscal 2022 to fiscal 2030.

All these fields are vital for the future of the energy business, but the CCS field requires top priority. As explained earlier, CCS has been introduced in the Ichthys and Abadi LNG projects, and for reasons including its connections to the hydrogen and ammonia business, it has significant synergy with other INPEX businesses. CCS is currently the only technology capable of large-scale CO2 emission reduction, is being implemented in numerous countries, and has tremendous potential for growth. For the time being, INPEX will leverage CCS to reduce CO2 emissions from its own operations, but going for- ward, it intends to respond to other companies' CO2 reduction needs by turning CCS itself into a business.

Renewable energy is the next major area of focus. Our commercialized projects, most of which are over- seas, include offshore wind power initiativesin Europe and geothermal power activitiesin Indonesia and Japan. In Australia in July 2023, we established a joint venture with Enel Green Power, Europe's largest renewable energy firm. We will construct a framework that is not simply a power generation business but encompasses the entire renewable energy value chain-from planning to

construction, power generation, retail, and storage- and is also profitable.

As true clean energy sources that do not emit CO2 when burned, hydrogen and ammonia are our focus. We are also taking on cutting-edge initiatives. With regard to hydrogen, we are building a plant in Kashiwazaki City in Japan's Niigata Prefecture to demonstrate blue

hydrogen production, which uses CCS to reduce the CO2 emitted when hydrogen is produced from natural gas. Concerning ammonia, we are involved in a joint project with companies overseas to commercially produce low-carbon ammonia in the US state of Texas. We hope to be at the forefront in the market as a first mover in this domain, but this will require a certain level of

INPEX CORPORATION Integrated Report 2023

Message from the President & CEO

Introduction

Value Creation

Growth Strategy

A Company Capable of Sustainable Development

Financial and

Other Information

009

investment and risk-taking. Demand for hydrogen and ammonia, however, is expected to arise among and around existing customers of oil and natural gas, so we believe that as a first mover, we can establish a dominant position by launching the market together with these customers while also leveraging the supply routes and value chains of existing businesses.

Innovation is also crucial to the future of the energy business. We will need to develop technologyto realize cleaner energy and reduce costs. As such, in January 2024, we launched the Innovation Division and established a framework to focus our efforts on accelerating energy transformation (EX).

Adopting management that is conscious of cost of capital and stock price

While impairment losses caused a year-on-year decline in profit in fiscal 2023, INPEX recorded the second highest profit in its history, buoyed by favorable oil prices and foreign exchange rates. Judging from our current share price, however, we recognize that the stock mar- ket's assessment of INPEX has room for improvement and that we need to work to increase the price book- value ratio (PBR), which is still under 1.0. Meanwhile, we believe that stock market valuations do not fully reflect all aspects of corporate value.

In response to a request from the Tokyo Stock Ex- change, which asks that listed companies "implement management that is conscious of cost of capital and stock price," we conducted a series of internal discussions

through which we identified the following three issues affecting stock market valuations.

The first issue is that our corporate management efficiency falls short when compared to the return on equity (ROE) and other performance indicators of supermajors (international oil supermajors). The second centers on concerns about our future potential due to the risk of fossil fuel-related assets becoming stranded. And the third is uncertainty regarding the company's outlook for enhanced shareholder returns.

To address these issues, we will first include return on invested capital (ROIC) in measurement and evaluation to improve capital efficiency and maintain a level exceeding our weighted average cost of capital (WACC). In terms of our business strategy, we will work to capitalize on the medium- to long-term LNG demand expansion. In parallel with this, we will clearly set forth the potential of the clean energy field-our area of focus-and, through dialogue with investors, seek to earn recognition and widespread understanding in the stock market. INPEX intends to implement these measures in an integrated manner, together with the increase of shareholder returns, and we expect this to lead to an appropriate assessment of corporate value.

Financial and capital policies in the next Medium-term Business Plan

Looking at financial and capital policies, interest-bearing debt has increased due to our priority investment in the Ichthys LNG Project-which we have been undertaking for some time-and where financial soundness is con- cerned, this has become an issue. For this reason, our current Medium-termBusiness Plan 2022-2024set forth the following priorities in terms of the allocation of operating cash flow: reducing interest-bearing debt first, strengthening shareholder returns next, and then making growth investments.

During the initial two years of the plan's implementa- tion, however, owing to rising oil prices and the steady operation of the Ichthys LNG Project, our performance was strong, enabling us to generate operating cash flow surpassing initial expectations. Operating cash flow for the three-year period of the plan-including the forecast for fiscal 2024-is projected to total 2.85 trillion Japanese yen, an upward revision of over 1 trillion Japanese yen. We have succeeded in making significant progress in reducing interest-bearing debt, and due to the low net bor- rowings, our current net debt-to-equity (D/E) ratio is 0.3, already healthy enough for us to be considered financially sound.

The next Medium-term Business Plan, set to begin in fiscal 2025, will be developed in the coming months. In that plan, regarding future financial and capital policies, the operating cash flow allocation policy will be adjusted in light of these circumstances, with higher priority being given to increasing shareholder returns and growth investment.