1

Outline of Petroleum
Industry in Japan

By Kenichi Morota
Japan Cooperation Center, PetroleumJCCP
2
----Contents----
1. How is Japan
2. Petroleum Industry in Japan
3. Primary Energy Supply
4. Supply Situation of Crude Oil &
Petroleum Products
5. Petroleum Refining in Japan
6. Marketing and distribution in Japan
7. Summary
3
1. How is Japan
4
Outline of Japan
Land Area : 378,000 K Forest : 66.4 %
Agriculture : 13.1 %
Residential : 4.7 %
No. of Island : 4 Main Islands &
6,847 Small Islands

North-South Length : 3,500 Km
Surrounded by seas : A lot of good ports for sea
transportation and fishing
Locating monsoon area : Four seasons
Good for agriculture
5
Overview
4 main islands surrounded by
the sea.
Main cities located at shore side
Major Industrial areas :
in the large consumption areas



Population and Industrial Area

Total : 127.6 Million in 2012
Tokyo area
Nagoya area
Osaka area
34 Million
7 Million
14 Million
Japan Sea
Pacific Ocean
Pacific Belt
6
Pacific Belt
The Pacific Ocean Coast
Industrial Complex and Factories on the reclaimed land
Business Center The Kanto Plain
Transportation Network
in the Pacific Belt area
Mt. Fuji
Pacific Belt
Kanto Plain
7
The Japan Sea Coast
Kerosene is the most important
necessities of life as home heating
oil in winter season
Snow area in winter
Producing districts in summer
Dairy farm
Fishery
Rice field culture
Oil Heater
Mini Tank truck
Kerosene Dispenser
Home Tank
8

Hanshin Earthquake in 1995, Magnitude 7.3, Casualties 6,436
Land slide by earthquake
Fire caused by earthquake
Broken wooden house Broken road Damage by tidal wave
East Japan Earthquake in 2011, Magnitude 9.0, Casualties 23,000
9
Country Land Area Population GDP
Energy
Use
CO2
Emission
GDP /
person
GDP /
Energy
Emission
/ GDP

127 4,872 472 298
1.9% 12.3% 3.9% 3.8%
USA 6.9%
307
4.5%
11,357
28.6%
2,163
17.8%
1,417
17.9%
37.0 5.3 125
2.0
UK 0.2%
61.8
0.9%
1,677
4.2%
197
1.6%
127
1.6%
27.1 8.5 76
1.2
Russia 12.6%
142
2.1%
398
1.0%
647
5.3%
418
5.3%
2.8 0.6 1,050
17.2
China 7.1%
1339
19.8%
3,169
8.0%
2,272
18.7%
1,876
23.7%
2.3 1.4 592
9.7
World 100% 6,761 39,674 12,150 7,909 5.9 3.3 199
3.3
unit percent million
billion
US$
million
ton foe
million
ton -C
1,000US$
1000US$
/ ton foe
ton-C /
mil.US$
ratio
year
136 mil. km2
ex. Antarctica
2009 2009 2009 2009 2009 2009 2009 2009
1
(base)
Japan 0.3% 38.4 61 10.3
Source :CO2 Emissions from Fuel
Combustion 2011 (IEA)
Japan today in the world
J apan is using energy effectively and efficiently almost same level as UK.
Economic
Energy
Efficiency
GDP/
Capita
*GDP: Gross Domestic Product
10
2. Petroleum Industry in Japan
11
(Completely private sectors)
1. Primary distributors ( 7 Companies)
2. Refiners ( 13 Companies, 27 Locations)
( Affiliates of primary distributors)
@End of Mar. '11 ( @1994 )
Oil Market Dealers 21,068 (31,559 )
Service Staions 38,777 (60,421 )
*Self Service 8,449 ( 0 )
People who have experience 1. Major Industrial Consumers
or academic standing 2. General Consumers
Other Representatives Consumers
Oil Companies
Dealers & Service Stations
(Source : Registered No. based on the Law )
(as of April. '12)
Government
(METI)
Petroleum
Council
To make policy
recommendations
to METI
Ministry of
Economy, Trade
and Industry
Oil Industry Structure in Japan
12
.
AD668 Burning water (in the document )
1227 Smelling water (at Niigata)
1852 First domestic distillation
1867 Kerosene imported for a lamp
1888 Establishment of Nippon Oil Co.
1924 First refinery (in Yokohama)
1941 Government control for the war
1950 Re-opening of refineries along
the Pacific Ocean coast
2012 27 Refineries with 4,499,224b/d
Domestic crude oil production
14,000b/d (830,000kl/y )
(Supply Share only 0.3% )
History of the Petroleum Industry
13
Overview of the Japanese
Petroleum Industry

1. Number of Oil Companies : 16 All Private companies@2012)
2. Total Number of Employees : Approx. 20,500 Persons
3. Financial Position of Main 10 Oil Companies (2009 FY)

Total Sales Revenue : 22.754 trillion Yen (US$ 0.284 trillion)
Ordinary Income : 521 billion Yen (US$ 6.5 billion)
(exchange rate: 80/US$

4. Number of Refineries : 27 (Mar., 2012)
Total Refining Capacity (CDU) : 4,499 thousand b/d ( Mar , 2012)
5. Crude Import Volume : 207 Million KL/year (2011)
3,567 thousand b/d ( 2011)
6. Number of Service Stations : 32,743 ( March , 2011)



14
Sales Ranking of the Worlds Corporations (2011)
Rank Company Country Revenues Profits (Billion US$)
1 Wal-Mart Stores USA 421.9 16.4
2 Royal Dutch Shell Neth. 378.2 20.1
3 Exxon Mobil USA 354.7 30.5
4 BP UK 308.9 3.7
5 Sinopec China 273.4 7.6
6 China National Petroleum China 240.2 14.4
7 State Grid USA 226.3 4.6
8 Toyota Motor Japan 221.8 4.8
9 Japan Post Holdings Japan 204.0 4.9
10 Chevron USA 196.3 19.0
Japanese main 7 Petro. companies 283 6.5 (@2010)

Global 500 from Fortune

15
Focus on Oil Statistics
Unit: Million KL ( Million B/D)
Fiscal Year( FY)April to March
FY 1990 1995 2000 2010 Remarks
Crude Oil
Import
239(4.1) 226(4.6) 255(4.4) 214(3.7) 1973 : 289(5.0)
Domestic
Crude
1(0.0) 1(0.0) 1(0.0) 1.0(0.0) 14,000 b/d 0.3%
Refinery
Production
186(3.2) 227(3.8) 222(3.8) 208(3.6)
Products (Fuel)
Import
40(0.7) 38(0.7) 39(0.7) 33(0.5)
Mainly Naphtha
For Petro.Chem.
Domestic
Demand (Fuel)
218(3.8) 245(4.2) 243(4.2) 196(3.4)
Products (Fuel)
Export
7(0.1) 18(0.3) 15(0.3) 34(0.6)
Including Bonded
Jet / Bunker fuel
From PAJ
All Japan
16

To import crude oil and refine crude oil domestically in
Japan is the main policy of the petroleum industry to secure
the stable supply of petroleum products to consumer.
Petroleum Market is mainly driven by gasoline demand,
Import and export of petroleum products are done basically
in order to meet and adjust the balance of supply and
demand.
Due to the stable supply and economic reasons, Japanese
petroleum industry completely depends on the supply
sources of the Middle Eastern countries.
Energy demand growth is not expected now and on in
Japan.
Fundamental Situation
17
Features of Japans Oil Industry
Supplying About 50% of Japans Primary Energy
Relying on Overseas Resources (especially Middle East)
Increasing Light & Middle Distillate and Decreasing Fuel Oil
Making Great Efforts for Environment Protection
Facing the Very Severe Business Competition
J apanese oil industry has the following five features.
18
Historical Stage of the Industry
1888 Establishment of Nippon Oil Co.
1910 40: The 1
st
Stage of Modern Petroleum Industry in Japan
Standard Oil (SOCONY), Rising Sun (Former Shell)
2 Japanese companies. First refinery 1924 in Yokohama)
1945 55: Postwar Restoration Period
Introduction of foreign capitals and tie-up with western oil companies;
Standard Vacuum Oil, Caltex, Getty Oil, Royal Dutch Shell etc.
1955 72: High - growth Period
Accelerated energy revolution from coal to oil.
Japan achieved the worlds highest economic growth taking
advantage of low cost energy such as oil.
1962: Enforcement of Petroleum Industry Law
With the liberalization of trade, the government intended
to maintain well organized oil industry.
1973 1st Oil crisis
1973 : No- growth Period
1991 : Restructuring Period under economic recession
2001: Petroleum Industry Law (1962) abolished





19
Oil Crises and Japans Countermeasures
1st Oil Crisis
1973.10 1974.8
2nd Oil Crisis
1978.10-1982.4
3rd Oil Crisis
1990.8-1991.2
Trigger of Crisis
4
th
Middle East
War
Iranian
Revolution
Iraq Invasion
into Kuwait
Rise of Oil Price
($/Bbl)
from 3.0 to 11.6 from 12.8 to 42.8 from 17.1 to 36.9
Oil Stockpiling
Capacity
(Private / Government)
Government
Countermeasure
Social
Circumstance
238
88 days / 54 days
( 142 days )
Annual Crude Oil
Import (MMkl)
67 days / 0 days
( 67 days )
85 days / 7 days
( 92 days )
289 277
Stock up on
daily goods
Establishment of
Oil Stockpiling
Law
Establishment of
Energy Saving
Law
Requests not to
buy oil
at high price
Utilization of
Private Stockpiling
Oil
Utilization of
Private Stockpiling
Oil
Crisis
20
Oil Crises
Diversification of Energy Resources,
Nuclear, LNG, Coal, Hydro, Geothermal
Increasing National Oil Stockpiling
Promotion of Energy Saving
Enhancement of the relationship between
Japan and Oil supplying countries JCCP
Decreasing the reliance on oil,
especially on Middle East Oil
Japans Countermeasures after Oil Crises
J apanese government changed the Energy Policy after Oil Crises.
21
1962 Petroleum Industry Law
1976 Petroleum Reserve Law (Oil Stockpiling)
Deregulation
1986 Specific Law on the Import of Petroleum Products
(Importers have to fulfill the following conditions : Refining, Stockpiling and
Quality Adjustment for Gasoline, Kerosene & Gas Oil)
1987 Automatic Approval of Secondary Unit
1989 Gasoline Production Quota Abolished
1990 Service Station Construction & Conversion Abolished
1992 Crude Throughput Quota Abolished
1996 Specific Law Abolished : Free Product Import
(Re-regulated Law : Product Stockpiling Obligation, Product Quality Control)
1997 Free Product Export
1998 Introduction of Self-Serve Service Stations
2001 Overall Review : Petroleum Industry Law abolished
Deregulation Process in Japans Oil Industry
22
0
500
1,000
1,500
2,000
2,500
3,000
France Germany UK Japan M.E
Total
China Russia America Africa
Total
Hydraulic
Nuclear
Natural gas
Coal
Oil
Energy Consumption by Country in 2010
( Fuel Oil Equivalent 10
6
kl )
256
326
704
2,828
M
i
l
l
i
o
n

k
l

Sp.Gr. of F.O = 0.980kg/l
511
2,482
I n J apan, the largest share of energy consumption is Oil.
( China : Coal, Russia : Natural Gas, France : Nuclear,
213
716
361
23
3. Primary Energy Supply
24
0
100
200
300
400
500
600
1965 1973 1985 1995 2000 2005 2006 2007 2011
Others
Hydraulic
LNG/NG
Nuclear
Coal
Oil
172
393
557 545
(59.6)
(56.3)
(55.8)
(45.3)
(19.4)
(20.3)
(0.6) (8.9)
(12.0)
(17.4)
(1.5)
(9.4)
(10.8)
(11.0)
(4.1)
(4.8)
(3.5)
(3.0)
(0.9)
(1.2)
(1.3)
(3.0)
(16.5)
(17.9)
(12.4)
(51.8)
(3.4)
(13.1)
(1.3)
(15.5)
Unit : Mil. Kl- FOE
( ) : Share %
Primary Energy Supply in Japan
(77.4)
(49.9)
(27.0)
(0.0)
(1.2)
(10.6)
(1.5)
413
563
(20.4)
(11.4)
(14.0)
(3.0)
(1.3)
511
9,800 Kcal/l-FOE base
10
6
kl
The energy supply is gradually increasing, according to industrial development
and improvement of standard of living, but oil ratio is decreasing since 1973,
due to the policy of diversification of energy sources.
559
(21.5)
(47.9)
(11.4)
(15.4)
(3.5)
(1.3)
561
(47.8)
(21.4)
(9.9)
(16.6)
(2.9)
(1.3)
25
Trend of Energy in Japan : Quantity
0
50
100
150
200
250
300
350
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Coal Oil Natural Gas Hydro Nuclear Others
10
6
kl
1
st
Oil crisis
2
nd
Oil crisis
3rd Oil crisis
Deregulation
1st step 2nd step
26
0%
20%
40%
60%
80%
100%
120%
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Coal Oil Gas Hydro Nuclear Others 10
77.4% 73

49.0% 05
47.907
41.0% 09
Trend of Energy in Japan : Share
Share of Nuclear does not increase, because some troubles ( Ex. I nspection data
manipulation, Crack of turbine shroud etc.) and one accident had occurred from 1999 to
2004 (Rupture of line caused four mens death) at some Nuclear power plants.
27
4. Supply Situation of
Crude Oil Petroleum Products
28

Crude Oil Import & Middle East share
40
50
60
70
80
90
100
0
50
100
150
200
250
300
350
60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
91.2 (1967)
289
188
274
67.9%
277
MMKL
%
89.5
Japans oil import had rapidly increased until 1973 when 4
th
M.E war happened.
Japans oil reliance on the Middle East Countries is increasing from 87 and
reached to almost 90% share.
FY
86.9(2010)
Q
u
a
n
t
i
t
y

M
i
d
d
l
e

E
a
s
t

S
h
a
r
e

Quality Share
29
Japans Crude Oil Import by Source
Million. kL % Million. kL % Million. kL % Million. kL %
UAE 36.6 14.7 51.0 21.5 61.7 25.4 48.1 23.2
Saudi Arabia 82.2 33.0 46.6 19.5 72.9 30.0 63.1 30.5
Iran 5.7 2.3 25.5 10.7 28.0 11.5 18.2 8.8
Qatar 8.6 3.5 14.3 6.0 24.9 10.2 22.0 10.6
Kuwait 8.8 3.5 4.5 1.9 17.2 7.1 13.8 6.7
Divided Zone 13.4 5.4 8.3 3.5 5.4 2.2 4.0 1.9
Oman 8.7 3.5 15.2 6.4 3.7 1.5 4.5 2.2
Iraq 13.8 5.5 4.7 1.9 2.4 1.0 5.7 2.8
Others 0.3 0.1 0.3 0.1 0.5 0.2 0.4 0.2
Sub total 178.1 71.5 170.4 71.5 216.8 89.2 179.8 86.9
Brunei/Malaysia 13.1 5.3 7.6 3.2 3.0 1.2 2.1 1.0
Indonesia 37.4 15.0 29.9 12.6 6.9 2.8 6.6 3.2
China 9.5 3.8 15.5 6.5 1.0 0.4 0.4 0.2
Others - - 2.9 1.2 1.8 0.7 1.2 0.6
Sub total 60.0 24.1 55.9 23.5 12.6 5.2 11.7 5.7
Nigeria 0.6 0.3 - - 1.5 0.6 0.4 0.2
Sudan 6.3 2.6 2.8 1.4
Others 2.6 1.0 1.0 0.4 0.8 0.3 1.1 0.5
Sub total 4.4 1.8 1.0 0.4 8.5 3.5 4.3 2.1
Venezuela 2.5 1.0 0.5 0.2 - - - -
Australia 1.9 0.8 1.6 0.8
Mexico 2.1 0.8 8.8 3.7 0.0 0.0 0.0 0.0
Russia 1.8 0.7 8.8 4.3
Others 2.1 0.9 1.7 0.7 1.5 0.6 0.7 0.3
Sub total 6.7 2.7 11.0 4.6 5.2 2.2 11.1 5.4
249.2 100.0 238.5 100.0 243.1 100.0 207.0 99.9
2006
Area Country
Total
1980 1990 2011
Middle
East
Asia
Africa
Others
30
3.2
1.6
1.8
2.2
1.5
1.9
3.7
3.3
7.7
74.3
74.4
75.0
67.3
64.2
61.3
59.7
44.4
14.3
2011
2006
2005
2000
1995
1990
1985
1980
1975
Internatinal Major Oil Co. Independent Oil Co.
Oil Producing Country Natinal Co. Japanese Oil Exploring Co.
Japans Crude Oil Import by Supplier
Japan has long been tackling to exploit oil resources in overseas countries since 1950s.
But most of Japanese exploiting activities failed so far.
Recently, Japanese oil exploiting companies have found oil fields and their
total production accounts for about 5% of Japans oil import.
31
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Gasoline Naphtha Jet-Fuel Kerosene Gas-Oil FOA FOB FOC
10
3
kl
FOC
Deregulation 86
Product Oil Import in Japan
Naphtha for Petrochemical
32
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
Gasoline Naphtha Jet-Fuel Kerosene Gas Oil FOA FOB FOC
Product Oil Export in Japan
10
3
kl
Before de-regulation, only Fuel Oil for Crude Tankers & J et Fuel for
I nternational Airplane had counted export statistically.
Jet Fuel
Fuel Oil
Deregulation 86
33
0
20
40
60
80
100
120
140
160
180
200
1977 1980 1990 1999 2001 2003 2005 2007 2009
90
81
90
92
88
74
72
78 77 78
74 74
78
80
77
81
85
0
7
10
35
54
76
84
85
89
91
88
92
90
95
99
102
113
Private Company Government
198
183
End of Fiscal Year
D
a
y
s

Oil Stockpiling Capacity in Japan
90
100
127
142
150
156
163
169
175
162
166
168
I n J apan, Oil Stockpiling Law was enforced in 1976.
Private Oil Companys obligation days : 90 70
The final target of the governmental oil stockpiling is 50 million kl as crude oil.
88
166
177
34
Location of National Oil Stockpiling Bases
10 Bases
National Oil Stockpiling
Tomakomai Tobu
5.43 (6.4)
Mutsu Ogawara
4.96 (5.7)
Kuji 1.67 (1.75)
Shibushi 4.30(5.0)
Kikuma 1.33(1.5)
Kushikino
1.68(1.75)

Shirashima 4.75(5.6
Kami-Goto
3.42(4.4)

Fukui 2.84(3.4)

Akita 3.97(4.5)
National Stockpiling Base 34.33
Rental from Private Co. 15.78
Total Actual Stockpiling 50.11
@End of Mar.2011
Unit : Million KL
National Oil Stockpiling
Total Capacity ( 40.0 Million kl)
35
Oil Stockpiling Bases in Japan
Kami-Goto Base in Kyusyu
(Government)

Capacity: 4.4 million KL(0.88 x 5unit)
390mL x 97mW x 27.6mD / 1Unit
(Actual : 3.42mil.kl @end of May.10)
Kiire Base in Kyusyu
(Private Company)

Capacity : 7.35 million KL
(2.4mil.kl lend to Gov.@May.10)
0.16(22.6mH x 100.1mD : 24unit)
0.11(22.6mH x 81.5mD : 30unit)
0.05(21.3mH x 58.1mD : 3unit)
36
Trend of Oil Demand Ratio in Japan
0%
20%
40%
60%
80%
100%
1980 1990 2000 2004 2006 2010
38
20
12.9
11.2
10.1
8.8
10
12
12.1
12.3
10.7
7.9
10
18
17.2
16.1
16.4
16.8
11
12
12.3
11.8
10.9
10.4
1
2
1.9
2.1
2.4
2.6
13
15
19.6
20.7
22.4
23.8
17
21
24.0
25.9
27.1
29.7
O
i
l

D
e
m
a
n
d

R
a
t
i
o

Heavy Fuel Oil Light Fuel Oil Diesel Gas Oil Kerosene Jet Fuel Naphtha Gasoline
Heavy fuel oil demand has been decreasing continuously,
Because 1. Power Generation I ndustry converted fuel from oil to natural gas
and 2. Steel Manufacturing I ndustry is decreasing its production
due to the disadvantageous competition.
37
Production Import Sub-Total
Gasoline 58,388 1,098 59,486
Naphtha 20,116 27,215 47,331
Jet Fuel 14,019 43 14,062
Kerosene 19,620 1,053 20,673
DGO 42,994 444 43,438
Fuel Oil 39,832 3,215 43,047
Sub-Total 194,969 33,068 228,037
Import 215,381 99.6%
Domestic 805 0.4%
Total 216,186 100%
208,633 98%
Product Oil Import 33,068
Oil Company
Trading Company
Other Company
Overall Oil Flow and Balance in 2010
Unit : 1,000 kl
Electric Companies 0
Domestic Export Sub-Total
58,197

2,198 60,395

46,668 - 46,668
5,154 14,090
20,332 198 20,530
32,864 11,046 43,910
32,734

7,905

40,639
195,949 30,283 226,232
8,936
Sales of Petroleum Products
38
LPG Supply and Demand in Japan
Saudi
Arabia
23%
UAE
26%
Qatar
26%
Kuwait
11%
Australia
10%
Iran
6%
Malaysia
1%
Others
3%
Korea
0%
Algeria
1%
LPG Import
LPG Supply in FY 2010
Import 12,510 (75%)
Production 4,082 (25%)
Total 16.59 Mil. ton
Home Use
53.8%
General
Industry
17.2%
Chemical
Industry
14.1%
Town Gas
5.8%
Car Fuel
7.2%
Power Plant
1.9%
LPG Demand (2010)
16.2 Mil. ton
2010
LPG Stock 50 Days
75%: I mport, 25%: Generated at Refineries
LGP is used for : Home Use, General I ndustry, Chemical I ndustry.
City Gas, Car Fuel, etc.

39
LNG Supply and Demand in Japan
Domestic production of Natural Gas is only 4.0% on demand in FY 2010.
Malaysia & Australia & I ndonesia are big suppliers.
LNG is used for : Power generation (60%) and Town gas (40%)
Indonesia
Malaysia
Australia
Qatar
Brunei
UAE
Russia
Oman
USA
LNG Import in FY 2010 70,562,000 Ton

Ton
Import 70,562,000 (96.0 %)
Domestic Product 2,700,000 ( 4.0%)
Total 73,262,000 (100%)
Indonesia
18.3%
Malaysia
20.7%
Australia
18.8%
Brunei
8.4%
Qatar
10.9%
UAE
7.2%
Oman
4.2% Russia
8.5%
40
5. Petroleum Refining in Japan
41
Idemitsu (Hokkaido) 140,000
JX Energy. (Muroran) 180,000
JX Energy. (Sendai) 145,000
Teikoku (Kubiki) 4,724
Kashima (Kashima) 252,500
Cosmo (Chiba) 220,000
Kyokuto (Chiba) 175,000
Idemitsu (Chiba) 220,000
Fuji (Sodegaura) 140,000
JX Energy. (Negishi) 270,000
Tonen-General (Kawasaki) 335,000
Toa (Keihin) 65,000
Idemitsu (Aichi) 160,000
Seibu (Yamaguchi) 120,000
Idemitsu (Tokuyama) 120,000
JX Energy. (Marifu) 127,000
JX Energy. (Mizushima) 400,000
Tonen-General (Sakai) 156,000
Cosmo (Sakai) 100,000
OIRC (Osaka) 115,000
Cosmo (Yokkaichi) 175,000
Showa Yokkaichi (Yokkaichi) 210,000
Tonen-General (Wakayama) 170,000
Cosmo (Sakaide) 140,000
Taiyo (Shikoku) 120,000
JX Energy. (Oita) 136,000
Location of Refineries
(27 Refineries, 4,499,224 B/D)
As of March, 2012
Nansei (Nishihara) 100,000
42
CDU Capacity by country -1 (as of Jan.1-2010)
CDU Capacity No. of Refineries CDU Capa./ Refinery
Million B/D Thousand B/D
USA 17.76 130 137
Russia 5.43 40 136
Japan 4.62 30 154
China 6.81 54 126
S. Korea 2.7 6 450
Italy 2.34 17 138
Germany 2.41 15 161
Canada 2.04 18 113
France 1.98 13 152
UK 1.87 11 170
Brazil 1.91 13 147
S. Arabia 2.08 7 304
(by Oil and Gas Journal Jan.01,2010)
43
CDU Capacity by country -2
Thousand B/D Thousand B/D
Iran 1,451 9 161
Kuwait 936 3 312
Libya 378 5 76
Oman 222 2 111
Qatar 338 2 169
UAE 773 5 155
Yemen 140 2 70
Malaysia 575 7 82
Indonesia 1,011 8 126
Thailand 584 4 146
Nigeria 505 4 126
Vietnam 140 1 140
Mexico 1,540 6 355

as of Jan.1 2010
44
5.94 5.94
4.97
4.55
5.22
5.38
4.99 4.97
4.78 4.77 4.79
4.85
4.89 4.86
4.62
66.0
55.1
62.3
77.3
79.4
77.7
81.0
81.4
84.4
87.2
83.0 82.9
78.9
74.5
77.8
49
49
46
44
44
41
41
33
30 30 30
29
28
27 27
0
10
20
30
40
50
60
70
80
90
100
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
1980 1982 1985 1990 1995 1998 2001 2002 2004 2005 2006 2007 2008 2009 2010
CDU Capacity
Operation Rate
No. of Refinery
O
p
e
r
a
t
i
o
n

R
a
t
e

(
%
)

/

N
o
.

o
f

R
e
f
i
n
e
r
y

C
D
U

C
a
p
a
c
i
t
y

(
m
i
l
l
i
o
n

B
/
D
)

FY
CDU Capacity and Operation Rate
CDU capacity was decreased after 2nd oil crisis, then increased again in early 1990s,
because of Gulf crisis ( some export refineries of Kuwait had destroyed).
So, Japan had to increase refinerys operation rate and decrease product import.
Some small refineries were closed due to their less profitability.
45
Cracking Capacity and its Ratio by Country in 2007
*
: End of 2007
CDU Thermal Catalytic Hydro- Total Cracking
Cracking Cracking Cracking Capacity
1,000 B/D 1,000 B/D 1,000 B/D 1,000 B/D Ratio
USA 16,775 2,371 5,753 1,440 9,564 57.0%
Canada 2,017 186 493 261 940 46.6%
Italy 2,321 480 308 272 1,060 45.7%
UK 1,825 174 449 36 659 36.1%
Germany 2,275 345 340 124 809 35.6%
China * 6,100 811 1,942 795 3,548 58.2%
France 1,951 150 292 16 458 23.5%
Iran 1,474 237 30 140 407 27.6%
S. Arabia 1,745 138 104 132 374 21.4%
Japan * 4,895 151 1,035 145 1,330 27.2%
Russia 5,433 468 331 57 856 15.8%
S. Korea * 2,730 19 285 210 514 18.8%
46
New Units for Product Quality Improvement
DGO Deep Desulfurization Unit
Benzene Removal Unit
Recent Environmental Regulations and Petroleum I ndustry Facility I nvestment
Low Sulfur Diesel Fuel : 200 billion yen (500 wt-ppm)
Low Benzene : 140 billion yen
Reduction in Sulfur Content of Gasoline & Diesel Fuel : 300 billion yen
47
Heavy Oil Desulfurization & Cracking in Japan
CDU V/F
VGO-FCC
VGO-HDS FUEL OIL
BLENDER
CDU Resid-HDS
CDU
CDU Resid-HDS Resid-FCC
V/F
Case-2
FUEL OIL
BLENDER
FUEL OIL
BLENDER
FUEL OIL
BLENDER
H-OIL / Coker
AR
VR
VGO
AR
AR
AR
Case-1
Case-3
Case-4
VGO
LS-VGO
1960s
1990s
1970s
1990s
48
6. Marketing and distribution
in Japan
49
Physical Distribution Route and Capacity
Oil Producing
Countries
Crude Oil Tankers
Total Services : 808 in 2009
Oil Stockpiling Bases
Private Company : 35.8 Mil.KL
Governmental : 47.5 Mil.KL
in 2010
Oil Refineries
Refineries : 27 in 2011
CDU Capacity : 4.52Mil.B/D in 2011
Crude Oil Tanks 56.1 Mil.KL
Product Tanks : 46.9 Mil.KL in 2010
Coastal Tankers : 574
Tank Cars : 1,644 in 2011
Retailers (in 2010)
Service Stations 38,777
Oil Consumers
Oil Depots : 190 in 2005
Tanks : 3,410 (Fuel)
Capacity : 10.99 Mil.KL
Lorry Trucks : 6,966
In 2010
Data: Petroleum Association Japan, 2011
50
Retail Price for Major Products
& Crude CIF
1 Retail Price (Yen/L) 2 3 4 Crude CIF
Gaso(R) Kero DO(Auto) FO(H/S) $/Bbl Yen/$ 1000Yen/KL
1985CY 141 75 100 52 28.07 240 42.4
1990 122 45 72 26 22.29 142 19.8
1991 123 50 75 31 20.37 134 17.2
1992 120 49 73 24 19.36 127 15.4
1993 118 49 72 22 17.65 112 12.5
1994 115 46 76 17 16.45 102 10.6
1995 107 40 71 16 18.05 94 10.7
1996 102 43 74 17 20.41 110 14.1
1997 100 48 78 20 20.75 121 15.7
1998 93 43 76 18 13.93 121 10.6
1999 93 39 76 17 17.08 113 12.1
2000 99 42 78 22 28.53 108 19.3
2001 99 45 78 24 25.28 121 19.2
2002 96 41 76 23 24.63 125 19.4
2003 98 44 78 24 29.22 116 21.4
2004 104 45 82 26 36.37 108 24.7
2005 118 60 97 55.81 113 39.7
2006 134 74 113 63.46 117 46.6
2007 156 76 134 90.70 111 63.0
2008 118 76 112 73.67 98 45.4
2009 127 69 118 79.47 88 44.1
51
Petroleum Tax
2,040 /kl
LPG Tax
9,800 /kl
Gasoline Tax
53,800 /kl
Aviation Fuel Tax
26,000 /kl
Gas Oil Tax
32,100 /kl
480 bil. (11.0%)
24 bil. (0.6%)
2,852 bil. (66.5%)
91 bil. (2.2%)
843 bil. (19.7%)
Fuel Stable Supply Measure
228 bil. (5.7%)
Energy Supply & Demand
Structure Improvement
260 bil. (4.9%)
Road/highway Construction
and Maintenance
2,332 bil. (87.1%)
Airport Projects
113 bil. (2.2%)
Total 2,933 bil.
(68%)
Total 246 bil.
(100%)
Tariff / Tax Rate
Revenues
Distribution
Oil Industry
Measure
Revenue and Disbursement of Petroleum-Related Tax ( FY2010 Budget )
Total 4,290 billion
(100%)

Petroleum
Refining
Distribution
Measure
22 bil. (13.2%)

Oil Stockpiling
Measure
214 bil. (58.2%)

Oil & Gas Exploration
and Development
10 bil. (28.5%)

52
Oil Companys Logos
NIPPON OIL
MITSUBISHI OIL
NIPPON OIL
SHOWA SHELL
SEKIYU
MOBIL SEKIYU
ESSO SEKIYU
KYGNUS OIL
GENERAL SEKIYU
Merge ExxonMobil (07/00)
BUSINESS TIE-UP (03/00)
TIE-UP in Distribution (12/02)
Merge (04/99)
KYUSHU OIL
Merge (10/08)
NIPPON OIL
NIPPON OIL
TIE-UP in
Distribution (10/99)
COSMO OIL
JAPAN ENERGY
TAIYO OIL
IDEMITSU KOSAN JX Nippon Oil &
Energy Corporation
53
JX Energy
Idemitsu Kosan 15.4 13.6 14.0
Cosmo 10.8 13.5 14.0
Showa Shell 15.5 11.5 12.0
Mobil Sekiyu
Esso Sekiyu
Tonen General Sekiyu
Cygnus Oil 2.9 2.0
Taiyo Sekiyu 2.7 2.9 3.0
Mitsui Oil 2.1 3.0
Total 100 88 100
(*) : includes share of Kyusyu Oil (merged with Nippon Oil in Oct. 2008)
Gasoline MKT. Share (%) Total Fuel MKT. Share (%) Topping Capacity (%)
33.9 31.1 38.0
19.0 17.8 10.6
Marketing & Refining Share by Oil Company in FY2010
54
Oil Company
( Primary Distributor )
Dealer
( Whole Sales )
Dealer
( Whole Sales )
Dealer
( Whole Sales )
Users
Users
Retailer-1
Retailer Retailer
Users Users Users
Retailer
Retailer
Users Users
Users
Users
Users
Retailer-2
Retail Sales Channel
55
Cost Reduction Measures under the Great Competition
Merge, Business Cooperation of Companies
Employees Reduction
Integration and Abolishment of Organizations
Abolishment of Small Refineries
Operation Stop of Inefficient Process
Business Diversification such as IPP
Joint Use of Transporting Facilities among
Different Companies (Oil Depots..)
Size-up of Lorry Trucks
Organization
Improvement
Refining Facility
Rationalization
Physical Distribution
Rationalization
56
7. Summary
57
1) Self Exploitation of Overseas Petroleum
2) Oil Stockpiling Facilities
3) International Cooperation
Summary
Activity of Japans Oil Industry
1) Manufacturing of High Quality Product Oil
2) Environment Protection at Oil Refineries
3) Energy Saving at Oil Refineries
Increasing of Middle Distillate Production Ratio
1) Heavy Oil Upgrading
2) Participation to Independent Power Producer
To ensure
Energy Security
To cope with
Demand Structure
Change
1) Deregulation of Oil Related Laws
2) Strengthening of Corporate Characteristics
(Merge, Restructuring, Diversification)
To cope with
Severe Global
Competition
To protect
Global Environment
58
Japan Corporation Center Petroleum
(JCCP)

The End of the Slides

Thank you for your attention
59
0
0.1
0.2
0.3
0.4
0.5
0.6
1985 1990 1995 2000 2005 2010
Year
S
u
l
f
u
r

C
o
n
t
e
n
t
s


m
a
s
s
%
2007
10ppm
( 2005 )
2003
50ppm
(2005)
500ppm
50ppm
( 2003 )
Government regulation
Actual :
10ppm
(2007)
Trend of Japanese Diesel Sulfur Specifications
Government regulates the Sulfur Specification of Diesel Gas less than 10ppm from
2007, but J apanese oil company had already reached less than 10ppm in 2005.
A-1
60
0
20
40
60
80
100
120
2001 2003 2005 2007 2009
Year
S
u
l
f
u
r

C
o
n
t
e
n
t
s


p
p
m
Actual :10ppm
( 2005 )
50ppm
(2005)
100ppm
10ppm
(2008)
Trend of Japanese Gasoline Sulfur Specifications
Government regulates the Sulfur Specification of Gasoline less than 10ppm from
2008, but J apanese oil company had already reached less than 10ppm in 2005.
Government regulation
A-2
61
Independent Power Producer by Japanese Oil Companies
Electric Power Capacity Generation
Company 1000kW Style
Muroran Hokkaido 50 BTG Residue 2004
Yokohama Tokyo 49 GTG LCO 2000
Negishi Tokyo 342 IGCC Residue 2003
Marifu Kansai 132 BTG Petro-Cokes 2004
Hokkaido Hokkaido 15 BTG Residue 2004
Aichi Chubu 226 BTG Residue 2004
Toa Oil Kawasaki Tokyo 238 GTCC Refinery Gas 2003
Cosmo Oil Yokkaichi Chubu 200 BTG Residue 2003
Kyushu Oil Kyushu Kyushu 137 BTG Residue 2003
Idemitsu Kosan
Nippon Oil
BTG: Boiler Turbine Generation
Oil Company Refinery Fuel Completion
GTG: Gas Turbine Generation
IGCC: Integrated Gasification Combined Cycle
GTCC: Gas Turbine Combined Cycle
Remarks:
I PP business has two major merits for oil companies.
1. I t can diversify their business, and it is useful to stabilize their whole business.
(The enhancement of business infrastructure)
2. I t can reduce heavy oil components, such as no valuable atmos. or vacuum residues .
This is useful to improve product oil composition of refinery.
A-3
62
Integrated Gasification Combined Cycle
A-4
Heavy Oil
( Asphalt )
Gasification
Partial Oxidation
Air Separator
O
2
Raw
Synthetic
Gas
N
2
Gasification
Purification
Clean
Syn Gas
()
()
63
0
5
10
15
20
25
30
35
40
45
0 1 2 3 4 5 6 7 8 9 10 11
Economic Energy Efficiency (GDP/Energy)
G
D
P
/
C
a
p
i
t
a
1,000US$/tonFOE
1,000US$
Japan UK
Italy
HongKong
Germany
France
USA
Australia
Canada
Newzealand
Singapore
Taiwan
Korea
Brunei
Peru
World
Mexico
Chile
Brazil
Malaysia
Russia
China Thailand
Philippines
Indonesia
VietNam
India
Highly Efficiency
H
i
g
h
l
y

P
r
o
d
u
c
t
i
v
i
t
y

GDP/Capita vs. GDP/Energy2005 CY)
A-5
64
10,000
20,000
30,000
40,000
50,000
60,000
70,000
77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
No. of Dealer
No. of S.S
Peak
Peak
No. of Dealer
No. of Service Station
No of Dealer and Service Station
A-6
65
Specification of White Oil Products (1)
Applied equally for imported products@2012
Item Specification Background
Gasoline
Lead No Detect Environment (NO
X
etc.)
Sulfur
0.001wt% (10wtppm) 50ppm(05)10ppm(08)
MTBE
7 vol%
No addition since 2000
Benzene
1 vol%
Environment (Human body)
Kerosene
4 vol%
Safety
Methanol No Detect Ditto
Gum
5mg/100ml
Ditto
Color Orange Ditto
Kerosene
Sulfur
0.008wt% (80 wtppm)
Environment (SO
X
etc.)
Flash Point
40
Safety
Color
Saybolt + 25
Ditto
Diesel Gas
Oil
Sulfur
0.001 wt% 50ppm(05)10ppm(07)
Cetane Index
45
Environment(NOx.etc.)
90% Dist.
360
Environment (Solid)

From Dec.1991, MTBE was used as Octane improver, max 7% for
Premium Gasoline. But Japanese oil companies have stopped MTBE
plants operation to prevent water pollution since 2000.
66
Specification of White Oil Products (2)
Applied equally for imported products
Item Specification Background
Octane No.
89 RG , 96 PG
Environment
10% Dist.
70
Environment
50% Dist.
75 110
Environment
Vapor Press.
65 KPa Summer@05
Environment / Safety
Vapor Press.
93 KPa Winter
Environment / Safety
O
2
Content
1.3 wt%
Environment / Safety
Ethanol Content
3.0 vol%
Environment / Safety
Gasoline



Kerosene

10% CCR
0.1 wt%
Environment
Viscosity
1.7 mm
2
/S
Safety
Diesel Gas
Oil
Density.
0.86 g/cm
3

Environment

67
Japanese Industrial Standard for Fuel Oil (JIS K 2205)





Kinds Reaction
Flash
Point

Kinematic
Viscosity @50
mm
2
/S (cSt)
Pour
Point

No.1

Class1
No.2
Neutral 60 min. 20 max. 5 max.
Class2 Neutral 60 min. 50 max. 10 max.
No.1 250 max. -
No.2 400 max. -

Class3
No.3
Neutral 70 min.
400-1000 -






Kinds
Residual
Carbon
Content
mass %
Water
Content
vol.%
Ash
Content
mass %
Sulfur
Content
mass %
No.1 0.5 max.

Class1
No.2
4 max. 0.3 max. 0.05 max.
2.0 max.
Class2 8 max. 0.4 max. 0.05max. 3.0 max.
No.1

- 0.5 max. 3.5 max.
No.2 - 0.6 max.
0.1 max.
-

Class3
No.3 - 2.0 max. - -

FOA
FOB
FOC
Stopped
2002