28-08-2012

Restructuring of refinery supply

Please be announced that Cosmo Oil Co., Ltd has decided that we will close Sakaide Refinery to restructure refinery supply as follows:

Summary: To close Sakaide Refinery and continue to operate it as an oil terminal and for other purposes

Reason for the closure of Sakaide Refinery: For the 26-year since we merged in 1986, we have maintained the refinery supply firmly with four (4) refineries (Chiba, Yokkaichi, Sakai, and Sakaide) until now. Meanwhile, the domestic oil demand has been decreasing due to the changes of social structure such as a promotion of energy saving, an emergence of next generation's automobiles, and aging population combined with the declining number of children. It is expected the same trend will continue in the future.

Furthermore, we have found it is imperative to restructure our refinery supply by integrating our refineries in consideration of the improvement of petroleum product supply capacity due to the construction of several new refineries in Middle East and Asia region in addition to the change of domestic circumstance.

Under the circumstance, we have decided to close Sakaide Refinery in order to concentrate our business resources on three (3) refineries, as the result of analyses and discussion on the location, size, and composition of all units at our four (4) refineries respectively from all perspectives. We are determined to establish an efficient refinery supply with three (3) refineries and improve the stable supply and competitiveness.

3. Time of Closure : July, 2013

4. Future Sakaide Refinery Operation: We will keep the employees at Sakaide Refinery hired by personnel relocation or other ways among Cosmo Oil group companies.

Sakaide Refinery will be kept used as an oil terminal which has distribution function to provide petroleum product to west Japan region.

With regard to the present plant area at Sakaide Refinery, we will study all kinds of options which will lead toward the growth of our corporate value from medium and long term perspectives.