01-08-2013

Cosmo Oil Company implementation of restructuring of refinery supply

Cosmo Oil Co., Ltd. has been working on the 5th Consolidated Medium-Term Management Plan (MTMP) with the theme: "5 years to establish a solid business foothold for Cosmo Oil Group's further expansion." Today, it announces that "Restructuring of Refinery Supply" shown in the MTMP has been completed in July as planned and it begins its new start with three (3) refineries. It is determined to make further efforts for safe operation and stable supply to ensure the achievement of the targets shown in the MTMP.

1.Start of Refinery Supply with Three (3) Refineries after the Closure of Sakaide Refinery
As one of the reviewed refinery supply measures presented in the 5th MTMP, Sakaide Refinery ceased the operation of all refining facilities and a notice of abolishment of the facilities was submitted to the Ministry of Economy, Trade and Industry today. With transfer to three (3) refineries structure, Cosmo Oil is expecting not only to reduce fixed costs but to keep a high operating rate, leading to enhancement of refinery competitiveness. Meanwhile, Sakaide Refinery continues its business as an oil terminal from now on to accomplish stable supply of petroleum products to western Japan.

2.Resumption of two CDUs Operation at Chiba Refinery
The 2nd CDU of Chiba Refinery resumed its operation on July 24 as planned, after the turnaround. Together with the 1st CDU which has already been in operation, this production structure with two CDUs has enabled the same crude distillation as before the Great Eastern Japan Earthquake. This structure will eliminate alternative supply cost and increase in income is also expected with reopening of export.

3.Optimization of Refinery Supply by Reviewing Crude Distillation Capacity of Chiba and Yokkaichi Refineries.
Based on transfer to three (3) refineries structure and resumed operation with two CDUs of Chiba Refinery, Cosmo Oil has reviewed its crude distillation capacity of Chiba Refinery, its major refinery, and established refinery supply for stable supply of petroleum products and improvement of refinery competitiveness by optimizing the production structure of overall refineries.