INPEX Corporation is building a stronger gas supply chain. It consists of Production, Liquefaction, Exports/Imports, Regasification and Distribution via Pipeline network. INPEX is leading Ichthys Project in Darwin, Australia. Production will start from 3Q in 2017. A shuttle LNG Carrier will be commenced to supply Ichthys LNG to Naoetsu LNG Terminal. Naoetsu LNG Terminal connects to both Minami-Nagaoka Gas Field and a pipeline network which covers the Kanto-Koshinetu region. From 2017, INPEX will blend Ichthys LNG with domestic gas to the pipeline network. At that point, INPEXs Gas Supply Chain will be completed. INPEX pipeline network connects to both Tokyo gas and Shizuoka gas pipeline networks. Their LNG receiving areas located along Pacific Ocean side. Their area is anticipating a tremendous earthquake within the next 30 years. For the purpose of maintaining the gas supply in such cases, INPEX, Tokyo gas and Shizuoka gas companies have concluded a gas supply sharing contract. Naoetsu LNG terminal was constructed to meet redundancy considerations. The terminal has two separate process lines and a backup system. Terminal operators must undergo emergency response drills monthly by using OTS (Operator Training Simulator). OTS was also useful for being familiar with LNG handling before the terminal commissioning. Those matters contribute to maintain normal operations. Naoetu LNG terminal aims to carry out Non-Stop Operations. INPEX pledges that Naoetu LNG Terminal will contribute to strengthening of the Japanese energy security.

The period of low oil price is a hard days for the E&P industry. With a reducing income, companies need to maintain their production and struggle for additional reserve to sustain their business. Although their approach varies by company, basic way of reaction is mostly the same; Sustainable production with optimized operation cost, selected and concentrated exploration target, minimized development and postponement of some projects, restructuring of company and employment. Besides these measures, one of the most important thing is the continuous recruitment of young talent to succeed the technical and non-technical know-how of the company and the industry.

The shale revolution can be said a revolution of the quantity of oil and natural gas among the fossil fuels which the human can use. A sudden rise of the self-sufficiency ratio of natural gas and a rapid decrease in oil import advanced simultaneously in the United States. The rapid increase of shale oil production in the US resulted in a drop of its oil dependence to Middle East and Africa, and then both the world energy map and the money flow changed dramatically. The shale revolution should be the cause for the falling tendency of the crude oil price from the mid-2014. I want to tell the fortune of the shale revolution by analyzing the facts so far.

Low Salinity Water Flooding (LSWF) is one of the attractive EOR technologies due to a low cost and environment friendly method. Because the operational configuration in LSWF is similar to that in conventional water flooding and no chemical components that are not present in reservoirs are added to injection water. LSWF has been focused on since 1990's and researchers have proposed some potential mechanisms of how low salinity water works for improving oil recovery. However, the mechanisms have not been sufficiently elucidated.

Recently JOGMEC started a joint study to understand effects of LSWF on oil recovery through laboratory experiment, simulation work and field applications with Waseda University, Kyoto University and PetroVietnam / Vietnam Petroleum Institute. In the laboratory experiment, the effects of LSWF on oil recovery were observed using Berea sandstone cores containing about 1.5% of kaolinite that is considered to be one of the key factors. The mechanism to improve oil recovery suggested the multi component ion exchange. In the simulation work, we are developing in-house simulator to predict not only oil recovery but also ion and pH changes that are typically observed during LSWF based on the mechanism of multi component ion exchange. In addition, we are exploring an opportunity to apply LSWF to oil fields through a comprehensive study involving laboratory, simulation, field pilot and economic evaluation.

Oil & Gas industry should strive to create an organization with a corporate culture where securing safety and protecting environment have the highest priority. Many international oil and gas companies are proactively involved in HSE (Heath, Safety and Environment) activities with their established HSEMS (HSE Management Systems). However, recently, we ourselves ask us how the implementation of HSE should be under the current low oil price. This is because the industry needs to cut cost and it is easy to ask a question that the cost reduction may cause the increase of the incident.

This is to introduce the importance and effectiveness of HSEMS which could lead the reduction of incident and can achieve further reduction under the circumstance by making the effort to maintain and improve it.

With oil prices falling to less than half of the previous $100 per barrel, the basic principle we mustadhere to is to increase cash flow and bolster the cash we have at our disposal. To this end, we must cut costs, restrain spending, and increase production at an appropriate level. It is also important to minimize risk money. Put simply, it is to restrain investment and concentrate on assets which generate sound returns.

On the other hand, continued investment is necessary for sustained growth. If we were to discontinue investment because of the uncertain outlook for oil prices, our future would not be guaranteed. What is required is to strike a balance between increased profits and investment.

In addition, a positive side effect of suppressed oil prices is a decrease in development costs such as EPCI contract prices and drilling rig dayrates.

As mentioned in the book “Private Empire”, the strategic goal of E&P companies is the replacement of reserves against the backdrop of resource nationalism. This is indeed our fundamental, long term, and most important goal.

It is impossible to foresee how our environment will change; it is not possible to predict the future. Therefore, it is important not to neglect the preparation of elements that are within one's control. The fundamental countermeasure for dealing with uncertainty is to do the ordinary in an ordinary manner.

Japex has been undertaking operational reforms to strengthen its competitiveness over the last several years, and they form the basis of our consideration of measures to deal with this low oil price environment. The first half of this presentation will be on the status of E&P companies worldwide, and the second half will deal with the situation at Japex.

Today, many of oil and gas companies are putting tight reins on capital spending. High international oil price for the past few years allow E&P Sector to invest in the project which requires innovative technical solutions such as deep water, unconventional and integrated LNG project throughout the world. At the same time, these are well known as high capital intensive project with high level of uncertainty and risk. But oil price has been declining from middle of 2014. The plunge was sharpest since 2008 Lehman Shock and it hasn't shown signs to rise back. The high volatility of the oil price exerts significant impact on the E&P Sector. It affects not only Total global oil and gas supply/demand growth but also numerous distinct Investment activities. Resulting stock price decline, experience of substantial pressure related to credit facilities, downward pressure of credit rating from agency, slow down of merger and acquisition (M&A) etc. This paper addresses multiple challenges that E&P companies and industry are facing by the declining of oil price. Furthermore, describes business model in one of largest “Sogo Shosha” in Japan to survive low commodity price environment.

Three linear zones of oil fields are distributed in the Nisiyama Oil Belt, Niigata Prefecture: (1) the Gomoto, Amaze and Ishiji fields in the western part of the belt, (2) the Miyakawa field in the central part, (3) the Betsuyama, Nagamine and Takamachi fields (the Nishiyama field as a general term) in the eastern part.

Results of head space gas (HSG) analyses in the Nozumi exploratory well (Nozumi SK-1D), Teradomari area, indicate the presence of two horizons of oil showings that were not detected at the wellsite, and this indicates that two compartments exist in the lower part of the Teradomari Formation, and two in the upper part of the Nanatani Formation. The gas maturity of two oil showings is estimated to be about 0.8% and 0.9% Ro equivalent as estimated from a δ¹³C₂-δ¹³C₃ plot.

Oil and gas at the surface and at shallow depth in the Nishiyama Oil Belt, including Teradomari area, are partly biodegraded, as evident in ethane that has C₂<C₃ and δ¹³C₂>δ¹³C₃. The geochemical maturity parameters of oils from oil fields in the belt indicate that the maturity of the Nagamine and Takamachi oils is about 0.7%, while that of the Amaze oils is slightly higher (0.8% and more), similar to the gas maturity in the Nozumi well.

Although vitrinite reflectance (Ro) of the lower part of the Teradomari Formation in the well, which is affected by a local heat source, is locally>1%, the lateral migration of oil and gas is dominant due to the presence of vertical compartments in the well. A comprehensive interpretation of the vertical distribution of oil and the cumulative production volumes in oil fields, combined with the geological history of the Nishiyama Oil Belt, shows that oil and gas in the belt were generated in and around the deeper part of the Nagamine and Miyakawa oil fields, and migrated vertically along faults before accumulation.

Miocene hydrothermal alteration resulted in the formation of the oil and gas reservoir pore systems of the Nishikurosawa and the Onnagawa basaltic rocks in the Yurihara (YR) and the Ayukawa (AY) oil and gas fields, Akita Prefecture, Japan. This study aims to understand the porosity systematics of the altered basaltic rock oil and gas reservoirs.

Alteration zones of the subaqueous basaltic rocks have been identified as the mixed-layer clay minerals-laumontite-thomsonite zone (MLT zons), the mixed-layer clay minerals-prehnite zone (MP zone), and the alkali feldspar zone (K zone) in the YR field, and only the saponite zone (SP zone) in dolerite in the AY field. Porosity types comprise primary pore spaces (vesicles) and secondary pore spaces (fractures, leached pores, and interstitial pores). Leached pore spaces mainly resulted from saponite dissolution. The effective pore spaces were identified with blue-resin infiltration and characterized as pore space structures interconnected by fractures, the large leached pores and/or vesicles. Prehnite, laumontite, mixed-layer clay minerals, and other minerals filled some fractures and subsequent fracturing and recrystallization occurred. This resulted in the dominant characteristic observed in the effective porosity of the MP zone. In the SP zone, almost all large leached pore spaces remained unmineralized.

Sulfur isotope data from disseminated and vein-type pyrite and barite from mudstone and basaltic rocks indicate mixing of reduced sulfur from mudstone, seawater, and magmatic sulfur.

The pore characteristics, alteration mineral assemblage, bulk chemical composition of major elements and REE, and δ ³⁴S data suggest that the formation of porosity systematics during the dome-up tectonics and the circulation of hydrothermal water under the high geothermal gradient in the YR field and the remnant leached pores in the AY field mainly contributed to the formation of the hydrocarbon reservoirs.

Game theory, the study of multiperson problems, is applied to petroleum business. First, basic concepts of game theory are introduced, taking the petroleum production determination as an example, where the behavior of petroleum producing countries can be reasonably explained. Then, many aspects of petroleum exploration and development are analyzed with various techniques of game theory: Bidding for mining rights and contractors, party power in joint ventures, utilization of exclusive operation mechanism, and exploration planning strategies are evaluated with auction theory, SS and Bz indices, and decision trees. These analyses will lead to successful strategic decisions.