05-06-2013

Final invest decision on Nghi Son refinery/petrochemical complex

Idemitsu Kosan Co.,Ltd, hereby announces that it has reached a final invest decision on petroleum refinery and related projects by Nghi Son Refinery and Petrochemical Limited Liability Company (NSRP) with co-investors Mitsui Chemicals, Inc, Kuwait Petroleum International, and PetroVietnam. In parallel, NSRP signed project financing agreements in the aggregate amounts of up to US$5 billion with public financial institutions and commercial banks.

Following the signing of a construction agreement with a construction consortium in January 2013, Nghi Son Refinery Petrochemical Limited engaged in efforts to organize project financing with public financial institutions and commercial banks. As a result, the company reached to sign project financing agreements in the aggregate amounts of up to US$5 billion composed of direct loans of US$2.3 billion from The Japan Bank for International Cooperation (JBIC) and The Export-Import Bank of Korea (KEXIM) and total loans of US$2.7 billion from commercial banks. Loans from commercial banks are insured/ guaranteed by Nippon Export and Investment Insurance (NEXI) or other overseas export credit agencies (ECA). In particular, JBIC will provide Overseas Investment Loan of up to US$1.65 billion and NEXI will provide Overseas Untied Loan Insurance for up to US$1.3 billion loan provided by commercial banks. KEXIM will also provide US$1.1 billion (US$0.66 billion in loan, US$0.44 billion in guarantee).

In addition, Idemitsu will provide a completion guarantee of 35.1% of Nghi Son Refinery Petrochemical Limited’s liabilities to Lenders until the completion of project construction, corresponding to its interest percentage in shares.

The expected total investment for this project is US$9 billion. As US$5 billion will be raised through project financing, the remaining US$4 billion will be directly borne by sponsors. Of this amount, Idemitsu will provide investments/loans of approximately US$1.4 billion, corresponding to its interest percentage in shares.

Following this final invest decision and the cofinancing agreement, construction for this project is expected to commence in July 2013. Construction is expected to be completed in 2016 and commercial operations are expected to commence in 2017.