June 18, 2014
Cosmo Oil Co., Ltd.
TonenGeneral Sekiyu K.K.

Cosmo Oil Co., Ltd. (Representative Director and President: Keizo Morikawa) and TonenGeneral Sekiyu K.K. (Representative Director and President: Jun Mutoh) have been examining the joint business of their Chiba refineries (Chiba refinery of Cosmo Oil: Processing capacity of 240,000 BPD, Chiba refinery of Kyokuto Petroleum Industries in the TonenGeneral Group: Processing capacity of 152,000 BPD; hereinafter, the "both refineries") in Chiba district (as already announced).

We hereby announce that the both companies have confirmed the specific matters to be continuously examined in the future and concluded a memorandum as below, based on the examinations up to now toward realization of the joint business.

Background The both companies have agreed on the recognition that they "aim for a top-ranked refinery with global competitiveness" by integrating the both refineries. Accordingly, they continue discussions based on the memorandum toward realization of the joint business and are headed to conclude a basic agreement within this year.
Conclusion date June 18, 2014
Principal points Major specific matters to be examined continuously in the future
  • We aim to establish a joint business company by January 2015. The company shall be a limited liability company, where equal and fair operation is sought.
  • After the joint business company is established, we gradually address the creation of synergy in relation to operations in refineries.
  • We initiate detailed design of pipelines connecting the both refineries and try to complete them in FY2016.
  • We centralize the refining facilities at the time of completion of the pipelines to integrate the refineries.
    * In order to create an integration synergy, we consider optimizing the facilities including reviewing the capacity of crude distillation units.
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