Energy Division Strategies and Initiatives
Industry Environment and Fiscal 2008 Results
The price of crude oil, after rising steadily from the start of 2008 to peak at a historic high of over US$140 a barrel, by year’s end had plummeted to around US$30 a barrel. Not only higher prices for gasoline and kerosene led by skyrocketing crude oil price, but also the economic slowdown, culminated in a decline in Japan’s energy consumption. This trend was especially evident in domestic demand for petroleum products. Moreover, this situation showed no signs of recovering as consumer demand receded in pace with falling prices from autumn onwards, as the shift to electric power and natural gas gained momentum.
In contrast, a renaissance in nuclear energy is taking place as international frameworks emerge in an effort to restrict greenhouse gas emissions, and the procurement race to sources of uranium, is now heated as countries turn renewed attention to nuclear power generation as an effective means to counter global warming.
In this climate, we moved forward in oil and gas E&P with production and development work at existing mining blocks, and strove to win promising new projects. In LNG, we concentrated on maintaining operational consistency in existing projects in Qatar and Equatorial Guinea, and continued working hard ahead of the start of operations at the Peru LNG Project. In petroleum product trading, we relied on various risk management tools to cope with extreme price volatility in the oil market, leveraging networks in Japan and globally in a drive to supply competitive petroleum products. In the petroleum product marketing area, we offered unique and highvalue- added services. In nuclear fuel, we eyed new opportunities to invest in uranium mines beyond our existing projects, and sought to expand our efforts in each phase of the nuclear fuel cycle.
Initiatives in Fiscal 2009
In oil and gas E&P, one of our strategic business fields, the division is promoting production and development work at existing mining blocks while continuing to search for promising new projects. In LNG, we continuously try to take part in new projects and take steps to build our value chain.
In petroleum trading, to ensure that we thrive amid hardening competition, we are expanding our global activities, with the goal of strengthening our existing business base and expanding new initiatives. In the petroleum product marketing area, we aim to put ourselves at an advantageous position among the industry by reinforcing relationships with suppliers to enhance our procurement capabilities, and by pursuing more efficient operations. In nuclear fuel, our focus remains on expanding measures targeting each phase of the nuclear fuel cycle, which include seeking out new opportunities for uranium mine investment.
The division will optimally coordinate operations in its five strategic business fields while aggressively pioneering new commercial goods and innovative trading flows.
