[Translation for Reference and Convenience Purposes Only]

CORPORATE GOVERNANCE REPORT

INPEX CORPORTION

Last Update: November 24, 2021

INPEX CORPORATION Takayuki Ueda Representative Director, President & CEO

Contact: Corporate Communications Unit, Investor Relations Group +81-3-5572-0234 Securities Code: 1605 https://www.inpex.co.jp/english/

The corporate governance of INPEX CORPORATION (hereinafter "INPEX" or the "Company") is described below.

I

Basic Views on Corporate Governance, and Basic Information on Capital Structure,

Corporate Attributes, and Other Matters

1. Basic Views Updated

The mission of the Company is to contribute to the creation of a brighter future for society through our efforts to develop, produce and deliver energy in a sustainable way. Based on this mission, in order to achieve sustainable growth and increase corporate value over the medium- to long-term, the Company fulfills its social responsibilities in cooperation with its shareholders and other stakeholders, and works to enhance its corporate governance for the purpose of conducting transparent, fair, timely, and decisive decision-making.

The Company formulated the "Corporate Governance Guidelines" (hereinafter the "Guidelines") regarding the basic views and principles on corporate governance of the INPEX Group, as disclosed on the Company's website.

https://www.inpex.co.jp/english/csr/governance/corporate_governance.html

Reasons for Non-compliance with the Principles of the Corporate Governance Code Updated

The Company complies with all the principles of the Corporate Governance Code revised in June 2021, including principles for the Prime Market.

Disclosure Based on the Principles of the Corporate Governance Code Updated

[Principle 1-4:Cross-Shareholdings]

See Article 7 ("Policy Concerning Cross-Shareholdings") of the Guidelines of the Company. Fiscal year 2020's situation is as follows.

The Company assessed whether or not to hold each individual cross-shareholding by comprehensively examining the purpose of the cross-shareholding, dividend income, current transactions with the company, medium-to long- term opportunities for expanding transactions, business synergies and risks, etc., while considering the Company's cost of capital. The Company confirmed that it will consider selling shares for which the Company assessed the necessity to hold has decreased.

[Principle 1-7: Related Party Transactions]

See Article 9 ("Related Party Transactions and Submission of Pledges"), Paragraphs 1 and 2 of the Guidelines of the Company.

[Principle 2-4-1: Ensuring Diversity in the Promotion to Core Human Resources] See "3. Measures to Ensure Due Respect for Stakeholders" of this report.

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[Principle 2-6: Roles of Corporate Pension Funds as Asset Owners]

The Company entrusts the management and administration of its trust-type defined benefit corporate pension plans to financial institutions which have accepted the Stewardship Code.

For the purpose of maintaining appropriate management of the Company's pension funds, the Company established the Pension Committee which consists of board members in charge of Human Resources and Finance & Accounting and representatives from the labor union. Matters of financial administration, including formulation and revision of investment basic policy, investment management and political asset mix shall be discussed in the Pension Committee and minutes of the Pension Committee's meetings are disclosed to the beneficiaries.

An internal department monitors and manages conflicts of interest for fund investment. Members of the Pension Committee also are encouraged to participate in various training courses for strengthening their professional expertise.

[Principle 3-1: Full Disclosure]

  1. Company objectives (e.g., business principles), management strategies and management plans

    • See Article 2 ("Mission and Basic Views") and Article 15 ("Business Strategy and Business Plan") of the Guidelines. See the "Vision 2040: Delivering Tomorrow's Energy Solutions", "Medium-term Business Plan 2018-2022: Growth
    • Value Creation" and "Business Development Strategy ~Towards a Net Zero Carbon Society by 2050~" of the INPEX Group as disclosed on the Company's website.https://www.inpex.co.jp/english/company/vision.htmlhttps://www.inpex.co.jp/english/company/midterm.htmlhttps://www.inpex.co.jp/english/company/pdf/business_development_strategy.pdf
  2. Basic views and principles on corporate governance

  3. See the "1. Basic Views" of the "Basic Views on Corporate Governance, and Basic Information on Capital Structure,
    Corporate Attributes, and Other Matters" of this report.
  4. Board policies and procedures in determining the compensation of the senior management and Directors

See Article 27 ("Compensation for Directors, etc.") of the Guidelines.

  1. Board policies and procedures in the appointment and dismissal of the senior management and the nomination of candidates for Directors and Audit & Supervisory Board Members
    See Article 25 ("Directors, etc.") and Article 28 ("Audit & Supervisory Board Members") of the Guidelines.
  2. Explanations with respect to the individual appointments, dismissals and nominations based on the above (iv)
    For the reasons for nominating the candidates for Directors, see p.9-.p.23 of Notice of the 15th Ordinary General Meeting of Shareholders. and for the reasons for nominating the candidates for Audit & Supervisory Board Members, see p.27-p.32 of Notice of the 13th Ordinary General Meeting of Shareholders.
    (https://www.inpex.co.jp/english/ir/shareholder/meeting.html)

For the reasons for nominating Outside Directors/ Audit & Supervisory Board Members, see "Directors" and "Audit

  • Supervisory Board Members" of "1. Organizational Composition and Operation" of "II Business Management
    Organization and Other Corporate Governance Systems Regarding Decision-making, Execution of Business, and
    Supervision of Management" of this report.
[Principle 3-1-3: Sustainability measures ]

See "Implementation of Environmental Activities and CSR Activities, etc.".of this report.

Investment in human capital

Details regarding investment in human capital are outlined in the "Annual Report" and "Sustainability Report,", etc.

Annual Report

https://www.inpex.co.jp/english/ir/library/pdf/annual_report/inpex_annualreport202012_en.pdf

"Human Capital" is listed as a Value Creation Process.

"Diverse human resources experienced in exploration, development, operations, marketing and other areas" is listed as one of INPEX's strengths.

2021 Sustainability Report

https://www.inpex.co.jp/english/csr/pdf/INPEX_SR2021_E_Employees.pdf https://www.inpex.co.jp/english/csr/pdf/INPEX_SR2021_E_ESGdata_IndependentAssurance.pdf

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Importance of human resource development is listed as our policy toward employees.

Amount of investment (unconsolidated) in human resource development is specified in the ESG Performance Data.

The Company provides a combination of group training, practical training overseas and e-learning to ensure employees have the skill and mindset needed to carry out their duties so that employees may contribute to the business for the long term and aim to pursue their own development. Further, to facilitate the development of its future business in support of a net zero carbon society, The Company has internal programs such as internal job posting and secondary work schemes that support autonomous growth. Externally The Company has connections with research development ventures and startups to facilitate engagement with human resources.

Investment in intellectual property

The company has historically engaged in research and development from the perspectives of "the retention and improvement in technical levels of oil and gas exploration and development with a long-term vision" and "creating a system for the sustainable supply of energy." On the other hand, as outlined in "Vision 2040" formulated in May 2018, the company is being positioned as a technical leader in an evolving energy landscape and in 2040 will increase asset/project value with core technologies, generate competitiveness from technical strengths, and pursue next-generation energy solutions. These long-term visions are supported by the Technology Roadmap 2018 which sets forth the technical targets for the next five years. The company will build on the technical strengths throughout the group as supported by Vision 2040 and the Technical Roadmap 2018 and will continue conventional research and development activities and engage in the research needed to realize its vision for the future.

Details regarding company activities are outlined on the corporate website. https://www.inpex.co.jp/english/ir/library/

[Supplementary Principle 4-1-1: Scope and Content of the Matters Delegated to the Management]

See Article 14 ("Roles and Responsibilities of the Board of Directors"), Paragraph 3 of the Guidelines of the Company.

[Principle 4-1-3: Succession Plan]

See Article 32 ("Succession Plan") of the Guidelines of the Company.

[Principle 4-9: Independence Standards and Qualification for Independent Directors]

See Article 29 ("Independence Standards") and Exhibit 2 ("Independence Standards for Outside Directors and Outside Audit & Supervisory Board Members") of the Guidelines of the Company.

[Principle 4-10-1: The Mandates and Rolls as well as the Policy regarding the Independence of the Composition of each Committee]

See Article 13 ("Organizational Structure") Paragraph 3, Article 25("Directors, etc") Paragraphs 2 and 3, Article 27("Compensation for Directors, etc.") Paragraph 1 and Article 32("Succession plan ") of the Guidelines of the Company.

[Supplementary Principle 4-11-1: View on the Balance of Knowledge, etc. as well as Diversity and Size of the Board of Directors as a Whole]

See Article 16 ("Composition of the Board of Directors"), Paragraphs 1 and 3 of the Guidelines of the Company. See skills matrix of the Board of Directors as disclosed on the Company's website https://www.inpex.co.jp/english/csr/governance/pdf/skills-matrix.pdf

[Supplementary Principle 4-11-2: Status of Concurrent Posts Held by Directors and Audit & Supervisory Board Members as Officers at Listed Companies]

Concurrent posts as officers at other listed companies held by the Company's Directors and Audit & Supervisory Board Members are disclosed in "Reference Documents for the General Meeting of Shareholders", "Business Report", "Annual Securities Report", etc. https://www.inpex.co.jp/english/ir/shareholder/meeting.htmlhttps://www.inpex.co.jp/ir/library/securities.html

[Supplementary Principle 4-11-3: Analysis and Evaluation of the Effectiveness of the Board of Directors as a Whole] With the aims of regularly verifying that the Board of Directors is functioning appropriately and identifying issues to resolve for continuing improvement, the Company undertakes an evaluation of the effectiveness of the Board of Directors each year, and discloses the summary of the evaluation results. Based on this policy, the sixth evaluation was conducted in fiscal year 2020. The evaluation method and summary of the results are as follows.

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[Evaluation Method]

An interim review of the issues identified in the effectiveness evaluation for the previous fiscal year was undertaken at the meeting with Outside Directors and Audit & Supervisory Board Members held in August 2020. The specific implementation method of fiscal year 2020's effectiveness evaluation was also discussed, including the appointment of a third-party evaluation organization. As a result, it was decided to appoint a major external law firm as a third- party evaluation organization, to confirm the appropriateness of the survey content and composition, the method of consolidation and analysis by the Board of Directors secretariat, and proposals for improvement.

Subsequently, fiscal year 2020'ss implementation policy and evaluation items were deliberated at the meeting of the Board of Directors meeting held in November 2020, including the content and composition of the survey prepared by the Board of Directors secretariat based on review by the third-party evaluation organization. The evaluation items included the self-evaluation of each Director and Audit & Supervisory Board Member, the composition, operations, roles and responsibilities of the Board of Directors, operations of the Nomination and Compensation Advisory Committee, as well as the status of improvement of issues identified in the previous evaluation. An anonymous online survey of all Directors and Audit & Supervisory Board Members was conducted in December. In order to obtain more specific views and opinions from the Directors, the Directors were encouraged to make comments on many of the questions.

Subsequently, results of the survey were consolidated and analyzed by the Board of Directors secretariat. After receiving confirmation and indications regarding the appropriateness of the method of consolidation and analysis and the draft improvement proposals from the third-party evaluation organization, the results of the consolidation and analysis, as well as issues and initiatives for the future were discussed at a meeting among the Outside Directors, Audit & Supervisory Board Members and the Representative Director, in January 2021. Based on such discussion, the following evaluation results were confirmed at the Board of Directors meeting held in February 2021.

[Summary of Evaluation Results]

  1. The overall effectiveness of the Board of Directors was confirmed to be sufficient, as in the previous fiscal year.
  2. In particular, continued initiatives to secure time for substantial deliberation were positively evaluated, such as more complete briefings for part-time Officers prior to Board of Directors meetings, and the prior indication of timeframes for deliberation. In addition, the implementation of discussion on agenda items specifically focused on themes that require discussion from a medium- to long perspective, the implementation of a lecture and opinion exchange meeting for the Board of Directors from an external expert on climate change, and the holding of online meetings in response to the COVID-19 pandemic, all received positive evaluations, and their continuation was requested.
  3. The following challenges were established, as issues requiring continued, short- or medium-term initiatives, in order to secure even further effectiveness for the Board of Directors.
    Enhance discussions regarding strategies further, based on changes in the business environment
    Further revitalize discussion at Board of Directors meetings
    Deeper discussions regarding the desired state of the Board of Directors
    Secure opportunities for discussion on the desired state of governance in the Group
    The third-party evaluation organization has concluded that the Board of Directors secretariat has appropriately consolidated and analyzed the results of the evaluation, and that the challenges presented above, drawn from these results and analysis, have been suitably established.

Based on these evaluation results, the Company will continue striving to improve the effectiveness of the Board of Directors.

[Supplementary Principle 4-14-2: Training Policy for Directors and Audit & Supervisory Board Members] See Article 33 ("Training Policy") of the Guidelines of the Company.

[Principle 5-1: Policy for Constructive Dialogue with Shareholders]

See Article 34 ("Constructive Dialogue with Shareholders") and Exhibit 3 ("Policy concerning the Development of a System and Initiatives for Promoting Constructive Dialogue with Shareholders") of the Guidelines of the Company.

2. Capital Structure

Foreign Shareholding Ratio

From 20% to less than 30%

4

[Status of Major Shareholders] Updated

Name / Company Name

Number of Shares Owned

Percentage (%)

(Shares)

Minister of Economy, Trade and Industry

276,922,800

18.96

Japan Petroleum Exploration Co., Ltd.

106,893,200

7.32

The Master Trust Bank of Japan, Ltd. (Trust Account)

101,798,400

6.97

Custody Bank of Japan, Ltd. (Trust Account)

60,503,000

4.14

ENEOS Holdings, Inc.

43,810,800

3.00

JAPAN SECURITIES FINANCE CO., LTD.

28,777,100

1.97

SSBTC CLIENT OMNIBUS ACCOUNT

27,969,982

1.92

Custody Bank of Japan, Ltd. (Trust Account 7)

22,446,400

1.54

SMBC Nikko Securities Inc.

21,957,900

1.50

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

20,526,007

1.41

Controlling Shareholders (excluding Parent

-

Company)

Parent Company

None

Supplementary Explanation Updated

  1. The status of major shareholders above is based on the shareholders' register as of June 30, 2021.
  2. In a Report on Major Shareholders(Change Report) provided for public viewing on August 5, 2021, indicated that Sumitomo Mitsui Trust Asset Management Co., LTD, and its joint shareholder Nikko Asset Management Co., Ltd. owned the following shares as of July 30, 2021. The content of the Report on Major Shareholders(Change Report) is as follows.
    Name or Company Name/ (Sumitomo Mitsui Trust Asset Management Co., Ltd.) Address/ (1-1-1 Shibakoen, Minato-ku, Tokyo ) Number of Shares Owned (50,988,200)/Percentage of Number of Shares Owned by Total Number of Issued Shares (3.49)
    Name or Company Name/ (Nikko Asset Management Co., Ltd.) Address/ (9-7-1 Akasaka Minato-ku, Tokyo,) Number of Shares Owned (27,591,900)/Percentage of Number of Shares Owned by Total Number of Issued Shares (1.89)
  3. In a Report on Major Shareholders(Change Report) provided for public viewing on November 12, 2021, indicated that Japan Petroleum Exploration Co., Ltd. owned the following shares as of November 8, 2021. The content of the Report on Major Shareholders(Change Report) is as follows.
    Name or Company Name/ (Japan Petroleum Exploration Co., Ltd.) Address/ (1-7-12, Marunouchi, Chiyoda-ku, Tokyo) Number of Shares Owned (53,446,600)/Percentage of Number of Shares Owned by Total Number of Issued Shares (3.65)

3.Corporate Attributes

Listed Stock Exchange and Market Section

Tokyo Stock Exchange, First Section

Fiscal Year-End

December

Type of Business

Mining

Number of Employees (consolidated) as of

1,000 or more

the End of the Previous Fiscal Year

Net Sales (consolidated) as of the End of the

¥100.0 billion to less than ¥1 trillion

Previous Fiscal Year

Number of Consolidated Subsidiaries as of

50 to less than 100

the End of the Previous Fiscal Year

5

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Inpex Corporation published this content on 24 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2021 06:29:11 UTC.