• Message From Management
• Company Overview
• Management Vision
• Outline of the Oil Business
• Press Release

At the meeting of the Board of Directors held on September 18, 2007, the Company resolved to offer the shares to be issued by third-party allotment as follows:

1. Purpose of Offer of Shares to be Issued by Third-Party Allotment

   The purpose is to improve the financial standing of the Company and to increase profitability and competitiveness to expand growth strategy (strategic investment) for the next generation.

   The Company has developed a very close and unique relationship with the Emirate of Abu Dhabi through trade in crude oil and petroleum products and E&P operation for a long year. Based on mutual understanding that we strengthen the relationship and expand business opportunities to increase corporate value, the Company entered into an agreement with International Petroleum Investment Company ("IPIC"), wholly owned by the Emirate of Abu Dhabi, and Infinity Alliance Limited, wholly owned by IPIC, with respect to the comprehensive and strategic business alliance as set forth in "Strategic Partnership with International Petroleum Investment Company" on the date hereof. We believe that allotment of the shares to Infinity Alliance Limited is the best way to promote the business alliance and strengthen the relationship.

2. Amount and Use of Newly Raised Capital

   (1)Amount of Newly Raised Capital (Estimated Balance of Proceeds)

   JPY 89,180,000,000

   (2)Specific Use of Newly Raised Capital

   The Company will use the capital newly raised by allocation of new shares to a third party mainly for upgrade of refineries (including petrochemicals), E&P operation and start-up businesses.

   (3)Scheduled Period of Use of Newly Raised Capital

   The Company will, in principle, use the newly raised capital in accordance with the new mid-term business plan (fiscal term 2008 to 2010), provided that further consideration is necessary with respect to use of the newly raised capital and period thereof.

   (4)Company's Analysis concerning Reasonableness of Use of Newly Raised Capital

   We believe that capital adequacy enables us to strengthen our financial standing on which investment is based and expand growth strategy. We believe that it is reasonable to enhance profitability and increase corporate value and stock value as a result thereof.

3. Details of Equity Financing Conducted over the Last Three Years

   (1)Consolidated Business Result over the Last Three Years (in millions of JPY)

   Fiscal Term	Year ended March 31, 2005	Year ended March 31, 2006	Year ended March 31, 2007
   Amount of Proceeds	2,154,558	2,670,628	3,062,743
   Operating Income	65,698	111,247	69,643
   Ordinary Profit	63,175	119,557	74,789
   Net Income	26,414	61,795	26,536
   Net Income per Share (in JPY)	41.73	94.54	39.54
   Dividend per Share (in JPY)	8	10	8
   Net Asset per Share (in JPY)	360.93	465.48	506.15

   (2)Present Number of Outstanding Shares and Latent Shares (as of September 18, 2007)

   Class	Number of Shares	Ratio to Total Number of Outstanding Shares
   Total Number of Outstanding Shares	671,705,087 shares	100%
   Number of Latent Shares based on Conversion Price (Exercise Price) as of the Date hereof	28,846,153 shares	4.30%
   Number of Latent Shares based on Floor Conversion Price (Exercise Price)	- shares	- %
   Number of Latent Shares based on Ceiling Conversion Price (Exercise Price)	- shares	- %

   (3)Recent Share Price

   1. Share Price for the Last Three Years (in JPY)

      	Year ended March 31, 2005	Year ended March 31, 2006	Year ended March 31, 2007
      Opening Price	263	347	615
      High	361	623	694
      Low	242	327	449
      Closing Price	347	617	494

   2. Share Price for the Last Six Months (in JPY)

      	March	April	May	June	July	August
      Opening Price	509	498	499	583	651	680
      High	510	517	594	695	729	686
      Low	470	485	498	583	641	478
      Closing Price	494	501	584	680	681	526

   3. Share Price on the Day Immediately Preceding the Date of Resolution of Issuance (in JPY)

      	As of September 14, 2007
      Opening Price	554
      High	565
      Low	545
      Closing Price	552

   (4)Relevant Equity Financing

   - Third-Party Allotment

   Issue Date	October 5, 2007
   Amount of Newly Raised Capital	JPY 89,180,000,000 (Estimated Balance of Proceeds) (Issue Price: JPY 510)
   Total Number of Outstanding Shares at Offer	671,705,087 shares
   Number of Shares to be Issued by the Relevant Capital Increase	176,000,000 shares
   Total Number of Outstanding Shares after Offer	847,705,087 shares
   Party to Subscribe	Infinity Alliance Limited

   Note: The issuance of the new shares by the third party allotment is subject to the condition that the period has been shortened, during which an inward direct investment pertaining to an inward direct investment notification under the Foreign Exchange and Foreign Trade Law of Japan to be filed by the allottee is prohibited, so that the period ends prior to the payment date.

   (5)Equity Financing Conducted over the Last Three Years

   - Unsecured Bonds with Stock Acquisition Rights (Convertible-Bonds Type) - 4th Series

   Issue Date	September 26, 2005
   Amount of Newly Raised Capital	JPY 17,960,000,000 (Estimated Balance of Proceeds)
   Total Number of Outstanding Shares at Offer	631,705,087 shares
   Number of Latent Shares at Offer	Number of the latent shares based on the initial conversion price (JPY 624): 28,846,153 shares
   Status of Conversion (Status of Exercise) as of the Date hereof	Number of the converted shares (number of exercised shares): none(Balance: JPY 18,000,000,000 / Conversion Price (Exercise Price): JPY 624)
   Initial Use of Capital	Application to investment in petroleum refinery equipment, investment in and loan to subsidiaries and investment in equipment of filling station
   Scheduled Period of Use	From fiscal term 2005 to 2007
   Status of Use as of the Date hereof	JPY 14,711,000,000 has been applied to the above use by the end of fiscal term 2006 and amount of balance will be applied to the above use by the end of fiscal term 2007.

   - Capital Increase by Public Offering

   Issue Date	September 15, 2005
   Amount of Newly Raised Capital	JPY 19,236,160,000 (Estimated Balance of Proceeds) (Issue Price: JPY 523.68)
   Total Number of Outstanding Shares at Offer	631,705,087 shares
   Initial Use of Capital	Application to investment in petroleum refinery equipment, investment in and loan to subsidiaries and investment in equipment of filling station
   Scheduled Period of Use	From fiscal term 2005 to 2007
   Status of Use as of the Date hereof	JPY 14,711,000,000 has been applied to the above use by the end of fiscal term 2006 and amount of balance will be applied to the above use by the end of fiscal term 2007

   - Capital Increase by Third-Party Allotment

   Issue Date	September 27, 2005
   Amount of Newly Raised Capital	JPY 1,561,040,000 (Estimated Balance of Proceeds) (Issue Price: JPY 523.68)
   Total Number of Outstanding Shares at Offer	631,705,087 shares
   Party to Subscribe	Nomura Securities Co., Ltd.
   Initial Use of Capital	Application to investment in petroleum refinery equipment, investment in and loan to subsidiaries and investment in equipment of filling station
   Scheduled Period of Use	From fiscal term 2005 to 2007
   Status of Use as of the Date hereof	JPY 14,711,000,000 has been applied to the above use by the end of fiscal term 2006 and amount of balance will be applied to the above use by the end of fiscal term 2007

4. Major Shareholders and Ratio of Shareholding

   Before Offer (as of March 31, 2007)		After Offer
   Japan Trustee Services Bank, Ltd. (Trustee)	8.49%	Infinity Alliance Limited	20.76%
   Mizuho Corporate Bank, Ltd.	4.66%	Japan Trustee Services Bank, Ltd. (Trustee)	6.73%
   The Master Trust Bank of Japan, Ltd. (Trustee)	4.28%	Mizuho Corporate Bank, Ltd.	3.69%
   Mitsui Sumitomo Insurance Company, Limited	3.25%	The Master Trust Bank of Japan, Ltd. (Trustee)	3.39%
   The Bank of Tokyo-Mitsubishi UFJ, Ltd.	2.94%	Mitsui Sumitomo Insurance Company, Limited	2.58%
   The Kansai Electric Power Co., Inc.	2.76%	The Bank of Tokyo-Mitsubishi UFJ, Ltd.	2.32%
   Tokio Marine & Nichido Fire Insurance Co., Ltd.	2.58%	The Kansai Electric Power Co., Inc.	2.19%
   Sompo Japan Insurance Inc.	2.35%	Tokio Marine & Nichido Fire Insurance Co., Ltd.	2.04%
   Nippon Life Insurance Company	2.17%	Sompo Japan Insurance Inc.	1.86%
   Japan Trustee Services Bank, Ltd. (Trustee No.4)	2.16%	Nippon Life Insurance Company	1.72%

   Note: Ratios of shareholding after offer are based on the number of the shares of the shareholders as of March 31, 2007 except for the ratio of Infinity Alliance Limited.

5. Effect on Business Result

   The business alliance and capital increase is expected to have no effect on consolidated or nonconsolidated business result of this fiscal year. We will discuss and implement specific measures with respect to the alliance and timely announce important information to be disclosed.

6. Reasonableness of Conditions of Issuance

   (1)Reason for Decision of Issue Price

   We decided the Issue Price, which is 96 % (rounded up to the nearest JPY 1) of the average of the daily closing prices (regular way) of a share of common stock of the Company on the Tokyo Stock Exchange for a period of 30 trading days ending on the trading day immediately preceding the date of the resolution of the issuance (from August 6, 2007 to September 14, 2007 in this case).

   Considering volatile stock market, we decided the issue price on the basis of the average of the closing prices for the period above, which we believe reflects the corporate value of the Company more precisely than the closing price on the trading day immediate preceding the date of the resolution of the Board of Directors.

   We decided the level of discount taking into account various factors comprehensively, including the total number of outstanding shares of the Company, the number of the shares to be issued by the third-party allotment, the current stock market situation, the possibility of market fluctuation until the payment date and the necessity of the issuance of the shares.

   (2)Reason for Evaluation of Reasonableness of Number of Shares to be Issued and Dilution of Equity

   The scale of the offer of the shares to be issued by third-party allotment is approximately 25% of the outstanding shares of the Company and Infinity Alliance Limited will come to hold approximately 20% of the shares of the Company thereby. The offer of the shares to be issued by third-party allotment is aimed at increasing corporate value and stock value through establishment of comprehensive and strategic alliance with a company connected with the Emirate of Abu Dhabi, strengthening financial standing of the Company by the newly raised capital and expansion of strategic investment. Considering such aim, we believe that the number of the shares to be issued by the third-party allotment and degree of dilution are on a reasonable level.

7. Reason for Decision of Party to Subscribe

   (1)Outline of Party to Subscribe

   (a)	Trade Name	Infinity Alliance Limited (Special Purpose Company)
   (b)	Business Description	Subscription for and holding of shares in the Company
   (c)	Date of Incorporation	August 21, 2007
   (d)	Address of Head Office	Geneva Place, Waterfront Drive, PO Box 3469, Road Town, Tortola, British Virgin Islands
   (e)	Title and Name of Representative	Director Mohamed Al Mehairi Director Khalifa Al Romaithi Director Saeed Al Mehairbi
   (f)	Capital Stock	None, provided that, the capital stock as of the payment date shall be equivalent to the aggregate amount of the issue price.
   (g)	Total Number of Outstanding Shares	None, provided that, the total number of outstanding shares as of the payment date shall be obtained by dividing the amount of capital stock by US$1 (the nominal value per share shall be US$1).
   (h)	Net Assets	None, provided that, the net assets as of the payment date shall be equivalent to the aggregate amount of the issue price.
   (i)	Total Assets	None, provided that, the total assets as of the payment date shall be equivalent to the aggregate amount of the issue price.
   (j)	Fiscal Term End	December 31
   (k)	Number of Employees	None
   (l)	Main Business Partners	None
   (m)	Major Shareholders and their Holding Ratio	100% owned by International Petroleum Investment Company
   (n)	Main Financing Bank	Not applicable
   (o)	The Relationship between the Listed Company and the Party to Subscribe	Capital Relationship		None
   		Business Relationship		None
   		Personnel Relationship		None
   		Whether Falling into the "Related Parties" or Not		No
   (p)	Business Performance for Last Three Years	Not applicable
   Fiscal Term End		Year ended 31-Dec-04	Year ended 31-Dec-05	Year ended 31-Dec-06
   Sales		-	-	-
   Operating Income		-	-	-
   Ordinary Income		-	-	-
   Net Income		-	-	-
   Earnings per Share (in JPY)		-	-	-
   Dividends per Share (in JPY)		-	-	-
   Net Assets per Share (in JPY)		-	-	-

   (in millions of JPY)

   (2)Reason for Decision of Party to Subscribe

   The Company, IPIC and Infinity Alliance Limited entered into an agreement with respect to business alliance on September 18, 2007. The Company will discuss strategy and identify joint business opportunities with IPIC. We came to enter into the agreement as a result of consideration of establishment of the capital tie to strengthen such business alliance.

   (3)Policy for Shareholding of Party to Subscribe

   IPIC and Infinity Alliance Limited have a plan that Infinity Alliance Limited becomes a long-term shareholder to maximize corporate value of the Company on the basis of the business alliance with the Company.

   The Company will have the party to subscribe give assurance that, in the event that it transfers all or a portion of the new shares within two years from the date of the issuance, it shall notice such transfer in writing to the Company.

Terms and Conditions of Issuance of the Offered Shares

1. Number of the New Shares to be Issued
   176,000,000 shares of the common stock
2. Issue Price
   JPY 510 per share
3. Aggregate Amount of the Issue Price
   JPY 89,760,000,000
4. Amount of Capital and Capital Reserve to be Increased
   Amount of capital to be increased JPY 44,880,000,000
   Amount of capital reserve to be increased JPY 44,880,000,000
5. Manner of the Offering or Allotment
   Third-party allotment to Infinity Alliance Limited
6. Subscription Period
   From October 4, 2007 to October 5, 2007
7. Payment Date
   October 5, 2007
8. Delivery Date of Certificates of the New Shares
   October 5, 2007
9. Each of the above shall be subject to the conditions that the registration shall have become effective under the Securities and Exchange Law and that the period has been shortened, during which an inward direct investment pertaining to an inward direct investment notification under the Foreign Exchange and Foreign Trade Law of Japan to be filed by the allottee is prohibited, so that the period ends prior to the payment date.

Consolidated Medium-Term Management Plan

Stock Information

Financial Data

Annual Report

Corporate Report