Enhance profitability through business process re-engineering, etc. with “autonomy” as a keyword
The ENEOS Group has established three basic policies in the third Medium-Term Management Plan. Of these policies, the starting point for everything else is the establishment of a solid earnings base.
We will increase our revenue streams in the interim and reallocate the cash we generate therein to initiatives for the realization of the energy transition. Measures to be taken for the establishment of a solid earnings base are as follows.
Basic Policy of Third Medium-Term Management Plan
Improving Refinery Problems
Regarding refinery problems, which was an issue in the second Medium-Term Management Plan, we examined and formulated improvement measures across the company while also utilizing external resources. We have divided the causes of these problems into equipment factors such as inspection programs and aging, and human factors, such as construction quality and operation skills, and are implementing countermeasures for each. In making improvements, we will appropriately invest in necessary repair costs and personnel. In addition, we define lower utilization rates due to unplanned problems as unplanned capacity loss (UCL) and monitor the status of improvements. By reducing UCL from 9% in fiscal 2022 to 3% in fiscal 2025, we will increase earnings by tens of billions of yen.
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Unplanned Capacity Loss
Measures to Reduce Refinery Problems
Maximization of Value of the Oil and Natural Gas E&P Business
In the Oil and Natural Gas E&P business, we are implementing management for the conventional Oil and Natural Gas E&P business and for environmentally conscious businesses. In the conventional Oil and Natural Gas E&P business, we will work on increasing sales volumes for LNG, which is expected to see global demand growth as a transitional energy towards decarbonization, with relatively low emissions of greenhouse gases. To this end, we will carry out additional development in our existing LNG project areas in Indonesia, Malaysia, and other countries. In June 2023, we signed an agreement to acquire LNG interests in Papua New Guinea. Under this project, we plan to implement CCS, in which acid gases containing CO₂ are injected underground. As a project with low greenhouse gas emissions, we aim to start production at the end of 2027 or the beginning of 2028. Going forward, we will continue to leverage the wealth of knowledge we have cultivated in the Southeast Asia region and our good relationships with the governments of various countries to further improve profitability as a base business for securing and expanding management resources.
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Indonesia Tangguh Train 3 Expansion Project
Project for train expansion enabling early production of undeveloped gas fields that have already been discovered.
Large and long-term contribution to future cash flow
Interest held 12.2%
Start of production FY2023 Q3 (scheduled)
Contribution to sales volume 8,000 boed (FY2024 forecast)
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Malaysia Block SK10 Helang Gas Field
Additional Development ProjectAdditional development project in the block using existing production facilities
Contribute to generation of cash flow in the third Medium-Term Management Plan
Interest held 75% (ENEOS is operator)
Start of production FY2024 Q3 (scheduled)
Contribution to sales volume 3,000 boed (FY2025 forecast)
Maximization of Value of the Oil and Natural Gas E&P Business
Increasing Production Capacity of Semiconductor Materials and ICT Materials
In anticipation of increased semiconductor demand and especially growth of state-of-the-art semiconductors, we are making investments in expansions that will capture market growth, in addition to development and material proposals that align with customer needs. In addition to the construction of plants for sputtering targets in Hitachi City, Ibaraki Prefecture and Mesa, Arizona in the United States, we have acquired a large-scale site to construct a plant in Hitachinaka City, Ibaraki Prefecture, and are planning to increase production capacity of semiconductor materials with a focus on sputtering targets.
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Enhancement of capacity through launch
of new plant in HitachinakaAs demand for advanced materials is expected to expand in the future, a new plant will be built in Ibaraki Prefecture, which is a strategic site for metals, with consideration of room for expansion for the launch of new business due to limitations on space in existing plants.
FY2025 Start operation of each process (scheduled)
FY2026 Start of operations (scheduled)
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Increase of production through launch
of new plant in North AmericaA new plant will be built in Arizona, USA, to build a stable supply system and maintain a high share in the semiconductor materials market in response to growing demand for semiconductor targets, the importance of BCP in that product area and customers’ requirements, in addition to operating new businesses including products in other businesses.
FY2024 Start operation for sputtering target process (scheduled)
FY2026 Start operations for other strategic products process (scheduled)
Pursuit of Growth of Semiconductor Materials and ICT Materials