Team size: 17

What are the most significant cases, transactions or projects that your legal team has recently been involved in?

In the last year, the legal department has actively supported the company in its energy transition efforts. Specifically, it supported the significant growth of the renewable energy business through the acquisition of domestic and international renewable energy projects and the divestment of non-core oil and gas projects. The increase in the number of projects coincides with our management’s reassessment of its business strategy to adapt to the Japanese Government’s commitment to make Japan carbon neutral by 2050. We expect to see a continuation of the upward trend in the growth of renewable projects, as INPEX aims to achieve net-zero carbon emissions by 2050 through the expansion of renewable and hydrogen energy as well as the use of carbon capture and utilisation technologies.

Our legal team has supported several company achievements, for example, Inpex has acquired a 16.7% stake in the Moray East offshore wind farm off the east coast of Moray, Scotland, UK. The share acquisition is between INPEX Renewable Energy Europe Limited (INPEX Renewable) and Diamond Generating Europe Limited (DGE), a subsidiary of Mitsubishi Corporation. Investments Limited (DGI), agreed to transfer shares in DGI from DGE to Inpex Renewable, which was established in the UK to promote Inpex’s renewable energy business in Europe. The Moray East offshore wind farm has been in commercial operation since April 2022, with an output size of 950 megawatts, produced by 100 9.5 megawatt units. In 2022, INPEX Renewable will acquire from Diamond Generating Europe B.V. (DGE-NL), a Dutch-registered subsidiary of Mitsubishi Corporation, a 50% stake in the Luchterduinen offshore wind farm operating off the Dutch coast and a 50% stake in the Borssele III/IV offshore 15% stake in the Borssele III/IV offshore wind farm.

Another one of the projects our team has supported is the FID on Kashiwazaki Clean Hydrogen/Ammonia Project. Inpex has FID the drilling and construction of related facilities for the Kashiwazaki Clean Hydrogen and Ammonia Demonstration Project at its East Kashiwazaki gas field in Niigata, Japan.

The project will involve the transportation of natural gas produced at the Inpex-operated Niigata gas field to the Hirai area via existing pipelines, where a new hydrogen production facility will be built to produce 700 tonnes of blue hydrogen per year.

A portion of this hydrogen will be used to produce blue ammonia, while the remainder will be used to generate power. The CO2 generated during the production of hydrogen and ammonia will be separated, pressurised, and injected into a subsurface gas reservoir as part of a Carbon Dioxide Capture, Utilization and Storage (CCUS) initiative to ensure the production of blue hydrogen and ammonia and contributing to low carbon movement.

This will be Japan’s first demonstration project that integrates the production and usage of blue hydrogen and ammonia. This is one of the few projects in the world that has taken FID to construct an actual production plant, while most blue hydrogen and ammonia production projects are currently only in the conceptual or planning stages. The project is also important from the perspective of Japan’s energy security, as it will produce clean energy from domestically sourced gas.

Another project that we have been involved in is the Rantau Dedap Geothermal Power Project in Indonesia. Inpex joined the Rantau Dedap Geothermal Power Project through Inpex Geothermal, a subsidiary established for the purpose of conducting geothermal business operations.

The project is based in the Rantau Dedap Geothermal Block located in Indonesia’s South Sumatra Province and has been jointly implemented by major international energy companies including ENGIE, Marubeni Corporation, Tohoku Electric Power, and a private Indonesian geothermal power generation business developer PT. Supreme Energy. Inpex joined the project by acquiring 27.4 percent of the shares of PT Supreme Energy Rantau Dedap.

The Rantau Dedap Geothermal Power Plant is currently in commercial operation with a rated output of 98.4 megawatts and produces a volume of electricity equivalent to what is consumed annually by approximately 450,000 households in Sumatra, Indonesia. Electricity generated by the plant using geothermal resources is planned to be marketed to Indonesian national power company PT PLN (Persero) over a 30-year period from the start of commercial operations in December 2021.

Following the completion of this acquisition, Inpex is now one of the largest foreign generators of geothermal power in Indonesia.

Our legal team has also supported in the transfer of interest in Lucius and Hadrian North Field in the Gulf of Mexico. Inpex, through its subsidiary, Inpex Americas, transferred its entire participating interest in the Lucius Field, in the US Gulf of Mexico’s Keathley Canyon (“KC”) blocks 874, 875, 918 and 919 and the Hadrian North Field located in KC blocks 918 and 919 (the “Lucius Project”) to Anadarko US Offshore, Murphy Exploration & Production Company – USA and Eni Petroleum US.

Inpex joined the Lucius Project in June 2012 and has been engaged in the development, production, and marketing of crude oil and natural gas under the operatorship of Anadarko. However, with a view to optimize the Inpex Group’s global asset portfolio, Inpex reached a decision to transfer its participating interest in the Lucius Project to the project partners.

Could you share an example of a time when your team came up with an innovation that improved how your legal team works and did not come at a large expense?

We have recently implemented AI-based legal technology to assist our lawyers with their contract review process. Although it is still in its early stages and somewhat limited in scope, it has not proved to be a significant cost. We believe it is having a beneficial impact on our team’s efficiency and workflow.

How important is choosing to work with external lawyers who align with your company’s values? 

When senior management ask us, “what does legal think?” They do not differentiate between in-house lawyers and external counsel. In this sense, it is essential that our in-house team clearly communicates what our corporate principles and values are, both at a high and at a case-by-case level, and that our external counsel should understand and seek to align their efforts with our values.

How do you suggest in-house lawyers build strong relationships with business partners? 

One of the core concepts of how the legal department operates is based on the mindset of working as one team with our commercial and technical colleagues. I believe that the legal department is a service organisation, and with that perspective, we strive to embed a culture of working with a commercial mindset within the team, while at the same time protecting the company’s legal interests.