Settlement of Claims arising from Gulf Oil Spill

May 20, 2011 Project

In connection with the oil spill incident in the Gulf of Mexico, Mississippi Canyon Block 252, that occurred on April 20, 2010 (the "Incident"), Mitsui Oil Exploration Co., Ltd. ("MOECO") and MOECO's subsidiaries have reached a settlement with BP Exploration & Production Inc. ("BP"), the operator of the project.

As a result of the settlement, MOEX USA Corporation ("MOEX USA"), a 100% subsidiary of MOECO, is to pay to BP an amount of U.S. $1.065 billion, and BP waives all relevant claims it might have against MOECO, MOEX USA and MOEX Offshore 2007 LLC ("MOEX Offshore"), which holds a 10% leasehold interest in the relevant block and is a 100% subsidiary of MOEX USA. For the past twelve months MOEX Offshore has been withholding payment of the amounts that BP has invoiced in connection with the Incident, amounting to approximately U.S. $ 2.144 billion. As a result of the settlement, MOEX Offshore will have no obligation to pay the invoiced amounts, and BP will not issue any further invoices for costs in connection with the Incident.

In addition, BP agreed to fully indemnify the MOECO and its subsidiaries with respect to most third-party claims alleging property damage, personal injury and economic loss arising out of the Incident and post-explosion clean-up efforts, including claims brought by various private businesses, governments, property owners and individuals, as well as Natural Resource Damage (NRD) costs.

MOEX Offshore is transferring to BP all its interest in the relevant block and most of its claims against the parties involved in the Incident.

BP, however, is not providing an indemnity with respect to punitive damages or civil penalties, if any, based on the alleged actions or inactions of MOECO and/or its subsidiaries. MOECO and its subsidiaries will continue to take appropriate actions with all of the lawsuits, including those seeking punitive damages or civil penalties.