ITOCHU Corporation is pleased to announce that on April 20 crude oil production began in the Azerbaijan sector of the Caspian Sea at the Deep Water Gunashli complex, in the Azeri-Chirag-Gunashli (ACG) field being developed in part through the subsidiary, ITOCHU Oil Exploration (Azerbaijan) Inc.

Production from the Deep Water Gunashli complex will be steadily increased to produce 320,000 barrels per day on plateau. That crude oil, together with already being produced from the Chirag and Azeri complexes, will be exported from the Sangachal Terminal located on the outskirts of the city of Baku in Azerbaijan to Ceyhan, Turkey (Mediterranean region) by way of Tbilisi, Georgia via the BTC (Baku-Tbilisi-Ceyhan) pipeline.

The Deep Water Gunashli complex is the Phase 3 of a comprehensive development plan for ACG oil complexes and follows the Chirag (Early Oil Production), Central Azeri (Phase 1), and West Azeri and East Azeri (Phase 2). With production begun at Deep Water Gunashli, the ACG field development has completed all initially planned phases and has now shifted to the production stage. Crude oil production from all ACG field is expected to exceed 1 million barrels per day in 2009 as the initial plan.

ITOCHU acquired a 3.9205% interest in the field in 1996 and was the first Japanese corporation to establish an office in Azerbaijan. INPEX Holdings, Inc., another Japanese corporation, is also participating in the project.

Additional Information

1) Summary of the ACG Field (Production Sharing Agreement)

ACG Field is located in the Caspian Sea in Azerbaijan and covers a 432.4km² area. The Deep Water Gunashli complex is located about 100km east of the country's capital city, Baku, and has a water depth of approx. 175m. ACG Field consists of 3 oil fields, Azeri, Chirag, and Gunashli, and has 54 billion barrels as recoverable reserves. The Production Sharing Agreement for ACG field was signed in 1994.

2) Summary of participation and partners

ITOCHU Oil Exploration (Azerbaijan) Inc., a subsidiary of ITOCHU Corporation, in 1996 acquired a 3.9205% interest in the fields. In addition to ITOCHU, other companies with a participating interest in the oil fields are: BP (operator-34.1%), Chevron (10.3%), State Oil Company of Azerbaijan Republic (SOCAR, 10%), INPEX (10.0%), Statoil Hydro (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), and Hess (2.7%).

3) BTC Pipeline

This crude oil pipeline stretches 1,768km in length from Baku in Azerbaijan to Ceyhan, Turkey on the coast of the Mediterranean Sea by way of Tbilisi, Georgia and can handle 1 million barrels of oil per day. The first shipment of crude oil from Ceyhan began in June 2006. ITOCHU, through its subsidiary ITOCHU Oil Exploration (BTC) Inc., has a 3.4% invested share in BTC Co., the company that builds and operates the pipeline, for the purpose of ensuring a route to carry the crude oil produced at ACG.

Related Information

• Detailed information  (* To information on the next page)
• Related News—October 24, 2006
• Related News—January 6, 2006
• Related News—May 25, 2005

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