We are pleased to announce that Cosmo Oil Co., Ltd. (hereinafter "COSMO"; headquarter: Minato-ku, Tokyo, Japan; President & Representative: Yaichi Kimura; Share capital: JPY 107.2 billion) and Hyundai Oilbank Co., Ltd. (hereinafter "HDO"; headquarter: 640-6 Daejuk-ri, Daesan-eup, Seosan-si, Chungchongnam-do, Korea; President and CEO: Young Tae Seo) have entered into a Joint Venture Agreement (hereinafter "JVA") for the establishment of a joint venture company (hereinafter "JVC") to undertake the paraxylene business in relation to a previously entered into Memorandum of Agreement announced on June 9, 2009. Outlined below are the main contents of this JVA.

1.Signing of JVA in relation to the paraxylene business

1.Signing date of JVA

October 1, 2009

2.Signers

COSMO (President & Representative: Yaichi Kimura)
HDO (President and CEO: Young Tae Seo)

1.Planned establishment timing	November, 2009
2.Company name	To be determined
3.Location	Seoul, Korea
4.Initial paid-in capital	KRW 10 billion (approx. JPY 700.6 million exchanged at KRW 1 = JPY 0.076)
5.Investment ratio	COSMO 50%, HDO 50%
6.Primary business	Production and sale of paraxylene and other related products
7.Fiscal year-end	December

2.Purpose and near-term schedule

In the "Third Consolidated Medium-Term Management Plan", COSMO positioned the petrochemical business as its growth strategy to enhance its business portfolio; this developed into an agreement with HDO, a company receiving investment from International Petroleum Investment Company (a wholly owned investment subsidiary of the Emirates of Abu Dhabi and one of Cosmo's major shareholders), to establish a JVC to undertake the paraxylene business.

Following this Agreement, Cosmo aims to expand and stabilize its revenue and balance the demand and supply of gasoline distillates by establishing a supply chain that encompasses refinery of crude oil and production of paraxylene; this will be achieved by providing a stable supply of mixed-xylene, sourced from a mixed-xylene distillation unit which Cosmo is planning to build in the Yokkaichi refinery complex and from Cosmo's group company, to a paraxylene plant which is planned to be built by the JVC.

As for the near-term schedule, the JVC will be established in Korea in November 2009, followed by JVC's acquisition of an existing paraxylene plant (production capacity 380k ton/year) from HDO in December of the same year, whereupon the JVC will start its operation. By 2013, construction of a new paraxylene plant (production capacity 800k ton/year) by the JVC is expected to be completed, which will establish paraxylene sales capacity of 1,180k ton/year.

Cosmo will supply mixed-xylene to the JVC's new paraxylene plant from its mixed-xylene distillation unit (production capacity 300k ton/year) which is planned to be constructed in the Yokkaichi refinery complex by November 2011, and from an existing mixed-xylene unit (production capacity 300k ton/year) owned by Cosmo's group company.

The future prospects and the financial position of the JVC, as well as the impact of this transaction on COSMO's consolidated and standalone performance, are to be announced in due course.