Vsiting Russian Prime Minister Vladimir Putin invited Japanese business leaders to invest in a Russian pipeline project to carry oil across Siberia to the Pacific coast, while companies from both countries drew up an agreement to jointly develop an oil field in eastern Siberia, media reports said on May 12. The Eastern Siberia-Pacific Ocean (ESPO) pipeline is now under construction by Russia’s OAO Transneft. “If (you) hope for an early completion (of the pipeline), I would like more Japanese firms to participate in the project,” Putin was quoted as saying by officials of the Japan business federation, Nippon Keidanren.

While Japan may be interested in oil supplied through the ESPO, however, Japan’s ambassador to Russia recently made clear that his country has no plans to invest in the line’s extension from Skovorodino, near Russia’s border with China, to the Port of Kozmino on the Pacific Coast. “As far as we understand, ESPO leading to Japan will be built independently by the Russian company Transneft,” Japanese Ambassador to Russia Masaharu Konowas quoted by the press as saying.

“Of course, Japan is interested in this pipeline. We believe that energy cooperation in the Far East and Eastern Siberia is strategic for our countries. For Russia because it can diversify the direction of its energy supply, and for Japan because it will be able to diversify its energy sources,” Kono said. “The main thing is that Russia now intends to make an ‘energy window’ to the East, to Asia, and on the other hand, Japan intends to make a window from the East. Our interests coincide here, and that is very important,” Kono said.

Meanwhile, companies from Russia and Japan drew up an agreement to form a joint venture between Japan Oil, Gas and Metals National Corp (JOGMEC) and Russia’s Irkutsk Oil Co to start exploration in a field about 700 kilometres north of Irkutsk at a cost of about 15 billion yen (USD 153 million ), according to the Japanese government-affiliated body. Once the two areas eyed by the Japan-Russia joint venture are ready for commercial oil production, a Japanese private- sector firm would take over the operations from JOGMEC. The joint venture will aim to develop the Bolshetirsky and Zapadno-Yaraktinsky blocks, which lie in the northern reaches of the Irkutsk region. The oil will be transported to Japan via the ESPO pipeline.