Eric Watkins
Senior Correspondent
LOS ANGELES, June 8 -- Talks between Japan and Russia are said to be progressing over a proposal to have Japanese firms join Russian development of an East Siberian oil field in connection with the project to lay the 4,188-km East Siberia Pacific Ocean crude oil pipeline.
Reports say the two sides have not yet agreed on which specific Siberian oil field they will develop but that Japan Oil, Gas & Metals National Corp., an independent administrative agency, in oil development in eastern Siberia is being considered as a participant, while private sector firms such as Sumitomo Corp. and Inpex Corp. also have indicated a desire to invest.
The two governments are talking to prepare for a deal that could be concluded by Japanese Prime Minister Junichiro Koizumi and Russian President Vladimir Putin when they meet in mid-July on the sidelines of the Group of Eight summit to be held in St. Petersburg.
Russia has long said it may be possible to export as much as 80 million tonnes/year of oil through the fully extended pipeline, but that meeting such a target will depend on output from fields in eastern Siberia which have yet to be developed.
The Japanese side hopes that an agreement with Russia on development of the fields, in which the oil produced will be exported to Japan, will speed the early construction of the eastern half of the projected ESPO line so that the Siberian oil can be shipped to Japan.
Due to such commercial considerations, Russia has not decided when, if ever, to start construction of the eastern half of the line, although it started building the western half on Apr. 28 under a plan to complete the portion in 2008.
The western half will start from Taishet near Lake Baikal and will extend to Skovorodino near the Russian-Chinese border, the midpoint of the entire pipeline route. From there, Russia plans to export oil to China via railroad or a branch line of the pipeline.
In May, Japanese Foreign Minister Taro Aso urged Russian Chamber of Commerce and Industry Pres. Yevgeny Primakov to hasten the start of talks on construction of the ESPO line (OGJ Online, May 30, 2006).
Contact Eric Watkins at [email protected].
