Japanese and Russian oil companies have agreed to jointly develop an offshore field in the Okhotsk Sea near the city of Magadan, Inpex Corp. of Japan said Wednesday.
The agreement by Inpex and Russia's state-owned oil giant Rosneft paves the way for the Japanese oil company's acquisition of a nearly one-third stake in the oil development, Inpex said.
Japan has been dependent on the Middle East for most of its oil imports. Increasing imports from Russia will enable Japan to alleviate the risk of shipments being suspended because of regional conflicts while also slashing transportation costs.
Under the deal inked in Tokyo by Inpex President Toshiaki Kitamura and Rosneft CEO Igor Sechin, the two firms will "pursue the opportunity to jointly explore and develop" the offshore Magadan 2 and 3 exploration blocks located about 50-150 km south of the city of Magadan, Inpex said in a statement.
Inpex said the deal grants it the exclusive right to negotiate final accords for the joint project.
Though the site has not been explored, it is a "promising area where the discovery of oil and natural gas is expected," Inpex said.
The site covers an area of around 28,000 sq. km at a depth of some 100-200 meters, according to Inpex.
The Japanese government will back the project by making investments via the Japan Oil, Gas and Metals National Corp. and providing debt guarantees.
Prior to the agreement, Japan's energy agency chief, Ichiro Takahara, and Rosneft CEO Sechin held talks and shared the view that Japan, domestic firms and Rosneft could cooperate in other energy-related fields, according to a government official.