Japan National Oil Corp. has acquired exclusive exploration rights to major Mexican oil fields, paving the way for Japan to lessen its dependency on Middle Eastern oil, according to government sources.
JNOC was handed exclusive rights to explore the Chicontepec oil fields, situated on land along the Gulf of Mexico and east of Mexico City.
The fields are believed to have some of the largest oil reserves in the world and are estimated to hold around 70 billion barrels' worth.
Japanese oil development firms are expected to participate in production in the fields, with Japan obtaining exploitation rights in the future, the sources said Tuesday.
If these rights materialize, Japan will be able to reduce its dependency on oil from the Middle East, where it currently acquires nearly 90 percent of its total supply.
This will have a significant impact on the nation's energy security policy.
Under its current constitution, Mexico does not allow foreign firms to have exploitation rights to its oil fields.
JNOC's research may give Japan an advantage in terms of future negotiations over exploitation rights, the sources said.
According to the sources, JNOC will start its research this year and begin production preparations within the next five years.
JNOC's operations are to be taken over by the Metal Mining Agency of Japan after it is integrated with JNOC.
The body's integration is a part of a government program adopted by Prime Minister Junichiro Koizumi late last year to streamline 163 state-backed corporations.
The streamlining plan is a major part of Koizumi's structural reform drive, which is aimed at boosting the economy.