MOSCOW (Kyodo) Russo-Japanese talks are progressing over a proposal to let Japanese firms help Russia develop a Siberian oil field in connection with a project to lay a Pacific coast-bound pipeline, sources said Thursday.

The two governments are talking to clear the way for Prime Minister Junichiro Koizumi and Russian President Vladimir Putin to conclude the deal during a bilateral meeting in mid-July in St. Petersburg on the sidelines of this year’s Group of Eight summit, the sources said.

Japan’s offer is designed to ensure that Russia commits itself to building the eastern half of the projected 4,188-km pipeline so Siberian oil can be shipped to Japan, they said.

Russia has not decided when to start building the eastern half, although it began the western half on April 28 with an eye to completion in 2008.

The western half starts in the Siberian city of Taishet, near Lake Baikal, and is to end in Skovorodino, which will be the midpoint of the entire pipeline, near the Russian-Chinese border.

The sources said Japan is leaning toward joint development because it is difficult for foreign corporations to single-handedly develop oil fields on Russian soil without local partners.

Inpex Corp., trading houses and Japan’s state-backed oil explorer Japan Oil, Gas and Metals National Corp., are considering putting up capital for the project, with JOGMEC leaning toward shouldering half of the entire development cost, according to the sources.

But the two governments have not yet reached agreement on which oil field to develop, the sources said.

The field could be one that Russian firms have already acquired mining concessions for or a field without Russian concessions.

Oil-hungry Japan has been asking Moscow to build the eastern half as quickly as possible, but Putin said construction of the entire pipeline is contingent on developing the eastern Siberian oil field.

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