Japanese energy majors may invest in Russia’s oil megaproject in Arctic

Russia’s largest oil company, Rosneft, is in talks with Japanese state-run oil and gas firm Jogmec, and other possible investors to secure funds for its massive Vostok oil project in the Russian Arctic.

It was earlier reported that Rosneft CEO Igor Sechin met with representatives from Japanese companies including Mitsubishi, Mitsui & Co, Itochu, and Inpex, as well as Japan Petroleum Exploration Co (JAPEX) and Marubeni to seek funding for the giant oil project, Reuters and the Financial Times reported on Wednesday. The Japanese investment could help Rosneft to cover between 10 to 40 percent of the project’s costs.

On Thursday, Japan’s state-owned oil group, Japan Oil, Gas and Metals National Corporation (JOGMEC) confirmed to TASS that it held talks with Sechin, but did not elaborate on the issues they discussed. Meanwhile, the agency linked to Japan’s Ministry of Economy, Trade and Industry also told TASS about the meeting with Rosneft, but did not give any further details.

Participating in the project could help resource-poor Japan diversify its energy supply. Tokyo imports around 90 percent of its oil from the Middle East, and there are mounting concerns over possible disruptions due to rising tensions in the region.

Vostok Oil was set up to explore the biggest existing oil deposits in northern Russia, including the Lodochnoye, Tagulskoye, and Suzunskoye oilfields, as well as other perspective oil sites. The project’s annual crude production could be up to 100 million tons, according to preliminary estimates.

The project will require significant funding to develop the fields and related infrastructure. In October, Russia’s Deputy Energy Minister Pavel Sorokin said that it will cost about 10 trillion roubles ($158 billion).

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