Russia's Rosneft Pairs With Japanese Firm For Exploration

Russian oil company Rosneft has paired with Japanese company Inpex to explore for hydrocarbons in the Sea of Okhotsk.

 A deal signed Wednesday in Tokyo gives Inpex exclusive negotiation rights for final agreements for the exploration and development of the fields off the port of Magadan.

Japanese newspaper Asahi Shimbun says the move follows an agreement between Prime Minister Shinzo Abe and Russian President Vladimir Putin at a summit in Moscow in April to promote energy sector cooperation in the Russian Far East. This would involve development of liquefied natural gas and petroleum resources.

The signing of the final contract, expected before the end of the year, will pave the way for the two firms to set up a joint venture in which Inpex expects to obtain a 33.33% stake. Estimated recoverable reserves of the two blocks - named Magadan 2 and Magadan 3 - stand at 1,577 million tonnes (11.5 billion barrels) of oil equivalent, worth nearly nine years of Japanese crude imports, Rosneft said in a statement. Japan imported 1.33 billion barrels of oil equivalent in the year ended in March.

Reuters notes that Rosneft has signed similar cooperation agreements with Exxon Mobil Corp, Italy's Eni and Norway's Statoil. The Russian company wants to have a broadbased cooperation with Japan, including in gas, LNG and petrochemical and power sectors, Ryo Minami, director of petroleum and natural gas at Japan's Agency for Natural Resources and Energy, told reporters in Tokyo on Wednesday, citing Rosneft.

Exploration surveys in the two blocks could start in 2017 and drilling is expected to start around the mid-2020s, the Yomiuri newspaper said. Financial terms of the deal were not revealed by the companies. But the Yomiuri said Japan Oil, Gas and Metals National Corp will defray 50 to 75% of the costs during exploration, and the Japan Bank for International Cooperation will also provide finance for the full development stage.