May 29 (Bloomberg) -- Inpex Corp., Japan’s biggest energy explorer, and Russia’s OAO Rosneft signed a preliminary agreement to develop oil and gas blocks in the Sea of Okhotsk.
A venture will be set up to explore the Magadan-2 and Magadan-3 offshore blocks near Magadan city in far eastern Russia once final accords are signed, Inpex said in a statement. The blocks, located in the northern part of the Sea of Okhotsk at a depth of 120 meters (394 feet) to 180 meters, are estimated to hold recoverable resources of about 1,577 million metric tons of oil equivalent, state-run Rosneft said in a statement.
Inpex follows rivals such as Exxon Mobil Corp. in partnering with Rosneft to explore Russia’s Arctic shelf. Japan, which imports more than 80 percent of its oil from the Middle East, is trying to diversify supply after the Fukushima disaster in March 2011 forced the country to buy more fossil fuels.
“Partnership between Rosneft and Inpex will contribute significantly not only to the development of the Russian Far East, but also to the development of economic relations between Russia and Japan, and will strengthen energy security of our partners,” Rosneft President Igor Sechin said in the statement.
Under the initial agreement signed between Sechin and Inpex President Toshiaki Kitamura in Tokyo today, the Japanese company will hold a 33.33 percent stake in the exploration project, according to Rosneft’s statement. The Japanese company will finance geological exploration work at the two blocks, according to Rosneft.
Japan Oil, Gas & Metals National Corp., a Japanese government-affiliated company known as JOGMEC, will pay as much as 75 percent of the costs during exploration, the Yomiuri newspaper reported earlier today. The Japan Bank for International Cooperation will help finance the project at the full development stage, the Yomiuri said.
Final agreements are expected to be signed by the end of 2013, Rosneft said.
Japan imported about 181 million tons a year of crude in 2012, according to data compiled by the trade and industry ministry.
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