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The Japanese government could become a shareholder in Russia’s oil giant Rosneft, as part of a broad cooperation in the energy sector. The investment that will go into such a deal may reach US$9.7 billion.
The cooperation will be discussed by Japan’s PM Shinzo Abe and Russian President Vladimir Putin on the sidelines of the Eastern Economic Forum, to take place in Vladivostok, in the Russian Far East.
It could also involve Japanese participation in oil and gas exploration projects in Siberia as well as the provision of technical assistance from Russian experts in the decommissioning of the Fukushima Daiichi nuclear power plant that caused the 2011 disaster following an earthquake and a tsunami.
If Abe decides to go ahead with the Rosneft investment, it will get Japan a 10-percent interest in the company. The stake will be bought via a state-supported firm, the Japan, Oil, Gas and Metals National Corp.
According to some Russian media, Abe’s presence at the forum will be the highlight of the event, to be taken as demonstration of Tokyo’s willingness to forge some closer ties with Russia in a bid to catch up with China’s growing regional influence. Among the topics of discussion, Abe and Putin are also expected to address a long-standing dispute between Russia and Japan concerning four Kuril Islands, currently controlled by Russia.
The choice of investment target as part of this closer cooperation cannot be coincidental. Although Russia has put up for sale stakes in several state-controlled businesses, Rosneft is the target of Chinese interests too.
This broad cooperation would offer some substantial benefits to the Russian side and should be seen as one more indication that Moscow is now almost completely turned East. All the latest that’s coming from Moscow points in that direction, from the cozying up with Beijing, to the thawing of relations with Turkey, and the increasingly closer ties with Iran.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.