A joint venture between Japanese and Russian companies will soon start commercial production of crude oil from an oil field in East Siberia, one of the companies said Wednesday, evidence of what could signal improved economic ties between the countries.
Japanese Prime Minister Shinzo Abe and Russian President Vladimir Putin are to meet Thursday and Friday in Japan, with an eight-point blueprint to forge closer economic ties a major topic.
By strengthening the economic relationship, Abe hopes to make progress in resolving a territorial dispute over four Russian-held, Japanese-claimed islands off Hokkaido which has hampered relations for seven decades.
The Russian government is expected to give the nod, possibly by the end of this year, to production by the Russian-Japanese venture from oil fields in the Irkutsk region, according to Inpex Corp., a Japanese oil and gas production company.
The joint venture INK-Zapad is 51 percent owned by Russia’s Irkutsk Oil Co., and the remainder by three Japanese companies — Inpex, Japan Oil, Gas and Metals National Corp. and trading house Itochu Corp.
The crude oil produced is scheduled to be sold within Russia as well as exported to Japan and other Asian markets, Inpex said.
Oil produced in Russia will benefit Japan through savings on transportation costs due to geographical proximity, while Russia gains from Japanese investment in the country’s energy sector.