14 October 2003 01:56
Japan lures Russia with Dollars 7bn offer on pipeline OIL SUPPLIES:
Japan has offered a financial package worth Dollars 7bn (Euros 6bn, Pounds
4.2bn) in its latest attempt to persuade Russia to build an oil pipeline
across Siberia to the Pacific instead of using a rival route into
north-eastern China.
A Japanese energy official said yesterday Tokyo was proposing Dollars 5bn to
support construction of a 4,000km pipeline to Nakhodka, and had added a
further Dollars 2bn for the development of Siberian oilfields, with some
support in the form of low-interest loans.
The move comes as competition intensifies with the Chinese, who are backing a
rival Dollars 2.5bn, 2,400km route to Daqing in China, designed to help meet
its rapidly growing energy needs and take advantage of Russia's
fast-expanding oil sector.
Russian officials have previously indicated their support for the
Angarsk-Daqing route, which was heavily supported by Yukos, Russia's
largest oil group and one of the principal beneficiaries. However, Mikhail
Kasyanov, the Russian prime minister, revived the uncertainty on a visit to
China last month by saying no decision had yet been taken on a pipeline
route, pending the results of an environmental investigation.
Igor Yusufov, Russia's energy minister, said last week that the Japanese
were ready to finance most of the construction costs and had agreed not to
seek a Russian government guarantee.
Despite earlier indications from Russian officials that the two routes would
be built, Mr Yusufov said it would be impossible to construct both at the
present time and expressed hope that a definitive choice would soon be made.
The Chinese pipeline has been under discussion for a decade but Tokyo has
lobbied heavily over the past year, arguing that oil could be shipped from
Nakhodka to leading world markets in Japan, east Asia and the US. Tokyo has
found support from Russian companies and planners who have warned of
excessive reliance on a single-destination country for its oil, and
highlighted the strategic advantages of the Pacific route to help foster
economic development in the far east of the country.
Transneft, the Russian state-owned pipeline operator, and Rosneft, the
state-owned oil group, which has significant operations in the far east and
is keen to develop two eastern Siberian oilfields, have pushed hard for the
Nakhodka route.
High-ranking Japanese officials, including Hitoshi Tanaka, deputy foreign
minister, and officials from Japan Bank for International Co-operation, have
visited Russia for talks on the oil deal recently, and hope an agreement may
be reached by the time Mr Kasyanov visits Japan in December.
Separately, Japan plans to resume financial assistance to Sakhalin, a Russian
island-territory that includes four small islands disputed by the two
countries.
Japan's interest in the pipeline stems from its desire to diversify its
oil supplies away from the Middle East and its concern about competition
caused by China's growing energy needs. China became a net importer of
oil in 1993 and is expected to overtake Japan during the next decade as the
world's second-largest importer of oil.
[FTI [The Financial Times]] |
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