Mikhail Kasyanov: Russia will encourage Japanese companies to seek new oil fields in Far East

Certain measures will be taken in the near future to encourage Japanese companies to start prospecting for new oil fields in East Siberia and the Far East. According to the government press office, this was announced today by Russian Prime Minister Mikhail Kasyanov after a meeting with managers of Japanese energy corporations in Tokyo.

They also discussed the construction of a Siberian oil pipeline. There are currently two possible routes for a pipeline from Angarsk, Russia.

The 'southern option' was proposed by YUKOS and involves laying a pipeline from the southern edge of Baikal along the Transsiberian railway. The Russian section of the pipeline would come to 1452 kilometres while the Chinese section would come to 795 kilometres. This project would cost about USD 1.8-2 billion.

The 'northern option' is a pipeline from Angarsk to Nakhodka with a branch pipeline to China. It would run along the western and northern banks of Baikal, along the Baikal-Amur railway and then on to the Chinese border. The length of the Russian section would be over two thousand kilometers while the Chinese section would be 920 kilometres. It is thought that this project, proposed by Transneft, would cost at least USD 3.5 billion.

The Russian is expected to make a final decision on the route of the oil pipeline by August 2004. The Japanese government prefers the 'northern option' as from Nakhodka oil will become available to other countries in that region, including Japan. In October 2003 Japan offered to provide Russia with up to USD 7 billion insisting that the pipeline must be built across Siberia to the Pacific Ocean instead of constructing it across the north east region of China.