Report: Russia open to Japanese ownership of Siberian energy projs

MOSCOW, Feb 24 (PRIME) -- Russia is willing to let Japanese investors take majority stakes in large-scale oil and natural gas projects, Deputy Prime Minister Arkady Dvorkovich told Nikkei Asian Review daily in an interview published on February 22, offering an incentive that has been used to attract Chinese capital.

Dvorkovich also said in the interview that Moscow needs to see major progress on economic cooperation with Japan before President Vladimir Putin makes a visit – a diplomatic goal that Prime Minister Shinzo Abe's government has been working to achieve.

In the past, Russia rarely allowed significant foreign ownership of major onshore oil fields, such as those in Siberia, which it deems strategically important assets. But Western sanctions imposed in response to the Ukraine crisis have squeezed the flow of financing to the oil industry, prompting Moscow to court Chinese investment. A number of Chinese companies have since acquired Russian energy concessions.

This same incentive also applies to "Japanese investors with strategic development plans," said Dvorkovich, who handles economic policy.

In opening the door to Japanese investment, Russia appears to seek not only capital, but also a safeguard against economic overdependence on China.

Despite the sanctions, Russia has had "very constructive exchanges with Japanese companies," the deputy prime minister said, adding that such interaction "creates a good environment for political dialogue."

A trip by Putin to Japan would require a "considerable package of agreements" on economic cooperation, Dvorkovich said.

Tokyo has a long-running dispute with Moscow over a Russian-administered part of the Kuril Islands that Japan calls the Northern Territories and claims sovereignty over.

Dvorkovich said Russia is interested in joint economic development there involving Japanese and other foreign companies, but he reiterated Moscow's position that the islands belong to Russia. A new type of economic zone will get underway there soon, he said.

On plans for a possible visit to Japan by Ukrainian President Pyotr Poroshenko this spring, Dvorkovich would only say that Russia supports international efforts to bring stability to the situation in Ukraine. He recommended that Japan keep tight control over how its economic aid is used there.

Russia's economy has been hit hard by the fall in the price of crude oil. To counter the recession, the government will finalize a package of emergency measures within a week, including aid for manufacturing and other sectors, Dvorkovich said, adding that Japanese automotive companies would also qualify for such assistance.

Russia's agreement with Saudi Arabia to hold oil output steady – a deal meant to put a floor under the price – accords with the Russian government's own production plans and is something that can be implemented, the deputy prime minister said.

"The market understands that Russia will not try to increase production aggressively," he said.

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