Russia's Rosneft seeks Japanese investors for giant Vostok oil development

• The project will require construction of pipelines, roads, a sea port and other infrastructure.
• Rosneft wants Japanese investors to stump up between 10pc and 40pc of the project.
• The Russian government has broadly agreed a new tax relief package to help develop the Arctic.

TOKYO: Rosneft CEO Igor Sechin is seeking investment in the company's $157 billion Vostok oil project in the Russian Arctic from Japanese trading houses and oil companies, three sources told Reuters.

Vostok Oil is a newly established company that was formed to unite Rosneft's projects in northern Russia, including the Lodochnoye, Tagulskoye and Suzunskoye oilfields, and other projects, including the Ermak Neftegaz venture with BP.

The project will require construction of pipelines, roads, a sea port and other infrastructure, two of the sources said. Crude oil is expected to be shipped to Asia via the North Sea Route (NSR).

Sechin needs backing because of the huge amounts required to develop the fields. The Vostok project will require about 10 trillion roubles ($157 billion) of investment, Russia's Deputy Energy Minister Pavel Sorokin told reporters last month.

Sechin briefed officials from Japanese companies including Mitsubishi Corp, Mitsui & Co, Itochu Corp  and Inpex Corp,, two of the sources said.

A third source who attended the meeting at the Mandarin Oriental hotel in Tokyo said that Japan Petroleum Exploration Co  (JAPEX) and Marubeni were also at the meeting.

The third source said about 50 people attended the meeting, with about 10 from the Russian side. Sechin didn't state how much he was seeking from Japanese investors but gave preliminary details on the project, the source said.

"We are not sure if they can realize this project. We need to think this over," said the source. "There were no numbers, it was just a first step to outline the project."

It was the first pitch overseas by the Russians for the project and Sechin is also planning to seek investors in China and India, he said.

Rosneft wants Japanese investors to stump up between 10pc and 40pc of the project, two of the sources said.

JAPEX, Mitsui and Itochu confirmed they had sent officials to the meeting with Sechin but declined to comment further beyond saying nothing had been decided on investing in Vostok.

A Mitsubishi spokesman said nothing has been decided on Vostok and declined to comment further. Inpex and Marubeni declined to comment.

The Russian government has broadly agreed a new tax relief package to help develop the Arctic, seen as a new oil-producing region for Russia, which is among the world's top crude exporters, Deputy Prime Minister Yuri Trutnev said earlier.

"If there is no tax break the project is not economical," said the source who attended the Sechin meeting.

Rosneft expects to produce up to 100 million tonnes of oil per year (2 million barrels per day), or a fifth of what Russia currently pumps.