Fukuda, Putin shake hands on joint oil deal

MOSCOW--Prime Minister Yasuo Fukuda and Russian President Vladimir Putin agreed here over the weekend to push forward their countries' first joint oil field development project in Russia's eastern Siberian region, Japanese government officials said.

The two leaders, in their summit meeting at Putin's official residence in Moscow on Saturday, also said they would cooperate on regional issues, including talks toward dismantling North Korea's nuclear program.

The two agreed to discuss the disputed Northern Territories issue and to sign a peace treaty officially ending World War II hostilities.

Fukuda's two-day visit was the first by a Japanese leader since former Prime Minister Junichiro Koizumi visited Russia in May 2005. Following talks with Putin, Fukuda met with president-elect Dmitry Medvedev, who takes office next month.

According to Japanese officials, the joint oil field project will be within the 3,747-square-kilometer Severo-Mogdinsky district, about 1,000 kilometers north of Irkutsk in East Siberia.

The project will involve a joint venture company set up between the Kawasaki-based Japan Oil, Gas and Metals National Corp., which is an independent administrative agency, and Russia's privately owned Irkutsk Oil Co.

The joint venture firm will undertake exploration and drilling in the area in a project that will run for five years. Joint costs are expected to reach about 10 billion yen.

The project will enable Japan to tap into oil from the East Siberia oil fields through a Pacific Ocean pipeline, currently under construction, that will extend to the Sea of Japan.

In their talks, the two leaders also discussed Pyongyang's nuclear program, including its alleged export of nuclear technology to Syria. They also agreed to cooperate in the six-party talks to demand a complete explanation of the North's nuclear programs.

Fukuda meanwhile asked Putin to exert influence to resolve the abduction issue. Putin responded by saying Moscow would cooperate on issues affecting stability in the Far East region, including the abduction issue.

On the disputed Northern Territories, Fukuda said progress is indispensable before bilateral relations can expand.

Putin replied that Russia intends to continue discussions on the isles, but stressed that overall progress in relations would also be necessary.(IHT/Asahi: April 28,2008)