The Japan Bank for International Cooperation (JBIC) has recently signed a loan agreement amounting up to US$450 million with Sakhalin Oil and Gas Development (SODECO) from a total loan of US$900 million to be co-financed with Mizuho Bank, Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust Bank.
This loan is intended to provide the necessary funds to the Sakhalin-I Odoptu Field Stage-2 development, a project in which SODECO participates.
The Sakhalin-I project, in which SODECO holds a 30% participating interest, develops and produces petroleum and natural gas from the Chayvo, Odoptu, and Arkutun-Dagi fields located off the northeast coast of Sakhalin Island, Russia, and has off-loaded over 550 million barrels of crude oil from 2006 to date.
SODECO, whose shareholders are the Minister of Economy, Trade and Industry, Japan Petroleum Exploration, ITOCHU Corporation, Marubeni Corporation, INPEX CORPORATION and ITOCHU Oil Exploration, is entitled to receive a quantity of crude oil in proportion to its participating interest and sell the oil to Japan and other Asian countries.
While Japan is highly dependent on Middle East for energy sources, it is expected that the JBIC's support for the Odoptu Field Stage-2 development project will contribute to the diversification of energy supply to Japan. The project is also considered vital to Japan's resource strategy given that the fields are located in Russian Far East, which is geographically close to Japan.
JBIC will continue to financially support the securing of a stable supply of energy for Japan by proactively backing Japanese companies for their development and acquisition of energy resources, with its various financial facilities and schemes for supporting projects, as well as its risk-assuming function.