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Natural Resources Financing for Kashagan Offshore Oil Field Development Project in the North Caspian Sea
Diversifying Japan's Energy Supply Sources

  • Region: Asia
  • Energy and Natural Resources
  • Overseas Investment Loans
October 27, 2005
  1. Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Shinozawa) signed today a loan agreement totaling up to US$649 million with INPEX North Caspian Sea, Ltd. (the Company), in which INPEX Corporation has an equity stake.  The loan was cofinanced with private financial institutions (agent bank: Mizuho Corporate Bank; Bank of Tokyo-Mitsubishi; and Sumitomo Mitsui Banking Corporation (SMBC)).
     
  2. This loan will finance the development of the Kashagan offshore oil field in the Kazakhstan-controlled area of the North Caspian Sea.  The oil field is being developed by an international consortium formed by seven companies in six countries, including the Company and ENI S.p.A in Italy.  
     
  3. The Kashagan oil field has huge oil reserves and is reportedly the largest oil field discovered in the world in the past 30 years.  Since acquiring a participatory interest in the North Caspian Sea Block in September 1998, the Company has participated in developing the oil field as a member of the international consortium.  Oil production will begin in 2008, and after phased development its output is eventually expected to reach a peak volume of 1.2 million barrels a day.  Currently, the consortium is considering transporting crude oil produced in this oil field through the Baku-Tbilisi-Ceyhan (BTC) pipeline (which is being constructed with the participation of Japanese companies), in addition to the existing oil transport network.  The Company is aiming to import to Japan a volume of crude oil proportionate to its share of the interest (8.33%) through swaps.  
     
  4. The Caspian Sea embraces large-scale oil fields including the Kashagan and Azeri-Chirag-Gunashli (ACG) oil fields.  As the BTC pipeline, which will enable Caspian oil to be transported to the Mediterranean, is coming close to completion, these oil fields are attracting global attention.  JBIC has supported the BTC pipeline construction and ACG oil field development projects by providing loans totaling approximately US$2 billion to date.  Following these previous loans, the new loan will serve to diversify energy supply sources for Japan, which is heavily dependent on the Middle East for its oil, as part of JBIC's multi-faceted support for energy resource development in the region.
     
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