Japan National Oil Corp. said Monday it will invest in and grant a liability guarantee to affiliate Inpex Southwest Caspian Sea Ltd. to finance an oil development project in Azerbaijan.
Inpex Corp., an oil developer 50 percent owned by JNOC, and Inpex Southwest Caspian Sea agreed in December with Russian oil company Lukoil to buy Lukoil's entire 10 percent interest in the Azeri-Chirag-deepwater Gunashli project, JNOC said.
The first phase of field development in central Azeri has begun, and the area is expected to start producing oil in early 2005.
The development of western and eastern parts of the Azeri field, as part of the second phase, has also started. Oil production in the second phase is planned to begin in spring 2006.
JNOC said it will provide the company with capital to cover part of the acquisition costs. It will also grant a liability guarantee to cover that part of the acquisition cost as well as the first and second phases of the development.
JNOC's announcement follows Monday's completion of the transaction to purchase Lukoil's interest.