Japan's Jogmec to Subsidize Australian Oil, Gas Exploration

TOKYO (Dow Jones Newswires), August 19, 2008

Japan Oil, Gas and Metals National Corp. said Monday it will invest about Y682 million in Australia-East Timor offshore oil and natural gas exploration work over the years through March 2014.

The investment is part of the Japanese government's policy of subsidizing overseas energy exploration projects involving Japanese companies, using the government-backed body, better known as Jogmec, as a vehicle.

Cosmo Oil Co.'s affiliate Cosmo Oil Ashmore Ltd. and OMV AG's unit OMV Timor Sea Pty. each have a 35% stake in the exploration project, while Nippon Oil Corp.'s unit Nippon Oil Exploration (Australia) Pty. holds the remainder, Jogmec said in a statement. The operator is OMV Timor Sea.

The Y682 million investment is equivalent to more than half of the estimated exploration costs of Cosmo Oil Ashmore.

Cosmo Oil Ashmore and OMV Timor Sea have already confirmed two oil reserves in the Australia's northwestern AC/P17, AC/RL5 and AC/RL6 blocks. Together with Nippon Oil Exploration (Australia), the three partners will explore for additional reserves, according to the statement.

Upon any discovery of new reserves, the three partners would work for commercial production of crude oil from all reserves starting as early as 2012.

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