May 12, 2009 / 3:29 AM / 11 years ago

Russia, Japan seek to bolster economic ties

* Russia, Japan set to sign nuclear power deal

* Putin to promote business, no progress seen on islands spat

By Oleg Shchedrov and Chisa Fujioka

TOKYO, May 12 (Reuters) - Russia and Japan are set to sign a parcel of agreements on Tuesday including oil and nuclear energy deals as they stress business ties over a long-running dispute over some offshore islands.

Russian Prime Minister Vladimir Putin, travelling in Tokyo with 100 company executives, will attend a business forum and later meet Japanese Prime Minister Taro Aso for talks on boosting trade and investment.

Despite the territorial row, which has prevented the two sides from signing a peace treaty for World War Two, economic ties have flourished as Japan eyes Russia’s growing consumer market and its booming oil and gas industries. [ID:nT248673]

Russia, facing a recession after a decade-long boom, is also eager for Japanese investment to develop its Far East region.

“Regional cooperation is an important factor which can stimulate economic development, help overcome the consequences of the global economic crisis,” Putin told a meeting of regional governors from both countries.

“Deepening direct regional cooperation will help to create a favourable atmosphere for joint projects ... create new jobs, which is especially important now.”

In a sign of growing business ties, the state-run Japan Oil, Gas and Metals National Corp (JOGMEC) said in a statement it would sign an agreement with Irkutsk Oil Co to jointly develop two oil fields in Eastern Siberia through a joint venture.

The project, the latest in Japan’s efforts to reduce its reliance on the Middle East for its oil needs, will cost 15 billion yen ($152.6 million) to bring it to commercial production alone, the Nikkei business newspaper reported.

Japan and Russia are also expected to sign an agreement on civilian nuclear energy use in a deal that would clear the way for Japanese companies to help build nuclear power plants in Russia.

The agreement would also allow Japan to tap Russia’s uranium enrichment technology.

While both countries have extolled the mutual benefits of stronger economic ties, little progress was expected on a dispute over a group of small islands, known in Russia as the Southern Kuriles and in Japan as the Northern Territories.

Neither Japan nor Russia accepts the other’s claim of sovereignty over the sparsely populated islands, the closest of which is 15 km (10 miles) from Japan’s northernmost island of Hokkaido. ($1=98.30 Yen) (Editing by Michael Watson)

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