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Japanese oil supply move could boost tanker trades

Tokyo: A significant boost in tanker tonne miles could be a welcome outfall of a 15-year $3.5bn oil deal just signed by Japanese interests and Venezuela's PDVSA. The contract provides for the Japan Bank for International Cooperation to provide funds for Marubeni Corp and Mitsui and Co to assist in fresh oil exploration and development in Venezuela. Japan would have first rights over any new oil discoveries. In the meantime, Venezuela will repay the loan by way of oil and gas supplies to the trading houses.

The deal comes at a time when Japan is urgently seeking to diversify its dependence on Middle Eastern supplies but is also seen as a key business opportunity for the Japanese trading houses. Significantly, the timing of the contract comes as international concern over Iran's nuclear intentions continues to mount. In 2004, Japan made a substantial commitment to help the Islamic state develop its largest onshore oil field but has been distancing itself from this involvement in recent months.

A new long-haul trade in crude oil between Venezuela and Japan, which could amount to 20,000 b/d according to reports, could provide a useful new source of employment for tanker owners as they seek to deploy record volumes of new tonnage in the months ahead. According to Clarkson, there are more than 1550 tankers over 10,000 dwt on the orderbook, equivalent to almost 37% of the existing tanker fleet today.  [27/02/07]

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