Japan plans to sign an agreement with Saudi Arabia next month to facilitate Japanese investment in the Kingdom to help secure overseas energy resources at lower costs, Kyodo reported citing a Japanese government source said.
The plan will coincide with Prime Minister Shinzo Abe's visit to Saudi Arabia in early May and comes as Japan struggles to cover the loss of nuclear energy following the Fukushima disaster, the news report said.
Under the accord, Saudi Arabia is to give Japan most-favored-nation status, benefiting energy-resource and other Japanese companies operating in the country.
For its part, Tokyo will allow Saudi firms to operate more smoothly in Japan.
Each government will back business activities with deregulation and other steps, while setting some rules, including on intellectual property rights protection.
Abe will also promote Japanese exports of infrastructure, including medical and railway systems, Kyodo added.
The agreement will help Japan secure resources at cheaper costs, the source told Kyodo.
Japanese utilities have increasingly sought fossil fuels to increase thermal power generation.
Increasing expenses for fuel imports, particularly liquefied natural gas, have put pressure on their earnings and the trade balance. The weakening yen is worsening the situation.
Saudi Arabia is the biggest provider of crude oil to Japan, accounting for 30 percent of its total imports in 2011.
Abe will also visit Russia, the UAE and Turkey during his trip starting April 28.
He will be accompanied by a number of business leaders.
Reproduced with permission from Arab News