Mitsubishi, Shell and three other oil firms will spend 700 billion to 800 billion yen ($9 billion to $10.3 billion) to jointly develop a large-scale natural gas project in Brunei, according to reports.
The partners, which include Malaysia's Petronas, Murphy Oil and ConcocoPhillips, will spend 70 billion yen to drill seven test wells over the next two to three years to determine the size of the reserves, Japan's Nikkei business daily reported on Friday.
Previous appraisals put the reserves at a few trillion to around 12 trillion cubic feet, making it viable for commercialisation, Reuters quoted the daily as saying.
Development on the project will start in 2013, with production to kick off the following year, the paper said.
The Japanese trading house will shoulder up to 50 billion yen of the total development costs, Reuters reported.
The project is expected to produce 500,000 barrels of oil per day and 4 million tons of LNG per year at its peak, representing roughly 6% of Japan's total LNG needs, according to the Nikkei report.
Mitsubishi holds a 6.25% interest in the 5000 square kilometre offshore natural gas block, while Petronas is the largest stakeholder with a 45% interest.
Shell owns 12.5%, Murphy has a 30% stake and ConcocoPhillips' share is 6.25%, Nikkei said.
Mitsubishi plans to export natural gas from the new field to Japan and may build another liquefaction plant in Brunei, Reuters quoted Nikkei as saying.
