Inpex Corp, Japan's top oil developer, said yesterday it is considering lifting its stake in Russia's Sakhalin-1 oil and gas project as part of its effort to increase muscle in the global fight for energy resources.

Inpex, which is 36 per cent state-owned, said it may raise its stake in the massive oil and gas project to 10 per cent from the current 1 per cent by buying additional shares in Jap-anese consortium Sodeco from the Japanese government.

Sodeco, half-owned by the Japanese government and half by private firms, has a 30 per cent stake in the Sakhalin-1 project. Inpex is considering upping its stake in Sodeco to 33 per cent from 4 per cent, giving it 10 per cent of the overall project.

"This is a part of our strategy to expand upstream assets," said an Inpex spokesman.

Inpex said last week it would take over Japanese rival Teikoku Oil Corp, and its chairman said at a news conference that it planned further acquisitions to make it globally competitive.

Teikoku also holds a 1.4 per cent stake in Sodeco. Japan Petroleum Exploration Co (Japex) holds 14 per cent and trading houses Itochu Corp and Marubeni Corp also own Sodeco stakes, a Sodeco spokesman said.

The Sakhalin-1 project is one of the largest single foreign investments ever made in Russia, and about $12.8 billion is expected to be committed to developing the three fields over a lifetime spanning about 40 years.

US oil major ExxonMobil Corp is the operator of the project and holds a 30 per cent stake. India's state-run Oil and Natural Gas Corp. Ltd owns 20 per cent.

The Sakhalin-1 oil and gas field started pumping oil off Russia's Pacific Coast from October 1. Initial production from Sakhalin-1, which will rise to about 50,000 barrels a day by year end, is currently sold on the Russian domestic market.

Output from the Chayvo field is expected to rise to full capacity of 250,000 barrels per day by the end of 2006 when a pipeline linking the island to an export terminal in the Russian mainland sea port of Dekastri will also allow shipments to international markets, including Japan.

"Exports would start from the middle of next year (2006). We have not decided on buyers yet, but it (oil from Sakhalin-1) would come to Japan, considering the geographical advantage," said the Sodeco spokesman.

The crude supply from Sakhalin-1 would help Japan to diversify its crude imports.

The world's third biggest oil consumer relies on the Middle East for most of its crude oil needs.

Sakhalin lies off Russia's Pacific coast and is just north of Japan, which occupied half of the island from 1905-1945.

Gas production from the field starting at about 1.7 million cubic metres a day and later rising to 7.1 million, will also at first be sold only to Russian consumers in the mainland Khabarovsk region bordering China.

Sodeco, working in partnership with the Soviet government, discovered oil off Sakhalin in the 1970s, but an agreement to develop the resources was not concluded until the mid-1990s, when Exxon joined the venture.

Inpex's shares were up 0.95 per cent at 853,000 yen in early afternoon trading, compared with a 0.59 per cent rise in the benchmark Nikkei share average.