JOGMEC is effectively an arm of Japan's Ministry of Economy, Trade and Industry. The new rules will allow the ministry to use the state-owned enterprise to complete a proposed deal and invest around $10 billion in Rosneft, if it chooses. This proposal has been in the works for a several months, held up in part by the previous limitations on JOGMEC. Heretofore, Tokyo has had the ability to make strategic investments in national oil companies only by using its bureaucracy to push private companies like Inpex to do so. This new power puts Japan on a more competitive footing vis a vis regional rivals such as China. And Rosneft could be the first of many strategic investments — with a later target possibly including Saudi Aramco.

Russian President Vladimir Putin will visit Japan in December, and the Diet is pushing for other policies before then. Liberal Democratic Party and Komeito lawmakers are seeking approval of a feasibility study on a 25 billion-cubic-meter natural gas pipeline from Russia. This pipeline would mark a significant change in the structure of the Asian natural gas markets currently dominated by liquefied natural gas — with Japan being the world's top LNG importer.

Rosneft is in the process of being privatized, and 19.7 percent of shares sold by the state will be purchased by a Rosneft subsidiary, keeping them in-house. However, the deal has been controversial: Putin does not want to see Rosneft gain any more autonomy or cede more power to its chief, Igor Sechin. So the Kremlin is still interested in privatizing either the initial stake or some sort of stake this next year, with Putin lobbying a string of firms. The option of Japan buying a piece of Rosneft would be attractive to both Sechin and Putin — a rare alignment. 

Sechin has unsuccessfully lobbied the Chinese to take a share in Rosneft, but Japan would be a good alternative, as it could open the door to future partnerships. Russia is already attempting to shift its natural gas supplies to customers in greater East Asia. Deals so far have focused on China, and Russia would like to balance those with a large supply deal in Japan.

For Putin, a lucrative deal with Japan over Rosneft could be a component of an overall grand bargain with Tokyo. The two countries are still in a standoff over a World War II peace treaty and a territorial dispute over the Kuril Islands. Momentum has built this past year for an actual deal, and large investment and energy deals are a key part of Moscow and Tokyo finally establishing warm relations.