4 May 2007 - 17:33
  • News Code: 103799

TOKYO - The past week has seen an unprecedented flurry of top-level Japanese diplomacy aimed at ensuring the resource-poor nation"s energy security through stable supplies of oil and other resources.

Japan specifically proposed accepting Saudi experts for training programs in Japan for oil exploration and development technologies. Japan also proposed helping Saudi Arabia develop expertise in the field of trade and investment, as well as extending financial support for the development of Saudi infrastructure.


In Abu Dhabi, Abe met with UAE President Khalifa bin Zayed Al Nahyan. The two agreed to launch a ministerial "Japan-UAE Joint Economic Committee" to promote bilateral economic relations, particularly in the investment, business-environment and energy fields. The UAE is Japan"s second-largest oil supplier.


Kuwaiti leaders expressed to Abe their desire to start negotiations on promotion and mutual protection of investments between the two countries.


In Doha, Abe and Qatari leaders agreed to launch preparatory talks for negotiations on a bilateral investment treaty. Qatar is Japan"s fourth-biggest oil supplier, after Saudi Arabia, the UAE and Iran. Qatar is also Japan"s fourth-largest LNG supplier after Indonesia, Malaysia and Australia.


Saudi Arabia, the UAE and Iran remained Japan"s three biggest oil suppliers in 2006. Saudi Arabia shipped 458 million barrels, or 30.0% of Japan"s import total. The UAE shipped 387 million barrels, 25.4% of Japan"s import total. Iran came third, exporting 176 million barrels, 11.5% of the total.


But Japan"s oil imports from Iran plummeted 16.9% in 2006 from the previous year amid growing international tensions over the Persian Gulf nation"s nuclear programs. If this declining trend continues, Iran will very likely cede third position as Japan"s oil supplier to Qatar this year. Qatar shipped 156 million barrels to Japan in last year, 10.2% of the country"s import total.


Japan agreed last autumn to give up its controlling interest in the US$2 billion development of Iran"s massive Azadegan oilfield amid tensions over Tehran"s nuclear program. Inpex Holdings Inc, Japan"s leading energy developer fully backed by the government, reduced its stake in the southwestern oilfield from 75% to 10%.


Flush with oil money amid high prices for the fuel, the economies of oil-producing countries in the Middle East are booming. Japan"s exports of steel and general machinery to those countries are on the rise, reflecting strong capital investments there. While Japanese energy companies want to secure stable supplies from the region, other companies, including financial institutions, are eager to cash in on the booming economies and oil money.


For their part, the GCC nations want to see a further inflow of Japanese investment and cutting-edge technology, not only into the oil sector but also in a wide range of other sectors, especially manufacturing, to help them reduce their heavy dependence on oil and increase employment opportunities for the swelling population.


Meanwhile, the government-affiliated Japan Bank for International Cooperation (JBIC) signed an agreement with the UAE"s Abu Dhabi National Oil Co (ADNOC), which is wholly owned by the Abu Dhabi government, on Sunday to establish a comprehensive and strategic partnership.


JBIC is expected to lend $1 billion to ADNOC by the end of this year and several more billion dollars later to help the Persian Gulf nation boost crude-oil production and the economy in exchange for securing stable oil supplies. JBIC also signed a strategic partnership agreement with the Dubai government on Monday to help build Dubai"s infrastructure and improve the business environment for Japanese firms. Dubai, one of the seven emirates that make up the UAE, is the financial and commercial hub of the Middle East.


Japan"s higher political profile

To be sure, oil topped Abe"s agenda during his Middle East tour. But he also apparently wanted to raise Japan"s political profile in the region. Abe and Middle East leaders discussed Iraq, the Israeli-Palestinian conflict, Iran and Lebanon, as well as bilateral economic cooperation.


Japan has been one of the staunchest supporters of the United States in the war in Iraq. Although Japan withdrew its ground troops from Iraq last summer, its airmen are still flying supplies and personnel between Kuwait and Iraq. Japan also has dispatched Maritime Self-Defense Force (SDF) vessels to the Indian Ocean to refuel US and other coalition ships as part of efforts to assist anti-terrorism operations in Afghanistan.


At a port in Abu Dhabi on Sunday, Abe addressed members of the Maritime SDF. Aboard the docked refueling ship Hamana, he told the crew he hopes they will help "write a new chapter for Japan on the front lines of international contribution", referring to the recent upgrading of SDF overseas activities into one of its primary duties from previous secondary status. "Your activities are highly appreciated internationally. I hope that you will proudly accomplish the mission and return to Japan in good shape," he said.


In Kuwait, Abe met with about 200 members of the air force unit stationed at Ali Al Salem Air Base in a show of support for their airlift mission between Kuwait and Iraq. Referring to deteriorating security and living conditions in Iraq, Abe said, "In whatever circumstances, I am confident that you will continue to make a major contribution to the reconstruction of Iraq as the representatives of Japan with the support you provide to the United Nations and multinational forces."


In their separate joint statements with Abe, most of the Middle East leaders, including Egyptian President Hosni Mubarak, expressed their appreciation for Japan"s "contributions for the reconstruction and stability of Iraq". Some of the statements specifically cite either Japan"s provision of economic aid or its sponsoring of a seminar on national reconciliation, attended by influential Iraqi figures, in Tokyo in March. But no statement directly referred to Japan"s dispatch of SDF troops.


On Wednesday, Abe met with Mubarak on the last leg of his five-nation Middle East tour. The two leaders reaffirmed their cooperation in promoting peace in the Middle East and in dealing with issues related to Iraq and Iran. Abe was quoted as telling Mubarak that he wants to strengthen Japan"s partnership with Egypt, as Japan regards the country as playing a key role, especially in the Middle East as a peace broker.


Meanwhile, ministers from the Middle East and other international powers began to meet in the Egyptian resort of Sharm al-Sheikh on Thursday for two days of talks to discuss Iraq"s security. Japanese Foreign Minister Taro Aso was to attend the conference on Friday.


Intensifying race for uranium


On his visit to Central Asia, Economy, Trade and Industry Minister Amari stressed the need to diversify Japan"s sources of uranium in an increasingly competitive market. He and Kazakh Prime Minister Karim Masimov issued a joint statement aimed at boosting bilateral civilian nuclear cooperation and the Central Asian nation"s uranium supplies to Japan.


"It declares that the two nations are mutually beneficial strategic partners in the nuclear field,"" Amari said at the signing ceremony.


"The two countries" cooperative ties will make big progress,"" Masimov said at the same ceremony. They also confirmed that negotiations will begin for a nuclear-cooperation agreement to ensure smooth exchanges of nuclear technology and materials.


Meanwhile, top executives from 29 Japanese companies accompanying Amari signed 24 business deals with Kazakh firms to help ensure stable uranium supplies to Japan in the long term and facilitate the transfer of civilian nuclear technology to Kazakhstan. Kazakhstan has the world"s second-largest uranium reserves after Australia. But at present, the Central Asian nation supplies only 1% of Japan"s uranium imports. Australia and Canada supply 33% and 27%, respectively. As a result of the deals signed this week, Kazakhstan"s share of Japan"s uranium imports is expected to jump to 30-40% in the future.


Among the 24 deals, Marubeni Corp, Tokyo Electronic Power Co and Chubu Electric Power Co agreed with Kazakh state-run atomic company Kazatomprom to develop jointly the Kharassan uranium mine in southern Kazakhstan. Itochu Corp signed a contract for a long-term supply of uranium concentrate from Kazakhstan.


Toshiba Corp agreed with Kazatomprom to help build nuclear power plants. The Japanese side also agreed to provide Kazakhstan with technological assistance for processing uranium fuel and building light-water reactors in exchange for uranium supplies.


Before Kazakhstan, Amari visited Uzbekistan, where he agreed with Prime Minister Shavkat Mirziyoyev that Japan and Uzbekistan will strengthen cooperation in exploring and developing oil, natural gas, uranium and other mineral resources in the Central Asian republic in exchange for Japan"s support in improving that country"s investment climate. Uzbekistan"s uranium reserves are the 10th-largest in the world.



News Code 103799

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