HE WORLD'S MOST OIL HUNGRY ECONOMY

If you ask any Japanese businessman what single question haunts him most, he will probably reply 'Oil'.

For one of the contradictions of the world's third most powerful economiesafter the US and the USSR— is that it has stockpiles of oil for only 45 days. And because oil provides 70 per cent of the nation's energy, the result of an oil stoppage would be clearly catastrophic. The country's massive industry would be forced to a standstill in six weeks.

Whereas the US and the USSR have their own oil resources and access to politically amenable sources of supply, the Japanese, the third largest oil consumers in world, have to rely exclusively on imports.

In 1971 Japan depended on imports from the Middle ta IUr 84.1 per cent OI ine annual total, though Middle Eastern crude oil accounted for only 46 per cent of imports in 1950. To lubricate these supply lines the Japanese government is engaged in an impressive campaign to make friends with the oil sheikhs.

Oni Minister after another is seen on Japanese television tumbling off aircraft to greet cloaked sultans hiding behind sun glasses. There was even a rumour that the holy holies, Emperor Hirohito. would comport himself to the Middle East as part of this goodwill seasoning.

But along with the bowing Ministers has gone a good deal of hard cash. As the Keidanren, the Japanese CBI, says its economic review for 1973:

'There is a rising inclination to go a step further than the past practice of mereiy depending on imports, and to participate positively in petroleum development proects in various parts of the One such scheme is the Iran Japan Petrochemical Company (IJPC) capitalized, at $50m. The project involves the construction of a giant petrochemical plant in Iran. The Japanese equity is being put up by Mitsui and Company Limited, Toyo Soda, Mitsui Toatsu Chemical, Mitsui Petrochemical and lapan Synthetic Rubber.

There have been other • recent examples of the Japanese intervention in the • In early January the japanese oil industry bought 22.5 per cent interest in British Petroleum's (BP) rich offshore held in Abu Dhabi, payıng a staggering $780m, about twice as much as the previous bidder. @ In April a delegation from the Japanese Petroleum Development Corporation visited Saudi Arabia and offered a $500m deal under which the Mitsubishi conglomerate would build a huge petrochemical complex in return for 200 million barrels of crude oil over an extended period. • In mid-February, Japan Line startled the oil world by agreeing to pay $2.38 per barrel for top quality Abu Dhabi oil, considerably higher than the price western oil companies had just agreed to pay the Abu Dhabi regime. In the same deal Japan Line tied up 730 million barrels of crude oil over eight years-most of Abu Dhabi's output over the next few vears.

In May the first Abu Dhabi cil was discharged in Japan from the 160,000-ton 'English Bridge. The Tokyo Press boasted: 'This is the first-ever shipment made by any oii exporting naton without intermediary of a western oil concern. Japan Line, the nation's biggest oil tanker operator, outbid major western petroleum importers the direct purchase.

These deals indicate that the Japanese are preparing to 'go it alone' in the Middle East oil race.

During a visit to Tehran in April, International Trade and Industry Minister Yasuhiro Nakasone made clear that Japan would not join a consortium of oil-consuming countries. He told Iran's Finance Minister Jamshid Amouzegar that Japan would help the country's five-year development plan. In return Iran would continue oil supplies 'on a stable basis'. (About 40 per cent of Japan's oil consumption comes from Iran.) Japan's unilateral dealing with the leading member of OPEC, the Organization of Petroleum Exporting Councries, has caused an outcry trom the US cil 'maiors'.

The Washingter Post' said recenty: •Ur.25s SCIe Proact is densed, the likeihood is an ali-out scramble for Middle-East oil resulting in the doubling and redoubling of prices in coming years.' The State Department's top energy planner, Mr James Akins, went further: 'The bidding is already starting.' When asked why they refused to join a US-sponsored oil consumers' summit to protect their common interests, a spokesman for Keidanren said:

'All the blame is being put on us. We are not the only people causing a disturbance. While the Americans talk of multilateral plans. they are trying to grab the market tor themselves. What we have done is self-protection.' While launching ioint schenies in the Middle East. Japanese big business is stepping up its search for oil in south-east Asia to a1m05t frantic proportions.

The alotmer: of expina" ca licences has been a irresponsible and corrupt business. Whole chunks of land and sea have been carved up among the highest bidders with Japan, fighting for its economic survival, willing to pay almost any price to search for the liquid gold. tons of liquified natural each year.

Five major Japanese firms have expressed interest in joint participation with the oil company in a development project to get the gas from the ground, pipeline it, process it and carry it by special tankers to Japan.

The fleet of tankers alone 1s expected to cost 5975m.

The country's oil production is currently at 1.2 million barrels a day-most of it going to the fiercely competitive Japanese. Sales are expected to soar over the $1.000m mark by the end of this year.

There are 48 oil companies looking for oi and gas throughout the archipeligo. This search has already cost $720m and i expected to consume a further S500m the пехт couple of years. Ike ci hunt is rot without costly failures. Mobil recent'y su.rendered 1.1 million acres in the Strait of Malacca after drilling a number of dry wells. to 12 million barrels a day.

As for Japan, which imorts all but a fractior of the 4.2 millior barrels day it consumes, the south-east Asian discoveries have meant only fractionle East. less reliance °" For example, almost 90 per the Middle cent of oil imports came from the Middle East five years ago,