Japan and China, both big guzzlers of oil imports, have been sparring behind the scenes over oil development projects in eastern Siberia.
China is trying to secure oil not only from the Middle East and Africa but also from eastern Siberia — where Japan has its eye on becoming a major supplier.
The International Energy Agency predicts that China’s oil imports, now totaling slightly less than 2 million barrels a day, will jump to about five times that in 2030.
Japan, the world’s second-largest oil importer, is on a mission to diversify its sources. Almost 90 percent of its supply comes from the Middle East.
The competition surfaced in May, when Russia’s oil giant Yukos signed a 25-year deal with China National Petroleum Corp. to supply oil through a 2,400-km pipeline from Angarsk, eastern Siberia, to Daqing beginning 2005.
The signing took place during a visit to Russia by Chinese President Hu Jintao.
But in June, Japan sent former Prime Minister Yoshiro Mori, Foreign Minister Yoriko Kawaguchi and other officials to Russia to urge Moscow to cooperate with Japan in building a 3,700-km pipeline from Angarsk to Nakhodka.
High-ranking Russian officials, including Konstantin Pulikovskii, a close aide to President Vladimir Putin who is in charge of the Russian Far East, backed Japan on the issue.
Tsutomu Toichi, executive director of the Japan Energy Economy Research Institute, said the Japanese plan has an advantage because it can diversify oil export destinations from Nakhodka to the United States, South Korea and Taiwan by sea.
A month after the visit by the Japanese delegation, Yukos came under scrutiny from Russian law-enforcement authorities, who began investigating the oil giant on charges of embezzlement and tax evasion. Its major shareholders were arrested. Yukos has been promoting the China route.
The president of Yukos, Mikhail Khodorkovsky, has been providing political donations to the Yabloko opposition party and an alliance of rightists. Members of the Putin administration are reportedly behind the investigations. It is unclear if the probe will affect the deal with China.
Khodorkovsky, regarded as Russia’s top billionaire, and leaders of other firms are said to have purchased state-run enterprises from the Soviet Union era at cheap prices through unfair methods.
“The purchases are tantamount to the looting of state assets,” an oil industry source said.
Yukos is expected to become the fourth-biggest oil major in the world after it merges with Sibneft, another Russian oil company.
Japan and China are also squaring off to develop the Azadegan oil field in southwest Iran.
If Japan suspends its development plans there in response to opposition from the administration of U.S. President George W. Bush, China will certainly use the opportunity to advance into Iran, sources said.
“The Bush administration is urging Japan to secure oil from eastern Siberia instead from Iran,” a Japanese oil industry source said.
The cost of the project in Iran is estimated at nearly 1 trillion yen, but no feasibility study has been conducted yet.
A Russian government source said that although the Japanese government is eager to get the eastern Siberian project, the Japanese industry is not.
But Putin will be the one who makes the decision in the end, the source added.
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