government sources have confirmed that recent meetings between the
Japanese minister of trade and industry and Saudi leaders were aimed
at regaining the Arabian Oil Company’s drilling concession in the
Al-Khafji oil field.
sources said Riyadh was unable to understand Japan’s official denial
of its attempts to win back the concession despite the Japanese oil
company’s attempt and failure to reach a deal with the Saudis last
concession on the Saudi side of the Neutral Zone between the Kingdom
and Kuwait was AOC’s largest in the world.
It supplied more than four percent of Japan’s oil
requirements. The Al-Khafji field was taken over by Saudi Aramco after
talks of renewing the concession failed.
month, Japanese Trade and Industry Minister Takeo Hiranuma held talks
with Custodian of the Two Holy Mosques King Fahd, Prince Sultan,
second deputy premier and minister of defense and aviation, Planning
Minister Khaled Al-Gosaibi, then the acting petroleum and mineral
resources minister, and Commerce Minister Osama Jaafar Faqeeh.
is not the first time Japan has tried to regain the oil drilling
concession. It earlier failed to reach a deal with the ministerial
committee, chaired by Foreign Minister Prince Saud Al-Faisal, charged
with holding negotiations with international oil giants on gas
sources, however, pointed out during the new talks that Japan was not
ready to back down from the stands that resulted in its losing the
concession in the first place.
The sources added,
“It is now trying to revive the oil talks at political levels
but that will not work due to the difference in the Kingdom’s
economic situation when AOC won the concession 40 years ago and the
Arabia does not oppose Japanese investment in any of the Kingdom’s
economic sectors. “But it totally refuses to accept exploitation of
its natural resources without any recompense,” the sources said,
adding that Japan had entered the talks without differentiating
between the Kingdom’s past and present economic capabilities.
sources continued: “They thought the Saudi demands were just a
maneuver which could be overcome easily and then get the concession
renewed. Now time has proved that they were wrong in their
latest initiative was prompted by a proposal from the Japanese
Economic and Social Reform Committee set up by Prime Minister
Junichiro Koizumi. The proposal called for fresh efforts to regain oil
concessions in the Gulf to shore up the country’s economy.
Japanese move to promote investment in Saudi, Kuwaiti and Iranian oil
fields in cooperation with such international companies as Royal
DutchShell, they said, was aimed at offsetting the energy shortage the
country has recently experienced. The shortage caused industrial
output to fall by four percent, increased the unemployment rate by
five percent and reduced prices of consumer products by 6.2 percent.
Saudi-Japanese talks to renew AOC’s concession failed in February
last year when Tokyo rejected the Kingdom’s conditions. During the
talks, Saudi Arabia proposed Japanese investment in petrochemical
projects in Al-Khafji but Japan rejected the offer. The Kingdom also
demanded that Japan increase purchases of Saudi oil to 1.5 million
barrels per day and invest in a $2.1 billion railway project.
the failure of the talks, Japan maintains its position as the
Kingdom’s second largest trading partner in terms of trade volume.
In 1999 bilateral trade amounted to SR38.5 billion with the balance
heavily in favor of Saudi Arabia. There are 37 joint ventures between
the two countries — 10 of them in industry and 27 in non-industry
sectors; there is a total capital investment of SR18.32 billion.
Investment in joint ventures is 52.98 percent Saudi and 46.52 percent
Source: Arab News©