Source Pravda.Ru

Is Bargaining to the Point?

Bargaining is always right to the point when oil is at stake
Japanese Prime Minister Junichiro Koizumi has started his official visit to Russia, which is certainly an important event for the politics of both countries. Almost all of the Russian news agencies inform that the Japanese prime minister will bring an exciting news to Russia: Japan is ready to buy up to 1 million barrels of Russian oil per day.

This information is certainly very pleasant for Moscow, as it is known perfectly well that oil is the basic component of Russia’s export. Especially that the prospective client is one of the world’s most economically developed countries (it also means that it is one of the richest countries as well).

However, there are still apprehensions that Japan’s intention to buy Russian oil will end the same way as the story about America’s intention to buy Russian oil: there are still no results of this intention. In fact, the situation with Japan is quite different: China long ago evinced its great interest in the Siberian oil fields. PRAVDA.Ru already reported about Japan’s intention to invest billions of dollars in construction of an Angarsk-Nakhodka oil pipeline. Russian state-run company Transneft supports the route suggested by Japan. At the same time, the Russian oil company Yukos is actively lobbying a different route of the pipeline which would go from the Russian city of Angarsk to the Chinese port of Datsin. The situation is very serious as only one pipeline can be constructed (the oil reserves in the region won’t be enough for two pipelines at once).

It is quite natural that the variant suggested by Yukos is disagreeable for both, Japan and South Korea; indeed, if the oil pipeline goes from Angarsk to Datsin, China will get a too big advantage over the others. This fact only intensifies the struggle concerning the route of the pipeline. Yukos is on the one hand, Transneft and Japan with the intention to buy up to 1 million of barrels per day – are on the other hand. Who will win? The answer seems to be evident. However, it is not yet clear what China is going to offer, if it is going to offer anything at all (China has already concluded a contract for oil supplies with the former Soviet republic of Kazakhstan). At the same time, relations between Russia and Japan are negatively affected by Tokyo’s claims to four of the South Kurile Islands.

On the whole, Koizumi’s visit to Russia is a convenient opportunity to win some concessions from Japan concerning the problem of the islands. At least, there is a chance to persuade Japan that it is unreasonable to mix economic cooperation with the territorial dispute. Certainly, if anything of this kind is to be done during the visit of Japan’s prime minister to Russia, nothing will be officially reported, as the problem is actually very delicate.

To tell the truth, Japan hasn’t got much to choose from. It may once again declare that “peace will be possible only in exchange for the territories.” If it does, it is not ruled out that Russian oil will go to China’s Datsin. Is it worth the four tiny islands?

Vasily Bubnov PRAVDA.Ru

Translated by Maria Gousseva

Read the original in Russian: http://world.pravda.ru/world/2003/5/15/42/5285_torg.html

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