Japan Finding It Hard to Tap Africa for Oil, Gas
TOKYO Oct. 4, 2007 (Dow Jones Newswires)
Japan's government has sent delegations to African countries such as Angola and Madagascar in search of opportunities for exploration, development and production of oil and natural gas as part of efforts to increase its energy stakes while diversifying its sources of energy supplies.
But getting into the upstream businesses there seems mostly difficult due to intensifying competition with other countries, especially China, said a senior official at Japan's Ministry of Economy, Trade and Industry.
"I went to Angola in early September to gauge possibilities of getting into the upstream businesses," said Shin Hosaka, director of the petroleum and natural gas division for the Agency for Natural Resources and Energy, a unit of METI.
But "it seems hard to make room for us, as there are a lot of people coming from across the world...and Angola has set high conditions," Hosaka added.
METI's delegation met with the country's industry minister, Joaquim David, and senior officials at state-owned oil company Sonangol, said Hosaka.
Angola is the second-largest crude oil exporter to China, the world's most populous nation, and China has been engaged in oil business there on very favorable terms for the African country, he noted, adding that he found the conditions difficult to accept for Japanese companies.
He didn't elaborate, but admitted this is a seller's market.
Nevertheless, METI will notify Japanese oil companies of Angola's tender for blocks scheduled in December, Hosaka said.
Resource-poor Japan imports nearly all of its energy needs. The country imported 4.25 million barrels a day of crude oil in 2006, with roughly 90% coming from the Middle East. Angola accounted for less than 1%, according to data from METI.
To reduce its heavy dependence on foreign oil, especially from the Middle East, METI set a target last year of increasing crude imports from projects fully or partially owned by Japanese companies to 40% of all oil imports by 2030 from the current 15%.
Angola, the Organization of Petroleum Exporting Countries' newest member, currently produces about 1.7 million barrels a day of crude.
China imported 3.33 million barrels a day of crude oil in the January-August period, with 14% coming from Angola, data from China's General Administration of Customs showed.
METI has sent delegations to some African energy producing countries in recent years such as Madagascar, Mauritania and Niger, but the situation has largely been similar with Angola, according to Hosaka.
"There are some countries that seem a little more accessible like Equatorial Guinea and Mauritania," but there have been no talks so far of concrete plans, said Hosaka.
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