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UNCLAS SECTION 01 OF 12 TOKYO 001532 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 07/06/09 
 
INDEX: 
 
(1) Poll: Aso cabinet, political parties (Asahi) 
 
(2) Poll on Aso cabinet, political parties (Nikkei) 
 
(3) LDP not making progress in manifesto drafting (Asahi) 
 
(4) DPJ President Hatoyama's donation issue to become new source of 
trouble; Ruling camp demands Hatoyama's Diet testimony (Asahi) 
 
(5) Russia to put off concrete proposals on Northern Territories at 
bilateral summit, reacting to Japan's claim of "inherent part of our 
territory" (Sankei) 
 
(6) U.S. political conflict over continued production of F-22; 
Selection of next-generation mainstay fighter in deep disarray; 
Domestic defense industry struggling (Nikkei) 
 
(7) Japan likely to acquire rights to develop oil fields in southern 
Iraq (Sankei) 
 
(8) Iraq's auction of rights to develop oil, gas fields exposes gaps 
in intents between foreign firms and Tehran (Nikkei) 
 
(9) Negotiations with Iraq to secure right to oil field development: 
Japan to make all-out effort to revive right to develop oil field on 
its own (Sankei) 
 
(10) TOP HEADLINES (Nikkei) 
 
(11) EDITORIALS (Nikkei) 
 
ARTICLES: 
 
(1) Poll: Aso cabinet, political parties 
 
ASAHI (Page 3) (Full) 
July 6, 2009 
 
Questions & Answers 
(Figures shown in percentage, rounded off. Figures in parentheses 
denote the results of the last survey conducted June 13-14.) 
 
Q: Do you support the Aso cabinet? 
 
Yes 20 (19) 
No 68 (65) 
 
Q: Which political party do you support now? 
 
Liberal Democratic Party (LDP) 24 (22) 
Democratic Party of Japan (DPJ or Minshuto) 25 (29) 
New Komeito (NK) 3 (3) 
Japanese Communist Party (JCP) 2 (2) 
Social Democratic Party (SDP or Shaminto) 1 (1) 
People's New Party (PNP or Kokumin Shinto) 0 (0) 
Reform Club (RC or Kaikaku Kurabu) 0 (0) 
New Party Nippon (NPN or Shinto Nippon) 0 (0) 
Other political parties 0 (0) 
None 39 (37) 
No answer (N/A) + don't know (D/K) 6 (6) 
 
TOKYO 00001532  002 OF 012 
 
 
 
Q: There will be a general election before long for the House of 
Representatives. To what extent are you interested in the 
forthcoming general election? (One choice only) 
 
Very interested 38 
Somewhat interested 36 
Not very interested 20 
Not interested at all 6 
 
Q: If you were to vote now in a general election for the House of 
Representatives, which political party would you vote for in your 
proportional representation bloc? 
 
LDP 22 (23) 
DPJ 37 (43) 
NK 4 (3) 
JCP 4 (3) 
SDP 1 (1) 
PNP 0 (0) 
RC 0 (0) 
NPN 0 (0) 
Other political parties 1 (1) 
N/A+D/K 31 (26) 
 
Q: Which political party's candidate would you like to vote for in 
your single-seat constituency? 
 
LDP 22 
DPJ 32 
NK 2 
JCP 2 
SDP 1 
PNP 0 
RC 0 
NPN 0 
Other political parties 0 
Independent candidate 2 
N/A+D/K 39 
 
Q: Would you like the current LDP-led coalition government to 
continue, or would you otherwise like it to be replaced with a 
DPJ-led coalition government? 
 
LDP-led coalition 24 (23) 
DPJ-led coalition 47 (52) 
 
Q: Who do you think is more appropriate for prime minister, Prime 
Minister Aso or DPJ President Hatoyama? 
 
Mr. Aso 22 (24) 
Mr. Hatoyama 42 (42) 
 
Q: Prime Minister Aso has appointed two more cabinet ministers. 
However, he has forgone his plan to replace the LDP's executive 
lineup due to opposition from within the party. Do you appreciate 
this response? 
 
Yes 16 
No 68 
 
Q: Some lawmakers in the LDP are seeking to hold an LDP presidential 
 
TOKYO 00001532  003 OF 012 
 
 
election before the general election and to replace Prime Minister 
Aso. Is this move in the LDP convincing? 
 
Yes 22 
No 65 
 
Q: LDP Election Strategy Council Chairman Koga has asked Miyazaki 
Gov. Higashikokubaru to run in the next election for the House of 
Representatives from the LDP. What is your impression of the LDP 
now? 
 
Improved 7 
Worsened 44 
Unchanged 47 
 
Q: DPJ President Hatoyama's political fund reports contained false 
information about individual donations. He owned up to his 
responsibility for overseeing his fund-managing body, saying it was 
done at his secretary's own discretion. He has clarified that he 
would not resign as DPJ president. Is his response convincing on 
this issue? 
 
Yes 27 
No 60 
 
Polling methodology: The survey was conducted July 4-5 over the 
telephone on a computer-aided random digit dialing (RDD) basis. 
Respondents were chosen from among the nation's voting population on 
a three-stage random-sampling basis. Households with one or more 
eligible voters totaled 1,806. Valid answers were obtained from 
1,052 persons (58 PERCENT ). 
 
(2) Poll on Aso cabinet, political parties 
 
NIKKEI (Page 2) (Full) 
July 5, 2009 
 
Questions & Answers 
(Figures shown in percentage. Parentheses denote findings from the 
last survey conducted in June.) 
 
Q: Do you support the Aso cabinet? 
 
Yes 21 (25) 
No 72 (65) 
Can't say (C/S) + don't know (D/K) 7 (10) 
 
Q: Which political party do you support or like? 
 
Liberal Democratic Party (LDP) 29 (31) 
Democratic Party of Japan (DPJ or Minshuto) 37 (37) 
New Komeito (NK) 4 (3) 
Japanese Communist Party (JCP) 4 (4) 
Social Democratic Party (SDP or Shaminto) 2 (2) 
People's New Party (PNP or Kokumin Shinto) 1 (1) 
Reform Club (RC or Kaikaku Kurabu) 0 (0) 
New Party Nippon (NPN or Shinto Nippon) 0 (0) 
Other political parties 0 (1) 
None 16 (14) 
C/S+D/K 7 (7) 
 
(Note) The total percentage does not become 100 PERCENT  in some 
 
TOKYO 00001532  004 OF 012 
 
 
cases due to rounding. 
 
Polling methodology: The survey was taken July 3-4 by Nikkei 
Research Inc. by telephone on a random digit dialing (RDD) basis. 
For the survey, samples were chosen from among men and women aged 20 
and over across the nation. A total of 1,455 households with one or 
more eligible voters were sampled, and answers were obtained from 
843 persons (57.9 PERCENT ). 
 
(3) LDP not making progress in manifesto drafting 
 
ASAHI (Page 4) (Full) 
July 3, 2009 
 
Naoyuki Hayashi, Go Yamashita 
 
Efforts in the Liberal Democratic Party (LDP) to draft a manifesto 
(campaign pledges) for the House of Representatives election are at 
a standstill. Although a small team led by Election Strategy Council 
Vice Chairman Yoshihide Suga, a close aide to Prime Minister Taro 
Aso, is drawing up a draft behind the scenes, they are unable to 
find any dramatic policies to highlight due to the drifting of the 
administration. The "anti-Aso forces," which have become impatient, 
are also moving to apply pressure. The situation is such that the 
very process of drafting the manifesto under the prime minister may 
founder. 
 
In a speech on June 30, Suga declared that: "We will put forward 
policies on decentralization of power and introduction of the doshu 
(regional bloc) system. Security will be a major point of 
contention. We will also include (the regulation of) amakudari 
(golden parachutes)," enumerating the LDP's "prospective pledges." 
 
A project team led by Suga and consisting of Deputy Secretary 
General Nobuteru Ishihara, General Council Deputy Chairman Hajime 
Funada, Policy Research Council Deputy Chairman Hiroyuki Sonoda, and 
others has been holding meetings behind the scenes. Regulation of 
hereditary Diet seats - which is Suga's pet idea -- reduction of the 
number of Diet members, and policies to deal with the aging society 
and the declining birth rate are also expected to be included. 
 
However, even as the election approaches, the overall picture of the 
manifesto remains a mystery. A member of the project team confides 
that, "We have thought of many things but are completely unable to 
project our differences with the Democratic Party of Japan (DPJ)." 
The DPJ is already one step ahead in regulating hereditary Diet 
seats and proposing a reduction in the number of Diet seats. With 
regard to the prime minister's favorite topic of fiscal resources, 
as long as the increase in consumption tax rate is premised on 
economic recovery, it will be hard to write a specific date into the 
manifesto. "This is the same as the DPJ's, which says there will be 
no tax hike in four years," complained the project team member. 
 
Concerned junior members make own suggestions 
 
Under this situation, mid-ranking and junior party members are 
becoming increasingly concerned. The "manifesto coalition 
conference" consisting of nine groups distancing themselves from Aso 
drew up their own draft manifesto on July 2 and asked project team 
leader Suga to include their proposals in the party's manifesto. 
 
Their proposed policies include: thorough reform of Kasumigaseki 
 
TOKYO 00001532  005 OF 012 
 
 
(the bureaucracy), improvement of the political culture, including 
the reduction of the number of Diet members and regulation of 
hereditary Diet seats, decentralization of power to the local 
governments, and two other items. 
 
This group is wary of the prime minister's possible plan to dissolve 
the Diet at an early date and has insisted that "Diet dissolution 
without a manifesto is unacceptable." However, while Suga is saying 
that the manifesto will be drafted before the date of the official 
declaration of candidacy, he indicated, "You can think of the timing 
of Diet dissolution and the manifesto as two separate matters." 
 
The manifesto conference is obviously also trying to pressure the 
prime minister. However, each group is keeping a different distance 
from Aso, so their future course of action is still undecided. 
 
(4) DPJ President Hatoyama's donation issue to become new source of 
trouble; Ruling camp demands Hatoyama's Diet testimony 
 
ASAHI (Page 2) (Full) 
July 3, 2009 
 
The individual donation fabrication scandal involving Democratic 
Party of Japan (DPJ) President Yukio Hatoyama's fund management 
organization has created a commotion. While the ruling parties have 
called for testimony by Hatoyama as a Diet witness, the other 
opposition parties have increased their criticism of Hatoyama. With 
an eye on the next House of Representatives election, some in the 
DPJ are now concerned that the situation will take a turn for the 
worse. 
 
JCP, DPJ criticize Hatoyama 
 
In a meeting on July 2 of the Lower House Special Committee on 
Political Ethics Establishment and Revision of the Public Offices 
Election Law, the ruling parties demanded that Hatoyama be called to 
testify as a Diet witness, arguing that Hatoyama's political fund 
management "is extremely corrupt." The DPJ, however, said that it 
would not accept the ruling coalition's demand, criticizing the 
committee chairman from the ruling camp for having decided to hold 
deliberations on July 3 by virtue of his office, as "oppressive." In 
a meeting of the Lower House Budget Committee, the Liberal 
Democratic Party (LDP) proposed to the DPJ that intensive 
discussions be held on July 6 regarding the issue of "politics and 
money." But the DPJ refused to accept the proposal. 
 
Nobutaka Machimura, an LDP member and former chief cabinet 
secretary, said in a meeting on July 2 of his faction: "That's a 
kind of political fund laundering. (Hatoyama) should resign as party 
head." Former Finance Minister Sadakazu Tanigaki criticized Hatoyama 
in a meeting of the Koga faction, saying: "The DPJ is tough on other 
parties but lenient on itself." 
 
The ruling camp wants to recover from its setbacks by taking up the 
Hatoyama issue. 
 
With Lower House dissolution drawing closer, there is a possibility 
that the approval rating for the Aso cabinet will drop further as 
the Aso administration is in turmoil with Aso's decision to give up 
on his attempt to shuffle the LDP executive lineup. Although Aso is 
looking into the possibility of dissolving the Lower House soon 
after the July 12 Tokyo Metropolitan Assembly election, many 
 
TOKYO 00001532  006 OF 012 
 
 
lawmakers in the ruling camp are opposed to an idea. 
 
The DPJ has taken a position that Hatoyama fulfilled his 
accountability at a press conference on June 30. The DPJ intends to 
dodge the ruling coalition's pursuit of Hatoyama, with Secretary 
General Katsuya Okada saying: "The aim is to turn the election to 
its advantage." However, other opposition parties also have 
criticized the DPJ's stance. 
 
Japanese Communist Party (JCP) Chairman Kazuo Shii told reporters on 
July 2: "(Hatoyama) has not explained why his fund management body 
committed wrongdoings and where the money came from." Social 
Democratic Party (DPJ) Chairperson Mizuho Fukushima also said: "As 
for the (anonymous) donations of less than 50,000 yen, insufficient 
explanations have not been provided." 
 
Meijo University Prof. Nobuo Gohara, who served as chairman of the 
third-party committee the DPJ set up to investigate the illegal 
donation scandal involving Nishimatsu Construction Co., told the 
press corps on July 2 in Tokyo: "The DPJ should set up an 
investigative committee to seek the truth objectively." 
 
Some in the DPJ are wary of how the issue will turn out, with a 
junior lawmaker saying: "The fact that the money issues involving 
two party leaders were discovered will have a serious impact on the 
party. Unless the issue is resolved as quickly as possible, the 
situation might take a turn for the worse." 
 
(5) Russia to put off concrete proposals on Northern Territories at 
bilateral summit, reacting to Japan's claim of "inherent part of our 
territory" 
 
SANKEI (Page 2) (Full) 
July 6, 2009 
 
It was learned on July 5 that Russian President Dmitriy Medvedev is 
likely to put off making specific proposals at the July 9 summit 
meeting with Japan in Italy that would lead to progress on the 
Northern Territories issue. The excuse that will be used will be 
statements in Japan after Premier Vladimir Putin's May visit to 
Japan about "Russia's illegal occupation" of the islands and claims 
that they are an "inherent part of Japanese territory." Medvedev 
will explain that his reason for not making any proposals is that 
the conditions for making progress in this issue are still not ripe. 
The question now is how far Prime Minister Taro Aso can draw out a 
response from Medvedev at the summit meeting. 
 
Coordination has been underway for the meeting to take place for 
around one hour in the morning of July 9 (afternoon of the same day, 
Japan time) in L'Aquila, where the G-8 Summit is being held. 
 
When the two leaders last met in Sakhalin (Karafuto) last February, 
they had confirmed their intention to step up work on a "new 
original and unconventional approach" on the territorial issue. At 
that time, Aso pressed Medvedev by saying: "Unless there is an 
intention to work for concrete progress, there can be no building of 
a partnership," showing his strong desire to resolve the territorial 
dispute. 
 
When Putin came to Japan in May, he told Aso that: "The president is 
prepared to talk in detail at the summit meeting in July. All 
options for resolving the territorial issue will be discussed." 
 
TOKYO 00001532  007 OF 012 
 
 
 
However, the Russian side has criticized Aso's statement to the Diet 
in May that "Russia's illegal occupation continues" on the Northern 
Islands. On June 22, Sergei Naryshkin, chief of staff of the Russian 
Presidential Office, has warned Aso that, "It is important to have 
discussions in a quiet atmosphere." Russia has also said that it 
"cannot afford to be indifferent" (Sergey Mironov, speaker of the 
Federation Council) to the enactment of the amended Law on Special 
Measures for the Promotion of a solution to the Northern Territories 
Issue designating the Northern Territories as an "inherent part of 
Japanese territory." 
 
Since Aso is said to "get along well" (senior Ministry of Foreign 
Affairs (MOFA) official) with Medvedev, he would like to find some 
sort of a key to a solution through this personal relationship. The 
Japanese side is critical of the present Russian offensive. A senior 
MOFA official noted, "Citing something trivial to put off a solution 
is a usual Russian tactic." 
 
On the part of Russia, it has already made certain achievements 
regarding the economy and development in the Far East and Eastern 
Siberia through Putin's meeting with Aso in May. Therefore, it does 
not need to press Japan for further economic cooperation using the 
territorial issue as leverage. 
 
Furthermore, it is also possible that Russia is taking Aso lightly 
since his administration is now in weakened state. 
 
(6) U.S. political conflict over continued production of F-22; 
Selection of next-generation mainstay fighter in deep disarray; 
Domestic defense industry struggling 
 
NIKKEI (Page 2) (Abridged slightly) 
July 6, 2009 
 
Work to select the Air Self-Defense Force's next-generation mainstay 
fighter jet (FX) is becoming increasingly chaotic. The disarray 
results from the fact there are no bright prospects for the future 
of the ongoing political conflict in the United States over the F-22 
state-of-the-art stealth fighter, which the Japanese government is 
eager to procure. Japan will have to wait for a U.S. decision. With 
the suspension of F-22 production approaching, the Japanese defense 
industry is begging for an early decision for the sake of 
maintaining the aircraft's production line and know-how. 
 
& Congress seeking ways to export to Japan 
 
Equipped with radar-evading stealth technology and the ability to 
sustain supersonic flight, the F-22 is the strongest fighter jet in 
the world. The United States has a domestic law (Obey Amendment) 
that prohibits the exports of high-level military technologies. The 
U.S. Department of Defense announced in April that it will suspend 
the procurement of F-22s to curb the nation's defense spending, 
dashing the Japanese government's hopes of purchasing the aircraft. 
 
In late June, the United States included in its fiscal 2009 
supplementary budget costs for the continued procurement and 
production of the F-22. A provision specifying a plan to look into 
the possibility of allowing exports to Japan has also been 
incorporated in the National Defense Authorization Act for Fiscal 
Year 2010. Out of consideration for the defense industry and for the 
aim of securing jobs, the U.S. Congress has come up with the option 
 
TOKYO 00001532  008 OF 012 
 
 
of exporting F-22s to Japan, according to a senior Defense Ministry 
official. Japan has apparently been given another chance to procure 
the aircraft. 
 
& Inseparable from Middle East policy 
 
Nevertheless, given the Obama administration's determination to 
suspend the procurement of the aircraft, Japan intends to keep 
watching the conflict between the U.S. government and Congress. If 
the ban on exports to Japan is lifted, Israel, which has had a 
strong interest in the F-22, is certain to seek the same treatment, 
creating a new source of trouble in the Middle East. A Liberal 
Democratic Party (LDP) lawmaker of the national defense policy 
clique thinks (the question of exporting the F-22) is inseparable 
from Middle East policy, a top priority for the U.S. 
administration. 
 
& Mitsubishi Heavy Industries sounds out government about production 
of F-22 
 
The Japanese defense industry, which is involved in the production 
of fighters, is highly alarmed at the Japanese government's 
wait-and-see attitude regarding the F-22. Licensed production of the 
F-22 is not allowed in Japan, but some of the candidate models are 
allowed to be produced in the country. The future of the FX will 
have an impact on the production basis of (the Japanese defense 
industry). 
 
Mitsubishi Heavy Industries, Ltd. has recently informally asked the 
government and the ruling coalition to produce the F-2 as a stopgap 
step. The company fears that if the F-22 selection issue drags on, 
it will lose its chance to produce fighters domestically, thereby 
forcing it to withdraw from the defense industry. On June 17, the 
Defense Ministry abruptly set up a panel to study the modalities of 
the production and technological basis for fighter jets. 
 
A senior Defense Ministry official reacted coldly, saying, "The 
ministry simply displayed its stance of consideration for the 
defense industry." The ongoing battle in the United States (over the 
F-22) is rattling the Japanese political world and the defense 
industry. 
 
(7) Japan likely to acquire rights to develop oil fields in southern 
Iraq 
 
SANKEI (Top Play) (Full) 
July 3, 2009 
 
It was learned on July 2 that Iraqi Oil Minister Husayn 
al-Shahristani and other related officials will visit Japan as early 
as July 10 to discuss concession rights in oil fields in that 
nation, which the Iraqi government will release to foreign companies 
in order to secure funds to finance the postwar reconstruction of 
the nation. They are expected to enter final adjustments with a 
consortium involving Nippon Oil Corporation (ENEOA) and some other 
oil companies, which is aiming to acquire the right to develop the 
Nasiriyah oil field. They are aiming to reach an agreement before 
the end of the month. There is now a strong probability of Japan 
acquiring a concession right due to a visit to Japan by the oil 
minister himself, who has overwhelming authority. 
 
For Japan, which relies exclusively on imported oil, securing a 
 
TOKYO 00001532  009 OF 012 
 
 
Japan-developed oil field is key national challenge in terms of 
securing crude oil on a stable basis and for  the sake of its energy 
security. The Nasiriyah oil field is expected to produce 600,000 
barrels a day or over 10 PERCENT  of Japan's daily consumption. If 
Japan succeeds in acquiring a concession right in that oil field, it 
would become the largest-ever oil field developed by Japan. 
 
The governments of Japan and Iraq are working out the possibility of 
Sami Al Aaraji, the head of the National Investment Committee, as 
well as the oil minister visiting Japan. ENEOA along with Inpex 
Corporation and JGC Corporation, a major plant engineering firm, are 
engaging in talks to acquire a right to develop an oil field over 20 
years in part of the mining area belonging to the Nasiriyah oil 
field. The Japanese government is also strongly backing those four 
companies. 
 
As a Japan-developed oil field (if realized), the size of the 
Nasiriyah oil field is by far larger than that of the Khafji oil 
field (300,000 barrels a day), in which Arabian Oil Co. acquired 
concession rights in 1957 and eventually lost them. 
 
Three consortiums of Japan, Italy and Spain are taking part in talks 
to acquire a concession right in the Nasiriyah oil field. Spain has 
effectively pulled out of the race. Japan is now having a one-on-one 
battle with the Italian consortium. Japan had been viewed as having 
an advantage. However, Italy is now trying to achieve a rollback, by 
proposing assistance for the construction of infrastructure. 
 
As such, Japan will propose to the delegation assistance for the 
building of infrastructure, such as the building of refineries and a 
power plant, through the Japan Bank for International Assistance 
(JBIC), as well as assistance for Iraqi reconstruction through 
official development assistance (ODA). It wants to make those 
proposals lead to reaching a final agreement before the end of the 
month. 
 
According to a source familiar with the oil industry, the fate of 
the planned talks does not allow any optimism. ENEOS is 
concentrating on talks on the Nasiriyah oil field, by forgoing 
participation in bidding for the development of other oil fields 
held by the Iraqi government. ENEOS Chairman Fumiaki Watari said 
with confidence: "The decision will be reached shortly. I have some 
leads." 
 
Iraq strongly wants investment by Japanese companies for their ample 
funds. Iraq's confirmed crude oil reserves stand at 115 billion 
barrels, following Saudi Arabia and Iran. Oil fields in that country 
have not been fully developed due to the Iraq war. The Iraqi 
government has released concession rights in their oil fields for 
the first time in about 40 years. 
 
(8) Iraq's auction of rights to develop oil, gas fields exposes gaps 
in intents between foreign firms and Tehran 
 
NIKKEI (Page 6) (Excerpts) 
July 4, 2009 
 
Yorinao Ota in Dubai, Yasumasa Shimizu in London 
 
In recent international biddings in Iraq, held for the first time in 
about 40 years in that country, there were no winners in seven out 
of six oilfields and two gas fields. This exposed Iraq's ambition to 
 
TOKYO 00001532  010 OF 012 
 
 
utilize foreign capital and technology, as well as its intent to 
protect its natural resources at the same time. There were 
apparently clashes of such intents of Iraq and the participating 
companies' expectations and skepticism about the country's political 
and security situations. 
 
International biddings were held on June 30 for the first time in 
Iraq since the oil industry was nationalized in 1972. Prime Minister 
Nouri al-Maliki pinned his hopes on the development of oilfields by 
drawing on foreign firms' capital procurement and technological 
capabilities. Foreign companies, too, had expected to gain full 
access to Iraq's oilfields, which have the world's third-largest 
reserves. 
 
An industrial source at a Japanese firm described with displeasure 
the terms and conditions presented by the Iraqi side. Contracts were 
designed barring foreign companies from having rights to the oil and 
gas produced from the fields. Even so, about 30 companies gained 
qualifications to take part in the biddings. They intended to 
generate profits from payments coming from the Iraqi side in 
proportion to production. 
 
According to AFP and other sources, China National Offshore Oil 
Corporation (CNOOC) and others sought 25.4 dollars in return for a 
barrel of oil produced at Maysan oilfields as against Iraq's offer 
of 2.3 dollars. 
 
BP and China National Petroleum Corp. (CNPC) won a contract for the 
development of Rumaila oil field. BP, however, initially sought the 
amount twice higher than Iraq's offer. The contract was concluded in 
the end with BP making concessions to accept two dollars a barrel. 
 
TNK-BP, a joint venture in Russia, represents one-fourth of the BP's 
global production. As seen from this, BP's production is 
concentrated in specific areas in the world. BP apparently wanted to 
win a large oil field in Iraq for spreading its risks. CNPC, which 
provides oil to China, obviously wanted to win a deal on Rumaila oil 
field at all costs. 
 
A person connected with a certain firm indicated that some risk 
factors, such as the security in Iraq, have pushed up corporate 
demands, posing questions for Iraq that pressed foreign firms for 
contracts at low prices. 
 
Iraqi Oil Minister al-Shahristani, who took the leadership in the 
biddings, indicated that the bullish conditions were set in 
deference to domestic opinion, saying, "The government is determined 
to protect income from oil, and I believe the government succeeded 
in getting that message across to the people." 
 
(9) Negotiations with Iraq to secure right to oil field development: 
Japan to make all-out effort to revive right to develop oil field on 
its own 
 
SANKEI (Page 3) (Abridged slightly) 
July 3, 2009 
 
The Iraqi government's delegation is to visit Japan to discuss 
rights to develop Iraqi oil fields. Japan wants to make sure that it 
secures such a right, availing itself of this opportunity by all 
means. Japan has been suffering a series of setbacks in developing 
oil fields on its own, as can be seen by the loss of concession 
 
TOKYO 00001532  011 OF 012 
 
 
rights in the Khafji oil field possessed by Arabian Oil, having 
failed to renew the right to develop that oil field from 2000 
through 2003. For Japan, which relies on imports for almost all of 
its oil consumption, reviving major Japanese-flag oil fields is its 
cherished desire. 
 
Japan's earnest desire is to raise ratio of crude oil produced from 
oil fields in which Japanese companies have interests to 40 PERCENT 
 
 
The Ministry of Economy, Trade and Industry (METI) envisages a 
scenario of raising the share of crude oil produced from oil fields 
in which Japanese companies have interests  from about 11 PERCENT 
in 2007 to 40 PERCENT  by 2028. It positions securing rights in 
Iraq's oil fields as the means to achieve that end. Oil-related 
industries hope Japan will secure such rights, although there are 
major risks involved, such as the delay in Iraq's postwar 
reconstruction and uncertainties about that country's public 
security. But as one oil company executive said: "Iraqi oil fields 
are special. They can be called the last paradise." 
 
The opening of rights to develop oil fields in Iraq is the best 
opportunity for Japan to achieve a rollback. However, moves by a 
number of countries to secure rights to develop oil fields in Iraq 
have been dubbed "a scramble for spoils," as one government source 
put it. Negotiations that would allow Japan to obtain the right to 
develop oil fields in Iraq are likely to be tough-going. China's 
presence has been particularly noticeable, as can be seen by its 
state-run oil company, which teamed up with BP of Britain, winning 
the first bid for the development of eight oil and gas fields held 
by the Iraqi government. 
 
The first bid was mainly for projects to increase production of 
existing oil fields. The Japanese side characterized this as a 
prelude to the main bidding, according to an informed source. The 
second bidding for projects at 12 locations to be held by the end of 
the year at the earliest is Japan's preferred choice. According to 
Reuters, an Iraqi Ministry of Oil press secretary predicted on July 
2 that the second bidding will be held earlier than the end of the 
year as originally planned. Chances are that the second bidding 
could be held two to three months earlier. Japan wants to build 
momentum based on its success in the development of Nasiriyah oil 
field, regarding which Japan is holding talks with Iraq on its own. 
 
Whether Japan will be able to beat out China, which is increasing 
its presence, in the scramble for rights and achieve its earnest 
desire to revive a Japan-developed oil field depends on whether the 
public and private sectors can set up a joint channel to Iraq. 
 
(10) TOP HEADLINES 
 
Asahi: Mainichi: Yomiuri: Sankei: Tokyo Shimbun 
DPJ wins Shizuoka gubernatorial election 
 
Nikkei: 
Japanese cell phone makers to reenter overseas markets due to 
shrinking domestic market 
 
Akahata: 
Tokyo Metropolitan assembly election: Branches, supporters' 
associations making all-out effort 
 
 
TOKYO 00001532  012 OF 012 
 
 
(11) EDITORIALS 
 
Asahi: 
(1) Newly enacted law to enhance energy supply structure should be 
exploited to prevent global warming: 
(2) Create mechanism to fully utilize security cameras 
 
Mainichi: 
(1) Shizuoka gubernatorial election: Hopes to see change in 
government evident 
(2) Iraq and Iran: Do not turn change into crisis 
 
Yomiuri: 
(1) LDP loses Shizuoka gubernatorial election: Prime minister in 
predicament 
(2) Illusory world record: Compete without being affected by 
swimwear 
 
Nikkei: 
(1) Prime minister finds himself in fix due to LDP's loss in 
Shizuoka gubernatorial election 
(2) Upper House to speed up timetable for holding constitutional 
examination council meeting 
 
Sankei: 
(1) Shizuoka gubernatorial election: LDP should look into cause of 
defeat 
(2) Google library: Legal consolidation that matches times required 
 
Tokyo Shimbun: 
(1) Shizuoka gubernatorial election: LDP should listen to voices of 
public calling for change 
(2) Agreement to provide aid for patients of unacknowledged Minamata 
disease: Minamata disease case not over yet 
 
Akahata: 
(1) Small- and medium-size businesses' technical power is Japan's 
treasure 
 
ZUMWALT