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ISTKIBUT WikislTED Japan, oil and Nixon By James Ridgeway Washington, D.C. Probably the most significant aspect of Nixon’s economic plan involves the long range interests of American corporations operating in the Pacific Basin. A handful of large companies are both anxious to protect their markets in Japan and, in consort with the Japanese, to extend them elsewhere in Asia. To follow and understand the manuevering that is now taking place, it is useful to look at some of the more basic Pacific trading patterns. Japan is the most important energy market in the world and is virtually dependent on imported fuels. Oil provides two thirds of all energy; most of it comes from the Middle East and is provided by four major international firms: Caltex, owned jointly by California Standard and Texaco, provides 15% of all Japan’s oil: Jersey Standard and the Royal Dutch Shell group each account for 11%. Thus, 37% of Japan’s basic energy resource is controlled by four large oil companies, three of them U.S. In addition, U.S. oil companies participate in major refining activities and take part in the search for oil for the shore of Japan. Hard Times The Japanese would like to be less reliant on Middle Eastern oil and to shake loose the “seven sisters,” as the companies in the international oil cartel are called. Japanese companies are involved in the search for oil around the world; Japan has producing wells in the Middle East, and is looking in Alaska. But most -Japanese companies are small in size and don’t have the capital to mount extensive drilling programs. Thus, it is difficult for them to avoid taking in the big international companies as partners. For instance, when Japex, a government oil company, did not hit oil off Indonesia, the Japanese government withdrew support. Gulf immediately moved in and made an advantageous deal, agreeing to put up $2 million in exchange for a 50% interest in the Japex operation. The Japanese government had already spent $27 million in drilling. In an effort to avoid dependence on the international companies, the Japanese government now encourages oil companies to band together in joint ventures. Even so they can muster capitol of little more than $80 million, not ‘much when compared to Gulf’s $5 billion. The Japanese energy markets will double in size by 1973; California Standard, benefitting from the terrific demand ‘ for oil, reported record high profits recently. Thus, from the standpoint of the oil companies, it is imperative that the Japanese market remain captive. That means controlling oil and gas in the South China sea. Control of oil supplies allow the seven sisters to maintain advantageous prices. The Japanese steel industry, third largest in the world, depends on imported iron ore and coking coal. Most of the coal and iron ore come from outside southeast Asia. They are provided by a few international corporations, again, most of them U.S. based. For example, Kaiser Industries of Oakland is a major supplier of iron ore to Japan. Kaiser ships some ore from its mines in the western U.S.; but most of it comes from vast iron mines partly controlled by Kaiser in Australia. Utah Construction & Mining, a San Francisco based company, is a major supplier of coking coal to the November 5, 1971 19 TERRITORIES AVAILABLE WHOLESALE ONLY MANUFACTURERS REPRESENTATIVE FOR GLASS HEAD ROLLERS PAPERS PIPES INCENSES PATCHES BODY OILS CALL OR WRITE FOR ADDITIONAL INFORMATION OUTHWEST HEAD DIVRIbUTOK 3718 MT. VERNON HOUSTON ,TEXAS 77006 3 WEEK DELIVERY FREE FREIGHT ON PRE-PAID ORDERS