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ACTION EB-11
INFO OCT-01 EUR-25 EA-11 ISO-00 SCEM-02 INT-08 AID-20
CIAE-00 COME-00 FRB-02 INR-10 NSAE-00 RSC-01 TRSE-00
XMB-07 OPIC-12 CIEP-02 LAB-06 SIL-01 OMB-01 NSC-10
SS-15 STR-08 CEA-02 PM-07 L-03 H-03 DODE-00 PA-03
USIA-15 PRS-01 NEA-10 DRC-01 /198 W
--------------------- 049470
R 100835Z SEP 73
FM AMEMBASSY TOKYO
TO SECSTATE WASHDC 6628
INFO AMEMBASSY MOSCOW
AMCONSUL HONG KONG
USLO PEKING
C O N F I D E N T IA L TOKYO 11625
DEPT PASS EXIMBANK
E.O. 11652: GDS
TAGS: ENRG, PFOR, JA, UR
SUBJ: SOVIET MOVES ON TYUMEN OIL PIPELINE
REF: TOKYO 10920
SUMMARY: SOVIET FIRST DEPUTY MIN OF FOREIGN TRADE TOLD JAPAN-
ESE DURING RECENT VISIT THAT MAXIMUM OIL SALES THROUGH TYMEN
OIL PIPELINE WOULD BE 25 MILLION TONS PER YEAR, RATHER THAN
40 MILLION TONS JAPANESE HAD EXPECTED. JAPANESE RESERVED THEIR
POSITION, CLAIMING SOVIET ACTION RAISED QUESTIONS RE ECONOMIC
JUSTIFICATION OF PROJECT. END SUMMARY.
1. DURING RECENT VISIT TO JAPAN OF SOVIET FIRST DEPUTY MIN
OF FOREIGN TRADE, IVAN SEMICHASTNOV, (SEE REFTEL) JAPANESE
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WERE UPSET TO LEARN THAT SOVIETS HAD APPARENTLY SHIFTED THEIR
POSITION ON TYUMEN OIL PIPELINE OUTPUT. ACCORDING TO JUNZO
HIGAKI, SENIOR EXECUTIVE DIRECTOR OF OVERSEAS PETROLEUM CORP
(OPC), (COORDINATING FIRM FOR TYUMEN PROJECT), SEMICHASTNOV
TOLD IMAZATO, PRES OF OPC, THAT SOVIETS COULD SUPPLY ONLY
25 MILLION TONS OF OIL PER YEAR (AT FULL PRODUCTION) THROUGH
TYUMEN PIPELINE RATHER THAN 40 MILLION TONS PER YEAR THAT
JAPANESE EXPECTED. SOVIETS OFFERED NO EXPLANATION FOR SHIFT,
HIGAKI SAID, OTHER THAN SAYING THAT 25 MILLION TON FIGURE
CONSISTENT WITH SOVIET ENERGY POLICY AND CURRENT OIL SUPPLY
AND EMAND CONDITIONS WITHIN SOVIET UNION. SOVIETS ASKED THAT
JAPANESE SIGN MEMORANDUM TO EFFECT THAT THEY ACCEPTED THIS
OUTPUT LEVEL. ACCORDING HIGAKI IMAZATO REFUSED, REPLYING THAT
SOVIET SHIFT RAISED QUESTIONS ABOUT ECONOMIC JUSTIFICATION OF
PROJECT, AND THAT JAPANESE SIDE WOULD HAVE TO STUDY SOVIET
PROPOSAL CAREFULLY.
2. ACCORDING TO PRESS REPORTS, SOVIETS INTEND TO USE 15
MILLION TONS OF OIL WHICH DEDUCTED FROM FIGURE JAPANESE HAD
HOPED TO RECEIVE TO SUPPLY SOVIET REFINERY TO BE BUILT AT
NAHODKA. PRESS REPORTS CONFLICT, HOWEVER, ON WHETHER REFINED
PRODUCT FROM NAHODKA REFINERY WILL BE EXPORTED BY SOVIETS,
RETAINED FOR DOMESTIC USE, OR COMBINATION OF BOTH.
3. KAZUMI SUZUKI, MANAGER OF OIL IMPORT SECTION OF IDEMITSU
OIL CO, TOLD EMBOFF SEPT 7 THAT SEMICHASTNOV GROUP HAD MADE
NO MENTION OF PLANNED DISPOSITION OF REFINED PRODUCTS FROM
NAHODKA REFINERY AND HAD SAID ONLY THAT MAXIMUM CRUDE OIL
OUTPUT WOULD BE 25 MILLION TONS PER YEAR. SUZUKI NOTED THAT
IT KNOWN THAT SOVIET DID HAVE PLANS TO CONSTRUCT REFINERY IN
NAHODKA AREA WITH CAPACITY OF 12 MILLION TONS PER YEAR, BUT
HE STRESSED THAT IT ONLY PRESS SPECULATIONS THAT ANY PART
OF REFINERY OUTPUT WOULD BE SOLD TO JAPAN.
4. BOTH HIGAKI AND SUZUKI (IN IDENTICAL EXPLANATIONS) TOLD
EMBOFF THEY SAW TWO POSSIBLE MOTIVES FOR SOVIET ACTION: (A)
AS TACTIC TO MAKE JAPANESE EITHER PAY HIGHER PRICES FOR
ADDITIONAL OIL OR PUT UP MORE FUNDS FOR FURTHER EXPLORATION
IN TYUMEN AREA (SEE TOKYO 11013) OR (B) AS BARGAINING POINT
ON WHICH SOVIETS COULD EASILY CONCEDE DURING TANAKA-
BREZHNEV SUMMIT IN ORDER AS JAPANESE PUT IT "TO GIVE TANAKA
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A PRESENT."
5. COMMENT: JAPANESE HAVE FOR PAST YEAR AND A HALF ALWAYS
USED RANGE OF 25-40 MILLION TONS PER YEAR AS EXPECTED OUTPUT
OF PIPELINE, NOT INCLUDING ABOUT 10 MILLION TONS WHICH SOVIETS
WERE EXPECTED TOWANT FOR USE IN FAR EASTERN SIBERIA. SOVIET
TRADE REP PETROSIAN ALSO TOLD EMBOFF ABOUT MONTH AGO THAT
SOVIETS HAD NEVER GUARANTEED ANY MORE THAN 25 MILLION TONS OF
CRUDE OIL PER YEAR TO JAPAN. NEVERTHELESS, IT APPEARS PROJECT
PROMOTERS PLACED STRONG HOPES ON HIGHER FIGURE.
6. EMBASSY WOULD NOT INTERPRET SEMICHASTNOV'S DISCLOSURE AS
SOVIET TACTIC, BUT RATHER AS ONE OF NUMBER OF RECENT INDICA-
TIONS THAT SOVIETS CONCERNED ABOUT THEIR OWN ENERGY SITUATION
AND THEIR ABILITY TO EXPORT SUBSTANTIAL QUANTITIES OF OIL TO
JAPAN.
7. EMBASSY UNDERSTANDS THAT JUNZO HIGAKI, AS WELL AS TANAKA
AND NIISHIDA OF OPC STAFF, WILL VISIT US SEPT 17-23, AND
WILL CALL ON FIRST VICE PRESIDENT SAUER AND EXECUTIVE VICE
PRESIDENT BOSTWICK OF US EXIMBANK ON SEPT 20. EXIM MAY WANT
TO PURSUE QUANTITY ISSUE WITH HIGAKI FURTHER AT THAT TIME.
INGERSOLL
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