Staff writer The expiration Monday of the 40-year-old drilling rights of Japan's Arabian Oil Co. to a Saudi Arabian oil field dealt another blow to Tokyo's long-term policy of expanding Japanese-explored oil sources as a precaution against emergencies like the 1970s oil crises. The expiration was a long time coming, as Saudi Arabia proceeded to nationalize its oil fields in the 1970s amid a growing sense of nationalism, according to analysts. But it also raises the question of how rational is it for Japan to pursue costly development of crude oil -- a policy that has been publicly criticized because of quasi-governmental Japan National Oil Corp.'s high-risk financing of developers. Now that the rights to Khafji oil field have finally expired, Arabian Oil will lose half the 280,000 barrels of crude oil it produces each day. The concession with Kuwait in the remaining half of the site, which is located in the former neutral zone between Saudi Arabia and Kuwait, will expire in January 2003. Japan is again expected to face another uphill battle for renewal. Japan's imports of crude oil in the Khafji oil field reached 156,700 barrels per day in fiscal 1998. That may be a mere 3.5 percent of the nation's total imports, but the amount represents 23 percent of crude oil imports produced by 42 Japanese developers overseas. The expiration of the Saudi portion of the Khafji drilling rights may force Tokyo to change its import target to 1.2 million barrels of crude, or 30 percent of total imports, from oil fields developed by Japanese firms by 2010. The 30 percent target was originally set in 1967. A subcommittee of the Petroleum Council, an advisory panel to the minister of international trade and industry, will soon resume deliberations on the issue, which had been disrupted by negotiations over the concessions, and is expected to hammer out a report around April to revise the target. Speaking to reporters Monday morning, Trade Minister Takashi Fukaya said, "Securing an oil supply (by developing fields) has a lot of risks, a lot of hits-or-misses and is vulnerable to economic changes (such as oil prices and exchange rates). "But there is no change in our policy that the development of oil fields is desirable, and we'll continue to step up efforts to that end," he added. Some experts criticize this stance. "It'd be better for the government to give up on quantitative targeting of oil imports from Japanese-developed oil fields," said Kazuhiro Sakuma, senior analyst in charge of energy issues for Daiwa Institute of Research Ltd. "The government must now reconsider on what grounds it aims at such a quantitative target now, when we can readily buy from the market and have diversified sources for oil." As long as the flow of oil continues, Japanese oil wholesalers will remain unworried. An affiliate of Saudi Arabia's state-run Saudi Aramco is expected to continue to supply crude oil after requisitioning local assets from Arabian Oil in the Khafji oil field. While the government stresses the need for securing oil fields developed by Japanese firms as a countermeasure against a potential energy crisis, Sakuma said Japan should acquire its oil from the market, promote friendly ties with oil-producing nations and further explore other resources like natural gas. "Developing oil fields is not likely to give Japan political pull with oil-producing countries. The United States maintains political influence with the presence of its military and vast investment strategies," Sakuma said. However, Tsutomu Toichi, a director of the Institute of Energy Economics Japan, still sees importance in securing oil-field access to ensure the nation's energy security. However, he also admits that development projects must be pursued in a more efficient manner to minimize the risk to taxpayers.