Recent events surrounding energy-development projects overseas highlight resource-poor Japan's vulnerability. They underscore the need for both the government and the private sector to develop a multipronged long-term strategy that will enable the nation to flexibly cope with unexpected changes in the energy-supply situation.
Oil accounts for about 50 percent of Japan's primary energy. Japan imports most of its oil, with about 90 percent of it coming from the Middle East. Iran alone, in fiscal 2005, provided 13.8 percent of Japan's oil imports.
Japan can never rest assured that it has secured enough energy supplies for the future, since resource exploration and development agreements involve more than national interests. In early October, for example, Inpex Holdings Inc., which is 29.35 percent owned by the Japanese government, was forced to cut its concession in southwest Iran's Azadegan oil field to 10 percent from the original 75 percent because of international political concerns. Inpex had signed a contract with National Iranian Oil Co. in February 2004 to develop the oil field, whose reserves amount to an estimated 26 billion barrels.