Japanese Upstream Oil Investment Strategies – A Case Study of the Gulf

The research paper discusses the structure of the Japanese upstream oil industry, investment strategies of Japanese market players and attempts to acquire concessions through case studies in the Gulf Cooperation Council, Iran and Iraq. Japan is the 4th largest importer of oil in the world and more than 80% of the 3,37 MMbpd (2015) were imported from the Middle East and despite this high reliance on the Gulf and presence in the region since the 1950s the self-development ratio of oil in Japan is historically low at only 10-16%. Unlike in other major OECD countries, like France and Italy, there is no distinct integrated national oil champion but rather the industry is vertically and horizontally fragmented and consists of former national oil companies, private oil companies, trading companies and supportive government agencies such as JOGMEC that all display distinct sets of investment priorities, operational experience and relationships with the Japanese and host governments.

Up-to-date literature in English on the Japanese upstream oil industry is limited. This research paper aims to fill this gap to further understanding of the inner workings of the world´s 4th largest oil importer and its limited success so far in acquiring concessions in the Gulf. The paper will provide a country specific overview of Japanese upstream oil activities in the Gulf States, up to date data on recent investments and will also discuss the future trajectory of the industry in the Gulf.

By: Loftur Thorarinsson

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