The exit from Azadegan had painful consequences. At the time, the U.S. had warned METI to make sure China did not end up acquiring the concessions Japan was giving up. Japan initially sold its stake to the National Iranian Oil Company, but the rights were ultimately purchased by the China National Petroleum Corporation.
Sakhalin could turn out the same. Speaking on national broadcaster NHK on March 6, upper house lawmaker Hiroshige Seko, who promoted economic cooperation with Russia as METI minister under former Prime Minister Shinzo Abe, said, «If we leave now, there are countries like China who desperately want liquified natural gas. Those countries will take the gas for cheap.»
METI Minister Koichi Hagiuda agrees. «If a third country immediately takes [the concessions] and Russia does not feel any pain, it’s meaningless,» he told an upper house committee on March 8.
Russia accounts for 8.8% of Japan’s liquefied natural gas imports and 3.6% of its crude oil imports.
«When standing up to Russia, it would be a mistake to give up stable procurement and weaken oneself,» a Japanese official said.
But as was the case in 2010, the criticism METI faced when it withdrew from Azadegan is relevant today: Procurement from countries that are under international sanctions is not a formula for energy security.
Regardless of any immediate decisions, it is becoming clear that Russia cannot serve as a viable alternative for Middle East energy. And as long as Japan is dependent on fossil fuel, it will have difficulty finding a sustainable path forward.
The need to shift to renewable sources and nuclear power looks as imperative as ever.