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The Globe & Mail: Japan cautions against resource nationalism

OSAMU TSUKIMORI AND KENTARO HAMADA
Reuters
August 28, 2007 at 7:11 AM EDT

TOKYO — Japan’s trade minister said Kazakhstan’s move this week to suspend work on the huge Kashagan oil field echoed Russia’s row over the Sakhalin-2 oil project and he cautioned against the spread of global resource nationalism.

Akira Amari, who was reappointed on Monday as Minister of Economy, Trade and Industry, said on Tuesday he would investigate the Kazakh authorities’ freezing of Italy’s Eni-led development of the Caspian Sea site, the world’s biggest oil find in decades, on mainly ecological grounds.

The move recalled Russia’s dispute with Royal Dutch Shell, which ended with the oil giant losing control of a major oil field to the Russian state gas monopoly last year.

Japanese oil developer Inpex Holdings Inc. has said it hopes to keep its 8.3 per cent stake in the Kashagan field.

Current high oil prices have made resource nationalism more attractive to producing countries around the world.

“It would not be good if a situation like Sakhalin became common,” Mr. Amari told a group of reporters in an interview.

He said that a contract, if not fulfilled, cannot be called a contract and there was nothing more important than credibility in economic transactions.

“Development of legal systems to back that up heightens nations’ credibility and fosters investment, and I want the nations with resources to understand that.”

Referring to indefinite shutdown of Tokyo Electric Power Co.’s (TEPCO) Kashiwazaki-Kariwa nuclear plant in northwestern Japan, caused by a major July earthquake, Mr. Amari said he had no schedule yet for the plant’s restart.

TEPCO, Asia’s biggest utility, has been struggling to meet soaring electricity demand during a summer heat-wave since the nuclear plant, the world’s largest by capacity, was shut down.

“Inspections of the nuclear reactors are being carried out, and we will allow operations at the facility to resume starting with those units which are found to have no problems,” the minister said.

http://www.reportonbusiness.com/servlet/story/RTGAM.20070828.wjapanresources0828/BNStory/robNews/home

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