Cablegate: Japanese Morning Press Highlights 08/26/09

VZCZCXRO0983
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1962/01 2380031
ZNR UUUUU ZZH
P 260031Z AUG 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 5713
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 8413
RUEHFK/AMCONSUL FUKUOKA 6081
RUEHOK/AMCONSUL OSAKA KOBE 9890
RUEHNAG/AMCONSUL NAGOYA 3493
RUEHKSO/AMCONSUL SAPPORO 6594
RUEHBJ/AMEMBASSY BEIJING 0621
RUEHUL/AMEMBASSY SEOUL 7284
RUCNDT/USMISSION USUN NEW YORK 6910

UNCLAS SECTION 01 OF 12 TOKYO 001962

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08/26/09

Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

North Korea problem:
4) Ambassador Goldberg meets Foreign Ministry's Deputy General Saiki
on North Korea issues (Nikkei)
5) Goldberg, Saiki confirm that sanctions on North Korea are
effective (Yomiuri)
6) 67% of election candidates approve of full sanctions against
North Korea (Sankei)

7) Another former Foreign Ministry official admits to "secret pact"
on nuclear transit (Yomiuri)

Political affairs:
8) Asahi-Tokyo University joint survey of election campaign finds
LDP relying on organizational power; DPJ stressing ability to govern
(Asahi)
9) Voters are skeptical about polls showing DPJ will pick up 300
seats in the Lower House election (Tokyo Shimbun)
10) Impact of 300-seat win predictions for the DPJ could affect the
outcome of the race (Tokyo Shimbun)
11) Hatoyama Cabinet to be formed immediately after election
(Sankei)
12) Ichiro Ozawa may stay on as DJP vice president (Tokyo Shimbun)

13) Ozawa blasts Nokyo (farm cooperatives) in the campaign (Yomiuri)

14) Ozawa's influence in the DPJ is growing (Tokyo Shimbun)

15) Japanese companies about to clinch deal for oil rights in Iraq
(Yomiuri)
16) If greenhouse gases cut by 15% by 2020, the additional burden
for households would come to 5 million yen (Nikkei)

Articles:

1) TOP HEADLINES

Asahi:
Japan asked U.S. to keep documents on nuclear-related secret pact
classified in 1999

Mainichi:
Prosecutors plan to exclude people close to defendant as citizen
judges in sex-crime trials

Yomiuri:
Justice Ministry to delay drafting bill aimed at scrapping statute
of limitations in view of DPJ's moves

Nikkei:
Toyota to cut output capacity 1 million units worldwide

Sankei:
Shock of reducing greenhouse gas emissions by 30 percent (Part 1):
DPJ plan designed to increase the financial burden per household by
360,000 yen

TOKYO 00001962 002 OF 012

Tokyo Shimbun:
DPJ Deputy President Ozawa to remain in post; Hatoyama begins
mulling over lineup of new administration

Akahata:
Nation needs a leap of JCP, the "constructive opposition party"

2) EDITORIALS

Asahi:
(1) 2009 general election: Solid pension system essential
(2) Supreme Court justices must be reviewed openly

Mainichi:
(1) 2009 Lower House election: Horizontal relationships must be
reset in growth strategy
(2) Lower House election: Medical system on verge of collapse relies
heavily on current working generation

Yomiuri:
(1) China, Asia policy vital part of election debate
(2) South-North dialogue: Strict sanctions essential until the North
abandons its nuclear program

Nikkei:
(1) 2009 Lower House election: Setback of postal reform too costly
for nation
(2) Public needs information on flu vaccines

Sankei:
(1) Policies most important in election
(2) Postal privatization must continue

Tokyo Shimbun:
(1) 2009 Lower House election: Times require reform of relationship
between lawmakers and bureaucrats
(2) False news report: Restoring public trust a challenge

Akahata:
(1) Time to pick the party that will provide childrearing support

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, August 25

NIKKEI (Page 2) (Full)
August 26, 2009

08:31
Attended cabinet meeting at Kantei.

09:12
Met U.S. Ambassador Roos.

10:24
Voted absentee ballot in Chiyoda Ward, Tokyo.

10:56
Left JR Tokyo Station on Komachi 15.

12:36
Arrived at JR Sendai Station.

TOKYO 00001962 003 OF 012

12:40-
Delivered speeches Sendai City.

14:44
Left JR Sendai Station on Max Yamabiko 118.

16:29
Arrived at JR Omiya Station.

16:58
Left JR Omiya Station on Toki 335.

17:10
Arrived at JR Kumagaya Station. Delivered speech in front of the
station.

18:25
Delivered speech in Higashi-Matsuyama City, Saitama Prefecture.

19:31
Delivered speech in Kawagoe City.

20:53
Arrived at his official residence.

NORTH KOREA PROBLEM

4) Japan, U.S. reaffirm cooperation on N. Korea policy

NIKKEI (Page 2) (Full)
August 26, 2009

Visiting U.S. State Department Coordinator Goldberg (for sanctions
on North Korea) met with the Foreign Ministry's Asian and Oceanian
Affairs Bureau Director General Akitaka Saiki, and the two officials
confirmed that Japan and the United States would continue to
cooperate to implement sanction measures against North Korea. They
took the position that the sanctions taken so far were having a
"considerable impact" on North Korea. In addition, they also agreed
that it would be necessary to carefully determine the real meaning
of North Korea's recent dialogue-oriented moves.

Before his visit to Japan, Goldberg visited Singapore, Thailand, and
South Korea. Goldberg, in his meeting with Saiki, assessed the
situation, saying: "Generally speaking, all these countries are
satisfied with the implementation of a resolution adopted at the
United Nations Security Council."

North Korea has recently been accelerating its moves toward talks.
In this regard, Goldberg and Saiki confirmed that the recent
phenomenal events and the efforts made by the countries concerned
toward the denuclearization of North Korea must not be mixed up.

South Korea's Hyundai Group and North Korea have agreed to resume
sightseeing tours of Mt. Kumgang. "We will respect the South Korean
government's decision," Saiki said. "But," he added, "the
international community will watch how the foreign currency earned
will flow, and how the money will be used."

5) MOFA official Saiki, U.S. Coordinator for Implementation of DPRK
Sanctions Goldberg agree that sanctions have been effective

TOKYO 00001962 004 OF 012

YOMIURI (Page 2) (Full)
August 26, 2009

Akitaka Saiki, director general of the Asian and Oceanian Affairs
Bureau, Ministry of Foreign Affairs, met U.S. State Department
Coordinator for the Implementation of UNSC Resolution 1874 Philip
Goldberg at the ministry on August 25. They agreed that the UN
Security Council resolution imposing sanctions against North Korea
has been very effective.

Goldberg visited Thailand and other Southeast Asian countries before
coming to Japan. He said that "the implementation of sanctions in
these countries is generally satisfactory." Saiki explained the
circumstances that led to the special measures law on cargo
inspection against North Korea being scrapped in the previous Diet
session.

Saiki and Goldberg also discussed the agreement between the DPRK and
the South Korean Hyundai Group to resume the Kumgang-san tourism
project and other business transactions and agreed that the flow of
funds after the resumption of business activities should be watched.
The two also exchanged views on the DPRK's recent diplomatic moves,
such as its dispatch of a delegation to extend condolences at former
South Korean President Kim Dae Jung's funeral.

"We should not be unsettled (by the DPRK's recent moves)," Saiki
told reporters after the meeting. "The most important thing is that
North Korea should take action in accordance with its pledge at the
Six-Party Talks to abandon nuclear weapons."

6) Poll: 67.2% of candidates back all-out sanctions against N.
Korea

SANKEI (Page 3) (Abridged)
August 26, 2009

The families of Japanese nationals abducted to North Korea and their
supporters conducted a questionnaire survey of all candidates
running in the upcoming general election for the House of
Representatives. According to its findings released yesterday, 67.2%
said Japan should invoke all-out sanctions against North Korea. In a
previous survey taken at the time of the last election for the House
of Representatives, 45% said "yes" when asked if Japan should impose
economic sanctions. The pro-sanctions figure this time was
substantially higher than the figure for the last survey. The
response rate also rose 1.3 points to 77.4%, showing high interest
among the candidates. The survey was conducted of all candidates
totaling 1,374 running in single-seat constituencies or up for
proportional representation. Answers were obtained from 1,063 by
Aug. 24.

In the survey, three questions were asked. One of the three
questions was: "Do you think the abduction issue is a matter of top
priority?" In response to this question, 87.3% answered "yes," with
only 0.2% saying "no" and 12.5% giving other answers. When asked
whether all-out sanctions should be invoked against North Korea,
"yes" accounted for 67.2%, with "no" at 15.0% and "other answers"
accounted for 17.9%. The third question was: "The government takes
the position that Japan cannot normalize diplomatic relations with
North Korea as long as the abduction issue is not resolved. Do you
support this policy course?" To this question, 94.0% answered "yes,"

TOKYO 00001962 005 OF 012

with 2.4% saying "no" and 3.6% giving other answers.

7) Plaintiffs suing for disclosure of documents relating to alleged
secret agreement during Okinawa's reversion to subpoena ex-MOFA
official in court case

YOMIURI (Page 38) (Full)
August 26, 2009

Hearings for the lawsuit in which former Mainichi Shimbun reporter
Takichi Nishiyama, 72, and other plaintiffs filed a complaint that
the government's decision not to disclose documents relating to the
"secret agreement" on negotiations for the reversion of Okinawa to
Japanese administration in 1972 was illegal took place at the Tokyo
District Court on August 25. The plaintiffs applied for a subpoena
to summon Bunroku Yoshino, 91, director general of the North
American Affairs Bureau of the Ministry of Foreign Affairs (MOFA) at
that time. Justice Norihiko Sugihara said that with the foreign
minister's approval, Yoshino will be accepted as witness, and his
questioning has been scheduled for December 1.

The plaintiffs also submitted to the court a written statement by
Yoshino saying that, "The initials 'BY' on the memorandum
constituting the secret agreement are definitely mine. Even secret
negotiations should be made public after a certain period of time."
Yoshino has admitted the existence of this "secret agreement" during
interviews with Yomiuri Shimbun and other media outlets.

POLITICAL AFFAIRS

8) Poll: Candidates not counting on their party leaders

ASAHI (Page 1) (Abridged)
August 26, 2009

The Liberal Democratic Party is trying to consolidate its supporters
and local organizations in its campaign for the upcoming general
election for the House of Representatives. Meanwhile, the Democratic
Party of Japan is making an appeal on its "competence to run the
government." In the run-up to the general election, LDP and DPJ
candidates are fighting campaign battles in their own ways. There
are such differences between the campaign strategies of the two
parties' respective candidates, the Asahi Shimbun found from its
survey of candidates with Tokyo University Professor Masaki
Taniguchi's office. Few LDP and DPJ candidates are putting forth
their party leaders, and they do not count on their party heads in
the election campaign.

In the survey, candidates were asked to choose what they would
regard as most important other than policies in campaigning for the
election this time. The choices given for this question were: 1)
working on usual supporters and organizations; 2) stressing past
results; 3) emphasizing governing competence; 4) emphasizing the
leader's qualification; and 5) the candidate's own results and
qualification.

Among LDP candidates, 48% chose to work on their usual supporters
and organizations, topping all other answers. Among DPJ candidates,
44% picked governing competence. As seen from these figures, the LDP
is attempting to keep their supporters in the wind blowing against
it, with the DPJ trying to wipe off the public's uneasy feelings
about a change of government.

TOKYO 00001962 006 OF 012

9) Reports that the DPJ will win 300 seats seem unreal to voters

TOKYO SHIMBUN (Page26) (Abridged)
August 26, 2009

Katsumi Sekiguchi

The Aug. 30 House of Representatives election with all 480 seats
being contested is only four days away. Major newspapers have
headlined the results of their opinion polls that predicted the
Democratic Party of Japan (DPJ) would garner over 300 seats -
greater than the 296 seats the Liberal Democratic Party (LDP) won in
the election four years ago thanks to the "Koizumi boom." What do
the voters think of the DPJ's lead? I interviewed voters in Tokyo's
Shimbashi, a district of salaried workers.

"I am sure the DPJ will achieve an overwhelming victory," a
36-year-old company employee of Chiba City noted as if to say that
the DPJ will garner 300 seats without doubt. He added: "It is not
that the voters are actively supporting the DPJ; they just don't
want to vote for the LDP which has replaced the prime minister one
after another."

"I will vote for the DPJ," a 29-year-old part-time worker declared,
while indicating that the figure (300) does not seem real to her.
She also said: "Under the single-seat system, one vote can make the
decisive difference, and the DPJ could become the sole winner. I
wonder if the voters are backing the DPJ strong enough to give it
more than 60 percent of the Lower House seats and to make (DPJ
President Yukio) Hotoyama the new prime minister. (The figure) is
somewhat scary."

Meanwhile, a 68-year-old unemployed man of Nerima Ward said: "I will
vote for the LDP as before. The LDP is most stable as a political
party." While showing some understanding to the DPJ trend by citing
people who are struggling to make ends meet under the LDP
administration, he also commented: "Anyone casting his ballot based
on the trend means that he has not learned anything from the Koizumi
boom. I want to make my presence felt (by joining the minority)."

A large number of voters -- 1.5 times the number of the previous
Lower House election -- cast absentee ballots ahead of the Aug. 30
poll. This time around, the mountain could move. What are the views
of experts?

"There are always differences between the results of pre-election
polls and the actual election results," Hiroshi Miura, an election
planner, noted. "Some 20 percent of people who said they would vote
will not go to the polling stations. I think 90 percent of those
people said they will vote for the DPJ, and naturally support for
the DPJ will drop from the results in polls."

Voter turnout holds a key. In the previous "postal election," voter
turnout was 67.51 percent. Seventy percent is the watershed for the
DPJ to garner 300 seats.

Akikazu Hashimoto, a former professor at the National Graduate
Institute for Policy Studies, who is well-versed in the voting
behavior, took this view about the prediction that the DPJ will win
300 seats: "Overwhelmingly backed by swing voters, in addition to
the traditional DPJ supporters, the party will garner some 260

TOKYO 00001962 007 OF 012

seats. With their backs against the wall, traditional LDP supporters
of all walks of life and of all ages are throwing their support
behind the DPJ across the nation. There are solid grounds for the
figure 300."

10) Effect of "300-seat" prediction for DPJ: Its advantage probably
remains unchanged

TOKYO SHIMBUN (Page 2) (Abridged)
August 26, 2009

It has been reported that the Democratic Party of Japan (DPJ) could
sweep into power by securing more than 300 seats while only about
100 seats would go to the Liberal Democratic Party (LDP) in the Aug.
30 House of Representatives election, based on the results of
surveys conducted by the news media.

News companies conduct surveys to assess the voting pattern about
one week before the voting date of a national election. During the
period between this date and the voting day, the voting pattern
changed in many past elections.

Such survey results bring about two types of effect: The bandwagon
effect favorable for the advantageous party; and the underdog effect
with people, out of sympathy, voting for the party perceived to be
losing the elections.

In the 2005 Lower House election, the bandwagon effect appeared. In
surveys by the media, it was predicted that the LDP would win a
majority independently. The outcome was its historically
overwhelming victory, winning 296 seats, far more than the
majority.

The bandwagon effect also appeared in the 2007 House of Councillors
election, in which the DPJ won a landslide victory in line with
forecasts made by the media.

In the Upper House election in 1998, survey results produced an
underdog effect. In the election, the LDP suffered a crushing defeat
with only 44 seats despite the prediction that the LDP was likely to
secure at least the number of seats up for reelection. Prime
Minister Ryutaro Hashimoto stepped down, taking the responsibility
for the defeat.

Under the mid-sized election district system, the underdog effect
appeared in many Lower House elections. Since the single-seat
constituency system was introduced, however, many voters tend to
cast their ballots for candidates expected to win so that their
votes will not be wasted. Given this, many observers anticipate that
the survey results will work favorable for the DPJ in the upcoming
election.

11) Lower House election 2009: DPJ plans to form cabinet soon after
Lower House election

SANKEI (Page 3) (Excerpts)
August 3, 2009

Premised on its victory in the Aug. 30 House of Representatives
election, the Democratic Party of Japan (DPJ) has decided to launch
the work of forming a cabinet immediately after the election. The
DPJ plans to informally pick the prime minister, chief cabinet

TOKYO 00001962 008 OF 012

secretary, finance minister, and foreign minister possibly early
next week; and it will launch an administration transaction team by
these cabinet ministers. This was revealed by senior party members.
However, the Social Democratic Party (SDP) and the People's New
Party (PNP), which are expected to participate in a DPJ-led
coalition government, are expected to raise objections toward the
DPJ's moves. The DPJ has already carried out a thorough background
check, centering on those who will likely be appointed key posts.

Hatoyama, who will be elected prime minister in a special Diet
session after the Lower House election, is expected to serve as
chair of the administration transaction team. Hatoyama has stated
that he will pick Diet members to serve as chief cabinet secretary,
finance minister, and justice minister. He is set to informally
appoint these three ministers before a new administration is
inaugurated.

The transition team is also expected to discuss the selection of
members of a National Strategy Bureau, which will devise basic
policies for budget compilation and foreign and national security
policies that the DPJ considers the main policies for the new
government, as well as of an Administration Renovation Council,
which will be in charge of a drastic review of government projects
that have been criticized for wasting tax money.

The DPJ will form the framework of a new cabinet prior to the prime
minister's election so that it can smoothly conduct transaction
work. The purpose is to highlight the fresh image of the new
administration.

However, it is indispensable for the DPJ to hold discussion with the
SDP and PNP on the formation of a coalition government before the
inauguration of a formal government. Therefore, the SDP and PNP may
react negatively to the DPJ's moves.

The DPJ are conducting the background check on about 200 people who
may be serving in important posts.

12) Ozawa likely to continue serving as DPJ deputy head

TOKYO SHIMBUN (Top play) (Full)
August 26, 2009

With his party's victory in the Aug. 30 House of Representatives
election in mind, Democratic Party of Japan (DPJ) President Yukio
Hatoyama has started selecting the lineup of a DPJ administration.
Hatoyama is determined to keep Deputy President Ichiro Ozawa in his
current post and let him continue leading national elections. By
doing so, Hatoyama aims to make preparations for next summer's House
of Councillors election as early as possible.

Ozawa has been responsible for picking candidates for the Lower
House election and formulating the party's action policy. He is
deputy prime minister of the DPJ's Shadow Cabinet.

If Ozawa becomes a cabinet member, he will have to attend Diet
sessions. If so, Ozawa will be certain to be pursued by opposition
parties at the Diet because the first trial of his secretary, who
has been indicted over allegations that he received illegal
donations from Nishimatsu Construction Co., is expected to be held
after the Aug. 30 general election. This could become an obstacle to
Hatoyama's management of Diet affairs.

TOKYO 00001962 009 OF 012

Hatoyama, therefore, is inclined to have Ozawa concentrate on party
business so that he will be able to continue exercising his campaign
skills in next summer's Upper House election, without appointing him
as a cabinet member.

Hatoyama has said: "In order to maintain the DPJ's unity, I would
like him to serve in a key party post." It is believed that Hatoyama
will appoint Naoto Kan, another deputy president, as key cabinet
member, and he will retain Secretary General Katsuya Okada in his
post or name him as a key cabinet minister.

It also appears to be certain that Supreme Adviser Hirohisa Fujii
will be appointed to a key government post and that Policy Research
Council Deputy Chairman Akira Nagatsuma will be named minister in
charge of pension affairs.

13) DPJ's Ozawa criticizes agricultural cooperatives for opposing
FTA with U.S.

YOMIURI (Page 4) (Full)
August 26, 2009

Democratic Party of Japan Deputy President Ichiro Ozawa criticized
the Central Union of Agricultural Cooperatives (Zenchu) and other
agricultural groups opposing a free trade agreement (FTA) with the
United States before reporters in Kimitsu City, Chiba Prefecture on
August 25. "We are saying that we will set up a system under which
producers will be able to produce under any circumstances," he said.
"There is nothing to worry about. Zenchu and the other agricultural
groups have become bureaucratic. There is no need to pay any
attention to them." He added, "I am sure that the farmers and
producers will fully understand our position and give us support."

When the Democratic Party of Japan drafted its manifesto (campaign
pledges), it had at first called for the "conclusion" of an FTA with
the U.S., but later revised this to "promoting negotiations" for an
FTA in light of the opposition to the agreement. Ozawa has been
voicing his displeasure about this.

14) Ozawa likely to have stronger say in DPJ

TOKYO SHIMBUN (Page 2) (Full)
August 26, 2009

Democratic Party of Japan (DPJ) has decided to have Deputy President
Ichiro Ozawa take responsibility for election strategy even after a
change of government takes place. If the party wins an overwhelming
victory in the Aug. 30 House of Representatives election, a number
of "Ozawa children" will be born, and Ozawa will eventually have a
more sizable influence in the party. If his influence becomes strong
enough to affect the party's policymaking, the new government might
be operated under a dual-power structure, although the DPJ aims to
unify ruling party and government.

Ozawa visited the offices of 12 DPJ-backed first-time candidates in
the Chiba No. 11 and No. 12 constituencies and the Japan
Agricultural Cooperatives (JA) in these districts yesterday. He told
the candidates while shaking hands with them with a smile: "You are
neck-and-neck with your rivals in the election campaign. Continue to
work hard during the remaining five days."

TOKYO 00001962 010 OF 012

President Yukio Hatoyama, Deputy President Naoto Kan, and Secretary
General Katsuya Okada have been responsible for delivering stump
speeches, while Ozawa has devoted himself to helping behind the
scenes. In the process of selecting candidates to run under the
proportional representation segment, Ozawa picked out new faces
prior to the official announcement of the election. After the
official campaign started, he has earnestly visited the election
offices of DPJ candidates to encourage them and industrial
organization to seek their support.

Asked about what post he wants to assume after the Lower House
election, Ozawa said: "I have nothing special. My desire is to bring
about a change of government and have parliamentary democracy take
root in Japan. I will be satisfied if this goal is attained."

Hatoyama wants to keep Ozawa as a key official responsible for
election strategy, with an eye on the House of Councillors election
next summer, in which the party aims to win a majority
independently. In the Upper House election in 2007, Ozawa
contributed to forcing the ruling coalition into a minority. As it
stands, he has a reputation as an election strategist.

In addition to the Ozawa children who were born in the 2007 Upper
House election, who have played a certain role in the party, a large
number of first-time candidates backed by Ozawa are likely to go
into the Diet. Should Ozawa also take the initiative in fielding
candidates in the Upper House election next year, the Ozawa group
will expand further.

Since many senior party members will join the cabinet if the DPJ
takes over the reins of government, Ozawa will eventually hold real
power in the party. Concern is expected to rise in the party that
Ozawa might have a stronger voice not only on election strategy but
even on the handling of the government.

15) Iraqi oil fields: Memorandum for Japanese companies to secure
business interests to be signed as early as next month; ENEOS making
final adjustments

YOMIURI (Page 8) (Abridged slightly)
August 26, 2009

Talks between three Japanese companies, including Nippon Oil
Corporation (ENEOS), the largest primary oil distributor (in Japan),
and the Iraqi government over business interests in the Nasiriyah
oil field in southern Iraq have entered the final phase. Only a few
issues, such as fund-procurement quotas, remain to be settled. If
the talks go smoothly, executives of the three companies will visit
Iraq as early as September to sign a memorandum.

The three Japanese companies are Inpex Corporation (INPEX), a
leading oil field developer, and JGC Corporation, a major plant
engineering firm, as well as ENEOS.

The plan is for those companies to undertake the development of a
portion of the mine lots in the Nasiriyah oil fields. Output of
150,000 barrels a day is expected in the first two years, and then
the amount will be gradually increased to 600,000 barrels, which is
equivalent to more than 10 percent of Japan's daily crude oil
consumption. The Japanese consortium involving three companies has
been competing with Italy's Ente Nazionale Idrocarburi (ENI) and a
major Spanish resources company. Iraq had effectively narrowed the

TOKYO 00001962 011 OF 012

candidates down to the Japanese consortium by the end of June.

The Iraqi government then pressed ahead with negotiations on terms
and conditions with Japan, while once again involving ENI. Iraq has
now entered the final phase of talks on the methods for setting
crude oil prices and Japanese companies' collection of loaned
money.

The Japanese companies plan to boost the ratio of procurement of
crude oil for domestic consumption from independently developed oil
fields from the present 19 percent or so to 40 percent by 2030. If
all output from the Nasiriyah oil field -- 600,000 barrels a day -
is exported to Japan, such a ratio will rise to 33 percent. As a
result, the project in the Nasiriyah oil field will have great
significance for Japan's energy security.

Mitsui & Co. also secures right to tender bid

It was learned on August 25 that Mitsui Oil Exploration, a
subsidiary of Mitsui & Co., has obtained a right to take part in the
second bidding for the development of oil fields and gas fields in
Iraq to be held as early as the end of this year. The planned tender
targets 14 oil fields, including a major one with daily output
between 600,000 barrels and 800,000 barrels, and two gas fields. Up
to six Japanese companies will likely take part in the bidding. This
is a separate project framework from the development of the
Nasiriyah oil field, for which talks on business interests are
underway, based on a face-to-face meeting formula. Among Japanese
companies, ENEOS, INPEX, Japan Petroleum Exploration (JAPEX),
Mitsubishi Corporation, Japan Oil, Gas, Metals, National Corporation
(JOGMEC) have obtained to a right to tender bids.

16) Up to 5 million yen to be shouldered by household budget if
global warming greenhouse gas emissions are to be cut 15 percent by
2020

NIKKEI (Page 1) (Full)
August 26, 2009

The Ministry of Economy, Trade and Industry (METI) on August 25
finalized a set of concrete measures to achieve a mid-term goal of
cutting greenhouse gas emissions 15% in comparison with the 2005
level by 2020. The package includes conditions to attain such a
goal, including 80 percent of newly-built houses meeting the
strictest energy-conserving standards and raising the proportion of
next-generation vehicles, such as hybrid vehicles, to the number of
brand-new cars to be sold to about 50 percent. METI estimated that
if households adopt all proposed measures, it would cost each
household an additional 5 million yen or so.

The package was presented at a meeting of the supply-demand
subcommittee of the resources and energy research council, an
advisory panel reporting to the METI minister. Since Japan's carbon
emissions in 2005 stood at approximately 1.35 billion tons, it is
necessary to cut roughly 200 million tons in order to achieve the
goal of a 15 percent emissions cut. According to METI-proposed
measures, 38 million tons will be cut by the introduction of
energy-conserving housing and office buildings, 21 million tons by
the dissemination of next-generation vehicles and 17 million tons by
the dissemination of energy-saving home electronics. The package
also calls for raising the proportion of newly-built houses that
meet the strictest energy-conserving standards from the current 40

TOKYO 00001962 012 OF 012

percent or so to 80 percent and turning all home electronics
purchased by consumers into energy-conserving types.

METI also estimated the additional burden to be shouldered by
households, in the event they introduce a set of measures to cut
greenhouse gas emissions. The government is already distributing
approximately 200,000 yen in standard subsides for the purchase of
home appliances. Apart from this, METI estimated 2.3 million yen for
the installation of solar panels and 1 million yen for heat
insulation work to make houses an energy-conservation type, etc.,
totaling roughly 5 million yen. It would cost about 30 million yen
to apply these measures to a small-size office building with area of
1,000 square meters.

The DPJ advocates a goal of cutting 25 percent from the 1990 level
or 30 percent from the 2005 level, which is stricter than the
government's goal. Chances are that if a change of administration
occurs, financial burden on households would increase.

ROOS

© Scoop Media