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for oil. The OPEC countries were all agreed on the
policy of trying to raise prices though there was less
solidarity over other proposals such as for reducing
supplies.
The oil industry was not making a large return on
capital. Costs were high. Diversification of
supplies involved the use of more difficult areas e.g.
the Arctic and off-shore. We knew what escalation
on.
there was likely to be over the next five years. He
though there was a good chance that the agreement would
last.
This suggested that the Middle Eastern countries
were prepared to see the present arrangements carried
The dangers of nationalisation had been reduced.
The physical security of the oil industry had been
improved. The fact that most of the companies had
access to oil in different countries was a safeguard.
There were dangers in direct government-to-government
relations as had been demonstrated by the French
difficulties in Algeria. The ability of the companies
to cooperate would have helped Japan eg by enabling the
Government to get information from the Japanese
companies. We were looking forways of promoting
diversification.
In the short term there was little
that we could do though we could try to increase
stocks.
/
Mr Hirahara agreed generally. Japan
welcomed the OPEC arrangements as ensuring stability of
supply for the next five years, Japan imported
almost all of her oil, 90% from the Middle East. He wished to draw attention to two points: (1) Japan
imported 90% of her oil through the major companies; only 11% came from Japanese companies including those
working with foreign enterprises. Japan needed to
/increase
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