Again, this has nothing to do with the post, but...
I just read a story from the Kyodo News that Ukraine wants Japan to help it explore for natural gas and oil in the Sea of Azov and the Black Sea. By the tone of the article, it seems like Ukraine wants to proceed, but Japan is hesitant. Is that true? If so, why is that?
Mark: The short answer is, I have no idea. I can think of several reasons beyond the usual explanation of a general Japanese aversion of political risk that would explain the reluctance of Japanese investors to go into Ukrainian gas and oil. First, Ukraine is politically unstable. You don’t know that s deal that you cut with, say, Tymoschenko’s people will stick if Yanukovich’s people take over. Second, Ukraine’s troubled relations with Russia can put a third-party investor in Ukrainian oil and gas in a difficult position. Third, Japanese businesses and investors don’t know much about the neighborhood. Add to that the lack of wildcatting resource investors in Japan, and it doesn’t look good for Japanese prospects. The Japanese government getting in on the act (with NEXI and JBIC financing and even JICA resources) can make a big difference, but I suspect that the Japanese government is going to look long and hard at Ukraine’s future with Russia before it takes a plunge in a big way.
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Again, this has nothing to do with the post, but...
I just read a story from the Kyodo News that Ukraine wants Japan to help it explore for natural gas and oil in the Sea of Azov and the Black Sea. By the tone of the article, it seems like Ukraine wants to proceed, but Japan is hesitant. Is that true? If so, why is that?
Mark: The short answer is, I have no idea. I can think of several reasons beyond the usual explanation of a general Japanese aversion of political risk that would explain the reluctance of Japanese investors to go into Ukrainian gas and oil. First, Ukraine is politically unstable. You don’t know that s deal that you cut with, say, Tymoschenko’s people will stick if Yanukovich’s people take over. Second, Ukraine’s troubled relations with Russia can put a third-party investor in Ukrainian oil and gas in a difficult position. Third, Japanese businesses and investors don’t know much about the neighborhood. Add to that the lack of wildcatting resource investors in Japan, and it doesn’t look good for Japanese prospects. The Japanese government getting in on the act (with NEXI and JBIC financing and even JICA resources) can make a big difference, but I suspect that the Japanese government is going to look long and hard at Ukraine’s future with Russia before it takes a plunge in a big way.
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