A Comparative Study of Licensing and Concession Systems
Edited by Tina Hunter
Chapter 11: Licensing and regulation of Japan’s offshore resources
Procurement of petroleum has always been a critical issue in the modern history of Japan. Soon after opening up the country to the world in the mid-19th century, the demand for paraffin oil increased due to the penetration of imported oil lamps. In the 20th century, as the primary energy source shifted from coal to petroleum, the Japanese government attempted to promote production of petroleum through public funding of operators in the upstream sector. After the oilfields overseas were all lost as a result of the defeat in the Second World War, the government and industry of Japan again made various attempts to secure interests in the upstream of the petroleum industry. Still, the regulatory regime remained relatively underdeveloped. The Mining Act, applicable to mining of various kinds of minerals, also includes the exploration for and production of petroleum. It was only in 2011 that amendments to the Mining Act established a special regime for petroleum and other important minerals. The introduction of the new regime was motivated, among others, by the intent to promote exploration of petroleum (as well as other resources, such as undersea minerals) within the Exclusive Economic Zone (EEZ) and on the Continental Shelf. In this chapter, the Japanese regulation of the upstream petroleum sector having just entered a new phase is analyzed, with some insights into the historical background. First, a brief overview of the history of petroleum production and the relevant regulation is given.
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