TALKING PAPER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00551R000200140028-3
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: December 21, 2016
• Document Release Date: July 28, 2008
• Sequence Number: 28
• Content Type: REPORT

Approved For Release 2008/07/28: CIA-RDP83B00551R000200140028-3
State Dept. review completed
Talking Paper
AYR;\ L.
CONFIDENTIAL
1. Pursuant to the conversation between Foreign Minister Sakurauchi.
and Secretary Haig on March.23, the Government of Japan is requesting
that the Government of the United States give favorable consideration
to the issuance of licenses related to the Sakhalin Oil Development
Project.
2. The Sakhalin Oil Development Project was initiated by the General
Agreement signed between parties in Japan and the U.S.S.R. seven years
ago. Based upon this General Agreement, the Japanese party has so far
provided credit amounting to $161 million (the credit shall be xE(teem-
able when the project becomes successful, to be repaid by means of-pro-
duced oil and/or gas). The exploration activities in the past seven
years resulted in the discovery of significantly promising oil and gas
fields-. Meanwhile, the Japanese-party is obligated to continue explor-
ation activities in 1982 and 1983 in accordance with the above agreement
with the U.S.S.R. In order to continue the said activities and to ful-
fil the obligation under the agreement, export licenses by the Govern-
ment of the United States for the related equipment and services amount-
ing to approximately $2 million are indispensable.
3. The Government of Japan has carefully examined the issue in the
context of measures taken against the U.S.S.R. in relation to the situ-
ation in Poland,p and, on the basis of the following considerations, it
Approved For Release 2008/07/28: CIA-RDP83B00551 R000200140028-3
 Approved For Release 2008/07/28: CIA-RDP83B00551 R000200140028-3
strongly requests that the Government of the United States issue li-
censer for the above-mentioned equipment and services related to the
Project as it did in the previous years.
(1) In the absence of the U.S. licensing, activities under the
Project have to be suspended. This will lead to the situation
in which the U.S.S.R. may cancel the agreement at their own will,.
claiming the failure of the Japanese party to meet its obligation.
Even if the U.S.S.R. does not cancel the agreement, the Japanese
party will not be able to assess the commercial feasibility of
the development of oil and gas without further exploration acti-
vities. In either case, there is a clear possibility that the
Japanese party will have to lose not only the investment already
made but also the two oil and gas fields so far discovered.
T-he--Government of Japan believes that such an eventuality
would only mean that an ally of the United States would be hurt
rather than the U.S.S.R., contrary to the U.S. intentions to
take sanctions against the U.S.S.R.
(2) The Project is an on-going project, the licenses of which
were continuously provided even after the introduction of the
U.S. sanctions against the U.S.S.R. in relation to the Afghani-
stan problem.
Approved For Release 2008/07/28: CIA-RDP83B00551 R000200140028-3