DAILY SUMMARY OF JAPANESE PRESS 07/06/09

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 07/06/09

INDEX:

(1) Poll: Aso cabinet, political parties (Asahi)

(2) Poll on Aso cabinet, political parties (Nikkei)

(3) LDP not making progress in manifesto drafting (Asahi)

(4) DPJ President Hatoyama's donation issue to become new source of
trouble; Ruling camp demands Hatoyama's Diet testimony (Asahi)

(5) Russia to put off concrete proposals on Northern Territories at
bilateral summit, reacting to Japan's claim of "inherent part of our
territory" (Sankei)

(6) U.S. political conflict over continued production of F-22;
Selection of next-generation mainstay fighter in deep disarray;
Domestic defense industry struggling (Nikkei)

(7) Japan likely to acquire rights to develop oil fields in southern
Iraq (Sankei)

(8) Iraq's auction of rights to develop oil, gas fields exposes gaps
in intents between foreign firms and Tehran (Nikkei)

(9) Negotiations with Iraq to secure right to oil field development:
Japan to make all-out effort to revive right to develop oil field on
its own (Sankei)

(10) TOP HEADLINES (Nikkei)

(11) EDITORIALS (Nikkei)

ARTICLES:

(1) Poll: Aso cabinet, political parties

ASAHI (Page 3) (Full)
July 6, 2009

Questions & Answers
(Figures shown in percentage, rounded off. Figures in parentheses
denote the results of the last survey conducted June 13-14.)

Q: Do you support the Aso cabinet?

Yes 20 (19)
No 68 (65)

Q: Which political party do you support now?

Liberal Democratic Party (LDP) 24 (22)
Democratic Party of Japan (DPJ or Minshuto) 25 (29)
New Komeito (NK) 3 (3)
Japanese Communist Party (JCP) 2 (2)
Social Democratic Party (SDP or Shaminto) 1 (1)
People's New Party (PNP or Kokumin Shinto) 0 (0)
Reform Club (RC or Kaikaku Kurabu) 0 (0)
New Party Nippon (NPN or Shinto Nippon) 0 (0)
Other political parties 0 (0)
None 39 (37)
No answer (N/A) + don't know (D/K) 6 (6)

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Q: There will be a general election before long for the House of
Representatives. To what extent are you interested in the
forthcoming general election? (One choice only)

Very interested 38
Somewhat interested 36
Not very interested 20
Not interested at all 6

Q: If you were to vote now in a general election for the House of
Representatives, which political party would you vote for in your
proportional representation bloc?

LDP 22 (23)
DPJ 37 (43)
NK 4 (3)
JCP 4 (3)
SDP 1 (1)
PNP 0 (0)
RC 0 (0)
NPN 0 (0)
Other political parties 1 (1)
N/A+D/K 31 (26)

Q: Which political party's candidate would you like to vote for in
your single-seat constituency?

LDP 22
DPJ 32
NK 2
JCP 2
SDP 1
PNP 0
RC 0
NPN 0
Other political parties 0
Independent candidate 2
N/A+D/K 39

Q: Would you like the current LDP-led coalition government to
continue, or would you otherwise like it to be replaced with a
DPJ-led coalition government?

LDP-led coalition 24 (23)
DPJ-led coalition 47 (52)

Q: Who do you think is more appropriate for prime minister, Prime
Minister Aso or DPJ President Hatoyama?

Mr. Aso 22 (24)
Mr. Hatoyama 42 (42)

Q: Prime Minister Aso has appointed two more cabinet ministers.
However, he has forgone his plan to replace the LDP's executive
lineup due to opposition from within the party. Do you appreciate
this response?

Yes 16
No 68

Q: Some lawmakers in the LDP are seeking to hold an LDP presidential

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election before the general election and to replace Prime Minister
Aso. Is this move in the LDP convincing?

Yes 22
No 65

Q: LDP Election Strategy Council Chairman Koga has asked Miyazaki
Gov. Higashikokubaru to run in the next election for the House of
Representatives from the LDP. What is your impression of the LDP
now?

Improved 7
Worsened 44
Unchanged 47

Q: DPJ President Hatoyama's political fund reports contained false
information about individual donations. He owned up to his
responsibility for overseeing his fund-managing body, saying it was
done at his secretary's own discretion. He has clarified that he
would not resign as DPJ president. Is his response convincing on
this issue?

Yes 27
No 60

Polling methodology: The survey was conducted July 4-5 over the
telephone on a computer-aided random digit dialing (RDD) basis.
Respondents were chosen from among the nation's voting population on
a three-stage random-sampling basis. Households with one or more
eligible voters totaled 1,806. Valid answers were obtained from
1,052 persons (58 PERCENT ).

(2) Poll on Aso cabinet, political parties

NIKKEI (Page 2) (Full)
July 5, 2009

Questions & Answers
(Figures shown in percentage. Parentheses denote findings from the
last survey conducted in June.)

Q: Do you support the Aso cabinet?

Yes 21 (25)
No 72 (65)
Can't say (C/S) + don't know (D/K) 7 (10)

Q: Which political party do you support or like?

Liberal Democratic Party (LDP) 29 (31)
Democratic Party of Japan (DPJ or Minshuto) 37 (37)
New Komeito (NK) 4 (3)
Japanese Communist Party (JCP) 4 (4)
Social Democratic Party (SDP or Shaminto) 2 (2)
People's New Party (PNP or Kokumin Shinto) 1 (1)
Reform Club (RC or Kaikaku Kurabu) 0 (0)
New Party Nippon (NPN or Shinto Nippon) 0 (0)
Other political parties 0 (1)
None 16 (14)
C/S+D/K 7 (7)

(Note) The total percentage does not become 100 PERCENT in some

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cases due to rounding.

Polling methodology: The survey was taken July 3-4 by Nikkei
Research Inc. by telephone on a random digit dialing (RDD) basis.
For the survey, samples were chosen from among men and women aged 20
and over across the nation. A total of 1,455 households with one or
more eligible voters were sampled, and answers were obtained from
843 persons (57.9 PERCENT ).

(3) LDP not making progress in manifesto drafting

ASAHI (Page 4) (Full)
July 3, 2009

Naoyuki Hayashi, Go Yamashita

Efforts in the Liberal Democratic Party (LDP) to draft a manifesto
(campaign pledges) for the House of Representatives election are at
a standstill. Although a small team led by Election Strategy Council
Vice Chairman Yoshihide Suga, a close aide to Prime Minister Taro
Aso, is drawing up a draft behind the scenes, they are unable to
find any dramatic policies to highlight due to the drifting of the
administration. The "anti-Aso forces," which have become impatient,
are also moving to apply pressure. The situation is such that the
very process of drafting the manifesto under the prime minister may
founder.

In a speech on June 30, Suga declared that: "We will put forward
policies on decentralization of power and introduction of the doshu
(regional bloc) system. Security will be a major point of
contention. We will also include (the regulation of) amakudari
(golden parachutes)," enumerating the LDP's "prospective pledges."

A project team led by Suga and consisting of Deputy Secretary
General Nobuteru Ishihara, General Council Deputy Chairman Hajime
Funada, Policy Research Council Deputy Chairman Hiroyuki Sonoda, and
others has been holding meetings behind the scenes. Regulation of
hereditary Diet seats - which is Suga's pet idea -- reduction of the
number of Diet members, and policies to deal with the aging society
and the declining birth rate are also expected to be included.

However, even as the election approaches, the overall picture of the
manifesto remains a mystery. A member of the project team confides
that, "We have thought of many things but are completely unable to
project our differences with the Democratic Party of Japan (DPJ)."
The DPJ is already one step ahead in regulating hereditary Diet
seats and proposing a reduction in the number of Diet seats. With
regard to the prime minister's favorite topic of fiscal resources,
as long as the increase in consumption tax rate is premised on
economic recovery, it will be hard to write a specific date into the
manifesto. "This is the same as the DPJ's, which says there will be
no tax hike in four years," complained the project team member.

Concerned junior members make own suggestions

Under this situation, mid-ranking and junior party members are
becoming increasingly concerned. The "manifesto coalition
conference" consisting of nine groups distancing themselves from Aso
drew up their own draft manifesto on July 2 and asked project team
leader Suga to include their proposals in the party's manifesto.

Their proposed policies include: thorough reform of Kasumigaseki

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(the bureaucracy),improvement of the political culture, including
the reduction of the number of Diet members and regulation of
hereditary Diet seats, decentralization of power to the local
governments, and two other items.

This group is wary of the prime minister's possible plan to dissolve
the Diet at an early date and has insisted that "Diet dissolution
without a manifesto is unacceptable." However, while Suga is saying
that the manifesto will be drafted before the date of the official
declaration of candidacy, he indicated, "You can think of the timing
of Diet dissolution and the manifesto as two separate matters."

The manifesto conference is obviously also trying to pressure the
prime minister. However, each group is keeping a different distance
from Aso, so their future course of action is still undecided.

(4) DPJ President Hatoyama's donation issue to become new source of
trouble; Ruling camp demands Hatoyama's Diet testimony

ASAHI (Page 2) (Full)
July 3, 2009

The individual donation fabrication scandal involving Democratic
Party of Japan (DPJ) President Yukio Hatoyama's fund management
organization has created a commotion. While the ruling parties have
called for testimony by Hatoyama as a Diet witness, the other
opposition parties have increased their criticism of Hatoyama. With
an eye on the next House of Representatives election, some in the
DPJ are now concerned that the situation will take a turn for the
worse.

JCP, DPJ criticize Hatoyama

In a meeting on July 2 of the Lower House Special Committee on
Political Ethics Establishment and Revision of the Public Offices
Election Law, the ruling parties demanded that Hatoyama be called to
testify as a Diet witness, arguing that Hatoyama's political fund
management "is extremely corrupt." The DPJ, however, said that it
would not accept the ruling coalition's demand, criticizing the
committee chairman from the ruling camp for having decided to hold
deliberations on July 3 by virtue of his office, as "oppressive." In
a meeting of the Lower House Budget Committee, the Liberal
Democratic Party (LDP) proposed to the DPJ that intensive
discussions be held on July 6 regarding the issue of "politics and
money." But the DPJ refused to accept the proposal.

Nobutaka Machimura, an LDP member and former chief cabinet
secretary, said in a meeting on July 2 of his faction: "That's a
kind of political fund laundering. (Hatoyama) should resign as party
head." Former Finance Minister Sadakazu Tanigaki criticized Hatoyama
in a meeting of the Koga faction, saying: "The DPJ is tough on other
parties but lenient on itself."

The ruling camp wants to recover from its setbacks by taking up the
Hatoyama issue.

With Lower House dissolution drawing closer, there is a possibility
that the approval rating for the Aso cabinet will drop further as
the Aso administration is in turmoil with Aso's decision to give up
on his attempt to shuffle the LDP executive lineup. Although Aso is
looking into the possibility of dissolving the Lower House soon
after the July 12 Tokyo Metropolitan Assembly election, many

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lawmakers in the ruling camp are opposed to an idea.

The DPJ has taken a position that Hatoyama fulfilled his
accountability at a press conference on June 30. The DPJ intends to
dodge the ruling coalition's pursuit of Hatoyama, with Secretary
General Katsuya Okada saying: "The aim is to turn the election to
its advantage." However, other opposition parties also have
criticized the DPJ's stance.

Japanese Communist Party (JCP) Chairman Kazuo Shii told reporters on
July 2: "(Hatoyama) has not explained why his fund management body
committed wrongdoings and where the money came from." Social
Democratic Party (DPJ) Chairperson Mizuho Fukushima also said: "As
for the (anonymous) donations of less than 50,000 yen, insufficient
explanations have not been provided."

Meijo University Prof. Nobuo Gohara, who served as chairman of the
third-party committee the DPJ set up to investigate the illegal
donation scandal involving Nishimatsu Construction Co., told the
press corps on July 2 in Tokyo: "The DPJ should set up an
investigative committee to seek the truth objectively."

Some in the DPJ are wary of how the issue will turn out, with a
junior lawmaker saying: "The fact that the money issues involving
two party leaders were discovered will have a serious impact on the
party. Unless the issue is resolved as quickly as possible, the
situation might take a turn for the worse."

(5) Russia to put off concrete proposals on Northern Territories at
bilateral summit, reacting to Japan's claim of "inherent part of our
territory"

SANKEI (Page 2) (Full)
July 6, 2009

It was learned on July 5 that Russian President Dmitriy Medvedev is
likely to put off making specific proposals at the July 9 summit
meeting with Japan in Italy that would lead to progress on the
Northern Territories issue. The excuse that will be used will be
statements in Japan after Premier Vladimir Putin's May visit to
Japan about "Russia's illegal occupation" of the islands and claims
that they are an "inherent part of Japanese territory." Medvedev
will explain that his reason for not making any proposals is that
the conditions for making progress in this issue are still not ripe.
The question now is how far Prime Minister Taro Aso can draw out a
response from Medvedev at the summit meeting.

Coordination has been underway for the meeting to take place for
around one hour in the morning of July 9 (afternoon of the same day,
Japan time) in L'Aquila, where the G-8 Summit is being held.

When the two leaders last met in Sakhalin (Karafuto) last February,
they had confirmed their intention to step up work on a "new
original and unconventional approach" on the territorial issue. At
that time, Aso pressed Medvedev by saying: "Unless there is an
intention to work for concrete progress, there can be no building of
a partnership," showing his strong desire to resolve the territorial
dispute.

When Putin came to Japan in May, he told Aso that: "The president is
prepared to talk in detail at the summit meeting in July. All
options for resolving the territorial issue will be discussed."

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However, the Russian side has criticized Aso's statement to the Diet
in May that "Russia's illegal occupation continues" on the Northern
Islands. On June 22, Sergei Naryshkin, chief of staff of the Russian
Presidential Office, has warned Aso that, "It is important to have
discussions in a quiet atmosphere." Russia has also said that it
"cannot afford to be indifferent" (Sergey Mironov, speaker of the
Federation Council) to the enactment of the amended Law on Special
Measures for the Promotion of a solution to the Northern Territories
Issue designating the Northern Territories as an "inherent part of
Japanese territory."

Since Aso is said to "get along well" (senior Ministry of Foreign
Affairs (MOFA) official) with Medvedev, he would like to find some
sort of a key to a solution through this personal relationship. The
Japanese side is critical of the present Russian offensive. A senior
MOFA official noted, "Citing something trivial to put off a solution
is a usual Russian tactic."

On the part of Russia, it has already made certain achievements
regarding the economy and development in the Far East and Eastern
Siberia through Putin's meeting with Aso in May. Therefore, it does
not need to press Japan for further economic cooperation using the
territorial issue as leverage.

Furthermore, it is also possible that Russia is taking Aso lightly
since his administration is now in weakened state.

(6) U.S. political conflict over continued production of F-22;
Selection of next-generation mainstay fighter in deep disarray;
Domestic defense industry struggling

NIKKEI (Page 2) (Abridged slightly)
July 6, 2009

Work to select the AIR Self-Defense Force's next-generation mainstay
fighter jet (FX) is becoming increasingly chaotic. The disarray
results from the fact there are no bright prospects for the future
of the ongoing political conflict in the United States over the F-22
state-of-the-art stealth fighter, which the Japanese government is
eager to procure. Japan will have to wait for a U.S. decision. With
the suspension of F-22 production approaching, the Japanese defense
industry is begging for an early decision for the sake of
maintaining the aircraft's production line and know-how.

& Congress seeking ways to export to Japan

Equipped with radar-evading stealth technology and the ability to
sustain supersonic flight, the F-22 is the strongest fighter jet in
the world. The United States has a domestic law (Obey Amendment)
that prohibits the exports of high-level military technologies. The
U.S. Department of Defense announced in April that it will suspend
the procurement of F-22s to curb the nation's defense spending,
dashing the Japanese government's hopes of purchasing the aircraft.

In late June, the United States included in its fiscal 2009
supplementary budget costs for the continued procurement and
production of the F-22. A provision specifying a plan to look into
the possibility of allowing exports to Japan has also been
incorporated in the National Defense Authorization Act for Fiscal
Year 2010. Out of consideration for the defense industry and for the
aim of securing jobs, the U.S. Congress has come up with the option

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of exporting F-22s to Japan, according to a senior Defense Ministry
official. Japan has apparently been given another chance to procure
the aircraft.

& Inseparable from Middle East policy

Nevertheless, given the Obama administration's determination to
suspend the procurement of the aircraft, Japan intends to keep
watching the conflict between the U.S. government and Congress. If
the ban on exports to Japan is lifted, Israel, which has had a
strong interest in the F-22, is certain to seek the same treatment,
creating a new source of trouble in the Middle East. A Liberal
Democratic Party (LDP) lawmaker of the national defense policy
clique thinks (the question of exporting the F-22) is inseparable
from Middle East policy, a top priority for the U.S.
administration.

& Mitsubishi Heavy Industries sounds out government about production
of F-22

The Japanese defense industry, which is involved in the production
of fighters, is highly alarmed at the Japanese government's
wait-and-see attitude regarding the F-22. Licensed production of the
F-22 is not allowed in Japan, but some of the candidate models are
allowed to be produced in the country. The future of the FX will
have an impact on the production basis of (the Japanese defense
industry).

Mitsubishi Heavy Industries, Ltd. has recently informally asked the
government and the ruling coalition to produce the F-2 as a stopgap
step. The company fears that if the F-22 selection issue drags on,
it will lose its chance to produce fighters domestically, thereby
forcing it to withdraw from the defense industry. On June 17, the
Defense Ministry abruptly set up a panel to study the modalities of
the production and technological basis for fighter jets.

A senior Defense Ministry official reacted coldly, saying, "The
ministry simply displayed its stance of consideration for the
defense industry." The ongoing battle in the United States (over the
F-22) is rattling the Japanese political world and the defense
industry.

(7) Japan likely to acquire rights to develop oil fields in southern
Iraq

SANKEI (Top Play) (Full)
July 3, 2009

It was learned on July 2 that Iraqi Oil Minister Husayn
al-Shahristani and other related officials will visit Japan as early
as July 10 to discuss concession rights in oil fields in that
nation, which the Iraqi government will release to foreign companies
in order to secure funds to finance the postwar reconstruction of
the nation. They are expected to enter final adjustments with a
consortium involving Nippon Oil Corporation (ENEOA) and some other
oil companies, which is aiming to acquire the right to develop the
Nasiriyah oil field. They are aiming to reach an agreement before
the end of the month. There is now a strong probability of Japan
acquiring a concession right due to a visit to Japan by the oil
minister himself, who has overwhelming authority.

For Japan, which relies exclusively on imported oil, securing a

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Japan-developed oil field is key national challenge in terms of
securing crude oil on a stable basis and for the sake of its energy
security. The Nasiriyah oil field is expected to produce 600,000
barrels a day or over 10 PERCENT of Japan's daily consumption. If
Japan succeeds in acquiring a concession right in that oil field, it
would become the largest-ever oil field developed by Japan.

The governments of Japan and Iraq are working out the possibility of
Sami Al Aaraji, the head of the National Investment Committee, as
well as the oil minister visiting Japan. ENEOA along with Inpex
Corporation and JGC Corporation, a major plant engineering firm, are
engaging in talks to acquire a right to develop an oil field over 20
years in part of the mining area belonging to the Nasiriyah oil
field. The Japanese government is also strongly backing those four
companies.

As a Japan-developed oil field (if realized),the size of the
Nasiriyah oil field is by far larger than that of the Khafji oil
field (300,000 barrels a day),in which Arabian Oil Co. acquired
concession rights in 1957 and eventually lost them.

Three consortiums of Japan, Italy and Spain are taking part in talks
to acquire a concession right in the Nasiriyah oil field. Spain has
effectively pulled out of the race. Japan is now having a one-on-one
battle with the Italian consortium. Japan had been viewed as having
an advantage. However, Italy is now trying to achieve a rollback, by
proposing assistance for the construction of infrastructure.

As such, Japan will propose to the delegation assistance for the
building of infrastructure, such as the building of refineries and a
power plant, through the Japan Bank for International Assistance
(JBIC),as well as assistance for Iraqi reconstruction through
official development assistance (ODA). It wants to make those
proposals lead to reaching a final agreement before the end of the
month.

According to a source familiar with the oil industry, the fate of
the planned talks does not allow any optimism. ENEOS is
concentrating on talks on the Nasiriyah oil field, by forgoing
participation in bidding for the development of other oil fields
held by the Iraqi government. ENEOS Chairman Fumiaki Watari said
with confidence: "The decision will be reached shortly. I have some
leads."

Iraq strongly wants investment by Japanese companies for their ample
funds. Iraq's confirmed crude oil reserves stand at 115 billion
barrels, following Saudi Arabia and Iran. Oil fields in that country
have not been fully developed due to the Iraq war. The Iraqi
government has released concession rights in their oil fields for
the first time in about 40 years.

(8) Iraq's auction of rights to develop oil, gas fields exposes gaps
in intents between foreign firms and Tehran

NIKKEI (Page 6) (Excerpts)
July 4, 2009

Yorinao Ota in Dubai, Yasumasa Shimizu in London

In recent international biddings in Iraq, held for the first time in
about 40 years in that country, there were no winners in seven out
of six oilfields and two gas fields. This exposed Iraq's ambition to

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utilize foreign capital and technology, as well as its intent to
protect its natural resources at the same time. There were
apparently clashes of such intents of Iraq and the participating
companies' expectations and skepticism about the country's political
and security situations.

International biddings were held on June 30 for the first time in
Iraq since the oil industry was nationalized in 1972. Prime Minister
Nouri al-Maliki pinned his hopes on the development of oilfields by
drawing on foreign firms' capital procurement and technological
capabilities. Foreign companies, too, had expected to gain full
access to Iraq's oilfields, which have the world's third-largest
reserves.

An industrial source at a Japanese firm described with displeasure
the terms and conditions presented by the Iraqi side. Contracts were
designed barring foreign companies from having rights to the oil and
gas produced from the fields. Even so, about 30 companies gained
qualifications to take part in the biddings. They intended to
generate profits from payments coming from the Iraqi side in
proportion to production.

According to AFP and other sources, China National Offshore Oil
Corporation (CNOOC) and others sought 25.4 dollars in return for a
barrel of oil produced at Maysan oilfields as against Iraq's offer
of 2.3 dollars.

BP and China National Petroleum Corp. (CNPC) won a contract for the
development of Rumaila oil field. BP, however, initially sought the
amount twice higher than Iraq's offer. The contract was concluded in
the end with BP making concessions to accept two dollars a barrel.

TNK-BP, a joint venture in Russia, represents one-fourth of the BP's
global production. As seen from this, BP's production is
concentrated in specific areas in the world. BP apparently wanted to
win a large oil field in Iraq for spreading its risks. CNPC, which
provides oil to China, obviously wanted to win a deal on Rumaila oil
field at all costs.

A person connected with a certain firm indicated that some risk
factors, such as the security in Iraq, have pushed up corporate
demands, posing questions for Iraq that pressed foreign firms for
contracts at low prices.

Iraqi Oil Minister al-Shahristani, who took the leadership in the
biddings, indicated that the bullish conditions were set in
deference to domestic opinion, saying, "The government is determined
to protect income from oil, and I believe the government succeeded
in getting that message across to the people."

(9) Negotiations with Iraq to secure right to oil field development:
Japan to make all-out effort to revive right to develop oil field on
its own

SANKEI (Page 3) (Abridged slightly)
July 3, 2009

The Iraqi government's delegation is to visit Japan to discuss
rights to develop Iraqi oil fields. Japan wants to make sure that it
secures such a right, availing itself of this opportunity by all
means. Japan has been suffering a series of setbacks in developing
oil fields on its own, as can be seen by the loss of concession

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rights in the Khafji oil field possessed by Arabian Oil, having
failed to renew the right to develop that oil field from 2000
through 2003. For Japan, which relies on imports for almost all of
its oil consumption, reviving major Japanese-flag oil fields is its
cherished desire.

Japan's earnest desire is to raise ratio of crude oil produced from
oil fields in which Japanese companies have interests to 40 PERCENT


The Ministry of Economy, Trade and Industry (METI) envisages a
scenario of raising the share of crude oil produced from oil fields
in which Japanese companies have interests from about 11 PERCENT
in 2007 to 40 PERCENT by 2028. It positions securing rights in
Iraq's oil fields as the means to achieve that end. Oil-related
industries hope Japan will secure such rights, although there are
major risks involved, such as the delay in Iraq's postwar
reconstruction and uncertainties about that country's public
security. But as one oil company executive said: "Iraqi oil fields
are special. They can be called the last paradise."

The opening of rights to develop oil fields in Iraq is the best
opportunity for Japan to achieve a rollback. However, moves by a
number of countries to secure rights to develop oil fields in Iraq
have been dubbed "a scramble for spoils," as one government source
put it. Negotiations that would allow Japan to obtain the right to
develop oil fields in Iraq are likely to be tough-going. China's
presence has been particularly noticeable, as can be seen by its
state-run oil company, which teamed up with BP of Britain, winning
the first bid for the development of eight oil and gas fields held
by the Iraqi government.

The first bid was mainly for projects to increase production of
existing oil fields. The Japanese side characterized this as a
prelude to the main bidding, according to an informed source. The
second bidding for projects at 12 locations to be held by the end of
the year at the earliest is Japan's preferred choice. According to
Reuters, an Iraqi Ministry of Oil press secretary predicted on July
2 that the second bidding will be held earlier than the end of the
year as originally planned. Chances are that the second bidding
could be held two to three months earlier. Japan wants to build
momentum based on its success in the development of Nasiriyah oil
field, regarding which Japan is holding talks with Iraq on its own.

Whether Japan will be able to beat out China, which is increasing
its presence, in the scramble for rights and achieve its earnest
desire to revive a Japan-developed oil field depends on whether the
public and private sectors can set up a joint channel to Iraq.

(10) TOP HEADLINES

Asahi: Mainichi: Yomiuri: Sankei: Tokyo Shimbun
DPJ wins Shizuoka gubernatorial election

Nikkei:
Japanese cell phone makers to reenter overseas markets due to
shrinking domestic market

Akahata:
Tokyo Metropolitan assembly election: Branches, supporters'
associations making all-out effort


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(11) EDITORIALS

Asahi:
(1) Newly enacted law to enhance energy supply structure should be
exploited to prevent global warming:
(2) Create mechanism to fully utilize security cameras

Mainichi:
(1) Shizuoka gubernatorial election: Hopes to see change in
government evident
(2) Iraq and Iran: Do not turn change into crisis

Yomiuri:
(1) LDP loses Shizuoka gubernatorial election: Prime minister in
predicament
(2) Illusory world record: Compete without being affected by
swimwear

Nikkei:
(1) Prime minister finds himself in fix due to LDP's loss in
Shizuoka gubernatorial election
(2) Upper House to speed up timetable for holding constitutional
examination council meeting

Sankei:
(1) Shizuoka gubernatorial election: LDP should look into cause of
defeat
(2) Google library: Legal consolidation that matches times required

Tokyo Shimbun:
(1) Shizuoka gubernatorial election: LDP should listen to voices of
public calling for change
(2) Agreement to provide aid for patients of unacknowledged Minamata
disease: Minamata disease case not over yet

Akahata:
(1) Small- and medium-size businesses' technical power is Japan's
treasure

ZUMWALT