Zachariah
Banned
Even before the 1917 Revolt, the Russian government had tried to draw British capital into the development of the Sakhalin oil fields which had been discovered by then. Preference was given precisely to British rather than Japanese capital; after the Russo-Japanese war, the southern part of Sakhalin had been taken over by Japan, and the Russian government was justifiably wary of Imperial Japanese expansionist encroachments in that region. Starting with 1909, the British-owned Sakhalin Oil and Coal Company repeatedly arranged prospecting and drilling expeditions which cost it up to a million rubles. These expeditions established the presence of a 400 verst (425km) long oil-bearing area in Northern Sakhalin.
In May 1914, a preliminary agreement on oil production in Sakhalin was reached with two British oil companies: W. Peerson's company and Vickers Petroleum. At the end of 1916, however, the former gave up the project, and in May 1917, the latter followed suit. In 1918, Japan's Kuhara company signed an agreement with Russia's industrial group of O. Stakheyev & Co. and sent a prospecting party to Northern Sakhalin. In July 1920, Japanese troops occupied Northern Sakhalin. And although the Far Eastern Republic officially assumed political control over Northern Sakhalin, Japanese troops remained there.
In the same year, the Japanese got down to drilling oil wells in the Katangli area, and in 1921, in the Okha area. The Okha wells started producing in 1923, and the Katangli ones, only as late as in 1932-1933. Apprehensive about the Japanese getting stronger, the United States made a formal declaration against the Japanese occupation of Northern Sakhalin, and insisted that it should revert to Russia. In 1921, the Far Eastern Republic entered into negotiations with the U.S. Sinclair Oil company on the development of Northern Sakhalin's oil-bearing areas.
The Soviet government commented on the concession project as follows: "A clash of American and Japanese interests in the Far East is good for us politically." And upon the Far Eastern Republic's accession to Russia, Moscow confirmed the agreement with the Americans on January 26, 1923. However, Sinclair Oil couldn't go ahead with the development of the local oil fields, owing to the presence of Japanese troops in Northern Sakhalin. The Japanese pumped out Sakhalin oil without the Soviet government's permission, and without paying it any money. On the larger Okha oil fields, the Japanese recovered 12,170 tons in 1924 alone.
But the USSR and Japan finally signed a convention on the establishment of diplomatic relations on January 20, 1923 in Beijing, China. Along with other matters, the document provided for granting Japanese companies concessions to produce oil and coal in Northern Sakhalin. And in 1924, Japan agreed, in principle, to withdraw its troops from Northern Sakhalin, but only on the condition that a concession for the production of Sakhalin oil be granted to it. An agreement was signed on December 14, 1925, granting an oil concession to a newly-established Japanese company which came to be known, since 1927, as Kita Karafuta Seki Kabusiki Kayasya (the Joint Stock Oil Company of Northern Sakhalin (JSOCNS)).
The list of the company's shareholders featured major Japanese companies like Mitsui, Mitsubishi, Sumitomo, Okura Kochyo, Nihon Sekyo, and Kuhara. Concessions to develop the explored oil fields were granted for the term of 45 years, and to prospect for new ones, 11 years. Under the agreements, Japanese concessionaires had to pay an annual rent constituting 4% of production worth; share deductions to the budget amounted to 5% of the original 30,000 tons (220,000 barrels per annum), the charge growing by a quarter percent with each extra 10,000 tons (73,300 barrels per annum). Upon surpassing the production level of 230,000 tons (1.686M barrels per year), the concessionaries would have to pay the USSR government a fixed 15% rent. Share deductions from the worth of oil coming from flowing wells (from 15 to 45%, depending on the volume of production) and of natural gas produced (from 10 to 35%, depending on the gas fractions content) were agreed upon separately. Moreover, a land tax was charged in the amount of 3.84% of overall recovery.
The financial obligations provided for by the agreement were in line with standard world practice at the time. The Japanese company Kita Karafuta Seki Kabusiki Kayasya operating in Northern Sakhalin produced 30,000 tons (220,000 barrels) of oil in 1926; 70,000 tons (513,000 barrels) in 1927; 133,000 tons (975,000 barrels) in 1928; and 150,000 tons (1.1M barrels) in 1929. By then, Northern Sakhalin oil constituted about 13% of Japan's overall oil consumption, and that oil was of upmost importance for Japan's Navy. Admiral Nakasato, who represented the interests of the Japanese Navy, then No.1 consumer of Sakhalin oil, was the first director of the Japanese concession company. And to quote L. Denny, an American oil policy analyst of the time, "Sakhalin as the principal supply source of the Japanese Navy is plotted on world powers' maps as a major attack target or defense objective in any future naval war that may break out in the Pacific Ocean".
So then, here's the question mark- what if the Soviets had never agreed to that deal to grant concessions to the Japanese? Instead, in this ATL, the Soviets decide to go ahead with that American concession project, granting that concession to the Sinclair Oil company back in the early 1920's instead, and even go so far as to open negotiations with the American government to sell the territory of Northern Sakhalin to the USA- with the Americans agreeing to purchase the northern half of the island, primarily to hamper the increasing growth and strength of the Empire of Japan, and declaring its plans to establish a major naval base there.
What would happen next ITTL? What kind of reaction would this move by the Soviets provoke- how bad would the diplomatic fallout have been? Would it have succeeded in the Soviets' aims of creating that politically advantageous "clash of American and Japanese interests in the Far East" which they wanted? How big would that clash and the fallout between the Japanese and Americans over northern Sakhalin (/Karafuto) have been? And would the Japanese and American have been able to accept the status quo of the island being split between them, or would they have potentially gone to war for control of the island in its entirety?
In May 1914, a preliminary agreement on oil production in Sakhalin was reached with two British oil companies: W. Peerson's company and Vickers Petroleum. At the end of 1916, however, the former gave up the project, and in May 1917, the latter followed suit. In 1918, Japan's Kuhara company signed an agreement with Russia's industrial group of O. Stakheyev & Co. and sent a prospecting party to Northern Sakhalin. In July 1920, Japanese troops occupied Northern Sakhalin. And although the Far Eastern Republic officially assumed political control over Northern Sakhalin, Japanese troops remained there.
In the same year, the Japanese got down to drilling oil wells in the Katangli area, and in 1921, in the Okha area. The Okha wells started producing in 1923, and the Katangli ones, only as late as in 1932-1933. Apprehensive about the Japanese getting stronger, the United States made a formal declaration against the Japanese occupation of Northern Sakhalin, and insisted that it should revert to Russia. In 1921, the Far Eastern Republic entered into negotiations with the U.S. Sinclair Oil company on the development of Northern Sakhalin's oil-bearing areas.
The Soviet government commented on the concession project as follows: "A clash of American and Japanese interests in the Far East is good for us politically." And upon the Far Eastern Republic's accession to Russia, Moscow confirmed the agreement with the Americans on January 26, 1923. However, Sinclair Oil couldn't go ahead with the development of the local oil fields, owing to the presence of Japanese troops in Northern Sakhalin. The Japanese pumped out Sakhalin oil without the Soviet government's permission, and without paying it any money. On the larger Okha oil fields, the Japanese recovered 12,170 tons in 1924 alone.
But the USSR and Japan finally signed a convention on the establishment of diplomatic relations on January 20, 1923 in Beijing, China. Along with other matters, the document provided for granting Japanese companies concessions to produce oil and coal in Northern Sakhalin. And in 1924, Japan agreed, in principle, to withdraw its troops from Northern Sakhalin, but only on the condition that a concession for the production of Sakhalin oil be granted to it. An agreement was signed on December 14, 1925, granting an oil concession to a newly-established Japanese company which came to be known, since 1927, as Kita Karafuta Seki Kabusiki Kayasya (the Joint Stock Oil Company of Northern Sakhalin (JSOCNS)).
The list of the company's shareholders featured major Japanese companies like Mitsui, Mitsubishi, Sumitomo, Okura Kochyo, Nihon Sekyo, and Kuhara. Concessions to develop the explored oil fields were granted for the term of 45 years, and to prospect for new ones, 11 years. Under the agreements, Japanese concessionaires had to pay an annual rent constituting 4% of production worth; share deductions to the budget amounted to 5% of the original 30,000 tons (220,000 barrels per annum), the charge growing by a quarter percent with each extra 10,000 tons (73,300 barrels per annum). Upon surpassing the production level of 230,000 tons (1.686M barrels per year), the concessionaries would have to pay the USSR government a fixed 15% rent. Share deductions from the worth of oil coming from flowing wells (from 15 to 45%, depending on the volume of production) and of natural gas produced (from 10 to 35%, depending on the gas fractions content) were agreed upon separately. Moreover, a land tax was charged in the amount of 3.84% of overall recovery.
The financial obligations provided for by the agreement were in line with standard world practice at the time. The Japanese company Kita Karafuta Seki Kabusiki Kayasya operating in Northern Sakhalin produced 30,000 tons (220,000 barrels) of oil in 1926; 70,000 tons (513,000 barrels) in 1927; 133,000 tons (975,000 barrels) in 1928; and 150,000 tons (1.1M barrels) in 1929. By then, Northern Sakhalin oil constituted about 13% of Japan's overall oil consumption, and that oil was of upmost importance for Japan's Navy. Admiral Nakasato, who represented the interests of the Japanese Navy, then No.1 consumer of Sakhalin oil, was the first director of the Japanese concession company. And to quote L. Denny, an American oil policy analyst of the time, "Sakhalin as the principal supply source of the Japanese Navy is plotted on world powers' maps as a major attack target or defense objective in any future naval war that may break out in the Pacific Ocean".
So then, here's the question mark- what if the Soviets had never agreed to that deal to grant concessions to the Japanese? Instead, in this ATL, the Soviets decide to go ahead with that American concession project, granting that concession to the Sinclair Oil company back in the early 1920's instead, and even go so far as to open negotiations with the American government to sell the territory of Northern Sakhalin to the USA- with the Americans agreeing to purchase the northern half of the island, primarily to hamper the increasing growth and strength of the Empire of Japan, and declaring its plans to establish a major naval base there.
What would happen next ITTL? What kind of reaction would this move by the Soviets provoke- how bad would the diplomatic fallout have been? Would it have succeeded in the Soviets' aims of creating that politically advantageous "clash of American and Japanese interests in the Far East" which they wanted? How big would that clash and the fallout between the Japanese and Americans over northern Sakhalin (/Karafuto) have been? And would the Japanese and American have been able to accept the status quo of the island being split between them, or would they have potentially gone to war for control of the island in its entirety?