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WI: Japan discovers the Liaohe Oil Field in the early 1930s?

SinghSong

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The Liaohe Oil Field is located in the Liao River Delta, northeast of the Bohai Bay Basin, with its northern, eastern and western parts surrounded by mountains, while the southern part extends beneath the waters of the Liaodong Bay, in the Liaoning Province of China (which came under the rule of the Japanese-controlled puppet state of Manchukuo after Japan invaded the province in 1931). This was formerly the third largest oil field in China, behind only the Daqing and Shengli Oil Fields, and the largest production base for heavy oil, ultra heavy oil and high pour-point oil in China, with total proven reserves of around 6.87 billion barrels; IOTL, this oil field was only discovered in 1958, and developed by China National Petroleum Corporation from 1970 onwards, with production peaking in the mid-90s at roughly 315,000 barrels a day, or 15.75M tonnes/annum.




But remarkably, the Imperial Japanese were the first to conduct small-scale oil prospecting in the immediate vicinity IOTL, in the early 1930's, and only missed finding the Liaohe Oil Field by a hundred meters or so when drilling in the area. So then, what if the Japanese oil prospectors tried looking just that little bit harder before giving up, drilled down just a couple of hundred meters away in the right direction, and successfully discovered the Liaohe oil field ITTL, in 1933. How much of an impact could this discovery, which the Japanese so narrowly missed out on IOTL, potentially have had? What would the consequences be- how much would you expect this discovery, and the very real prospect of Imperial Japan becoming a net oil producer (even more so, if/when the Japanese carry out larger-scale oil prospecting across Manchukuo following their initial discovery in Liaohe, and discover the Jilin and Daqing oilfields as well- in the case of the Chinese IOTL, after discovering Liaohe first, they discovered the others as well within the year), to alter policy and the balance of power, both in East Asia and further afield?
 
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Redolegna

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I imagine that, if they can bring it online fast enough, this gives them breathing space when facing the American oil embargo, though not on the other ones such as scrap metal. Would it produce enough after a few years to not want to go for the Dutch East Indies oilfields, though? If it does, it would reopen the Northern option, presumably.
 

Bonniecanuck

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Well, assuming the discovery is in 1933, it would probably put even more onus on the Japanese bureaucracy and military to develop and integrate Manchuria economically. That would make it more valuable as a whole, and the Japanese are undoubtedly going to recognise this and might make the effort to confront China or the USSR earlier because of this. Keeping in mind that Japanese imperialism and expansionism relied on protecting an ever-expanding cordon of assets and territories, Hokushin-ron would be seen as more necessary to stave off such a strategically vital asset.

I think the implications of the discovery would also intensify the conflict between China, Japan, and the USSR at the time, since northern China will have even more eyes on it for resource discovery. Leaving Daqing aside, if China and the USSR were to scour the entire region more closely, they could potentially discover the first oilfields in Xinjiang a few years earlier (the first was discovered in 1938, four years after Sheng Shicai invited Soviet intervention into the region). What implications that leaves for Soviet expansionism and Chinese defence policy is up to the imagination at that point. In the relatively less likely chance that Huabei and Shengli were to be discovered, that might motivate an even more aggressive attitude towards China by the IJA. The latter especially would be extremely lucrative for Japan, since its location in Shandong puts it in the crosshairs for Japanese exploitation, and the region is likely to be even more contested between them and China as a result.

Though I have doubts as to whether exploitation of Liaohe can meet Japan's needs. Analysis in 1942 stated that Japan's oil import needs were around 30 million barrels annually, of which 3.2 million would be produced at home. Liaohe at its 1995 peak produced 312,000 barrels per day, or over 113 million barrels annually, but these were figures which were achieved after a decade and a half of exponential growth coinciding with the PRC's Open Door to Western markets and experts. In the 1970s, when exploitation commenced in earnest, daily production was about 50,000 barrels, or 18 million annually, which still leaves a 12 million barrel deficit. Though maybe the shortfall would make Japan put together even bigger operations to expand production even faster than China did, and I think they could do it if/when Kishi or another economic planner takes charge.
 

Alex Richards

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In the 1970s, when exploitation commenced in earnest, daily production was about 50,000 barrels, or 18 million annually, which still leaves a 12 million barrel deficit. Though maybe the shortfall would make Japan put together even bigger operations to expand production even faster than China did, and I think they could do it if/when Kishi or another economic planner takes charge.
Although I wonder if there's enough possibility in the Manchurian oil fields as a whole to allow for self-sufficiency, or at least to mean that the message is more 'no look there'll be more just over the border so we just have to slice off a bit more of China and we'll be sufficient'

Really it does suggest a very grim situation where Japan is almost certainly unable to conquer China, but may well be able to permanently split off the NE.
 

Geordie

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What sort of yields could the Japanese have got out of the field in the 1930s?
 

SinghSong

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I imagine that, if they can bring it online fast enough, this gives them breathing space when facing the American oil embargo, though not on the other ones such as scrap metal. Would it produce enough after a few years to not want to go for the Dutch East Indies oilfields, though? If it does, it would reopen the Northern option, presumably.
Well, to provide some context in that regard:

Bearing in mind that 1M metric tonnes/annum is roughly equivalent to 20,000 barrels/day (or 7.305M barrels/annum), and looking at production from the Liaohe oilfield after its began there in 1970 IOTL; it took the PRC's NPC about an year to start concentrated production at Liaohe IOTL, with Liaohe alone producing just over 50,000 barrels/day (2,500 on the table above, with 000's omitted) of crude oil within five years, and 100,000 barrels/day (or c.5M tonnes/annum) of crude within ten, whilst focusing on the development of other oilfields as higher priorities.

So if the Japanese discovered it in 1933 ITTL, the crude oil production output from Liaohe alone should easily surpass those of Argentina or Trinidad by 1939; and could be at least on a par with the Dutch East Indies oilfields' increase in crude oil output in the same timeframe IOTL, perhaps even enough to exceed the total crude oil production of the Dutch East Indies altogether. And of course, that's without accounting for the likely knock-on butterfly effect of increased oil prospecting in Manchukuo, and the probable discoveries of the Jilin and Daqing oilfields as well (which likewise increased their productions by roughly 10,000 barrels/day, or 0.5M tonnes/annum, on an annual basis over the course of their first decades of development, going on to reach peak oil productions of over 7M tonnes/annum and 40M tonnes/annum respectively) in relatively short order.

Could this be enough to meet Japan's needs?



Even sticking to a relatively conservative estimate for maximum potential production of c. 100k barrels/day from the entirety of Manchukuo by 1939 ITTL, and 100-150k barrels/day (36.5-54.8M barrels/annum, 5-7.5M metric tonnes/annum) by 1942 ITTL, though it'd still pale in comparison with the USA's total output of crude oil (as everyone else's did, with the USA's crude oil output accounting for over 60% of global crude oil production in 1939), it'd still equate to c.2.6-3.8% of global oil production- 6.4-9.6% of the rest of the world's oil production excluding the USA. Which would easily make it by far the most oil secure of (OTL's) Axis Powers ITTL, and be more than sufficient to meet (OTL, 1942, post-Pearl Harbor) Japan's annual deficit of c.32.7M barrels/annum (just under 90k barrels/day, of which roughly 34,500 barrels/day was required by the civilian economy). Which could well change things massively...
 

Charles EP M.

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If Japan can get its oil, that does mean embargoes of oil are screwed and it's not got its back to the wall there - but also means Japan has to dig in at Manchuria and hold it at all costs (which will be mostly paid by the Chinese). They're still also vulnerable to embargo on other goods like rubber, right? They might still have to make some attack.

Or does a Japan that's both a) in a better position b) absolutely needs Manchuria more than anything else become a Japan more likely to cut a deal with the Western powers, who themselves would like to be sure Asia's stable while Hitler froths?
 

BBadolato

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Okay the context of Japan's need for oil, was more due to the fact Japan was trying to 'win' in China. As it basically ground down to a halt with lots of difficult conflict in the countryside. The problem is the Nationalists wouldn't really sue for peace, and it require something like a Japanese takeover of Chongqing. Which leads us to another problem the Second Sino-Japanese War was less about out and conquest from a full scale invasion, and more something akin to a border skirmish with severe mission creep. We really have no idea what a Japanese victory in the Second Sino Japanese war would even would look like.

So the Second-Sino Japanese could rage on in the background with minimal allied involvement, but what a surviving Imperial Japan does or looks like might require some really education guess work, but that comes at the ever-present risk of some 'idealistic' at least terms of being plausible or not narratives popping up.
 

Bonniecanuck

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So if they discovered a big source of oil in China, they'd be trying hard to win in China to keep the oil it needs to win in China in a big feedback loop.
This was more or less the MO for Japanese imperialism in the establishment's eyes. Pre-empt foreign threats by grabbing neighbouring territories, develop and exploit them to add to national resources, grab territory surrounding those regions to defend them, and so on.
 

Death's Companion

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Were the Japanese particularly interested in exploiting oil resources as opposed to grabbing them?

Like the assumption here seems to be in the early thirties almost a full decade before the American embargo the Japanese decided to double down on a newly discovered field and start up a major drilling operation from nothing in an only recently conquered province whilst still fighting a major war that they expect to be resolved fairly shortly.


It seems somewhat presentist to assume they'd do so and so quickly.
 

Francisco Cojuanco

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This was more or less the MO for Japanese imperialism in the establishment's eyes. Pre-empt foreign threats by grabbing neighbouring territories, develop and exploit them to add to national resources, grab territory surrounding those regions to defend them, and so on.
To be fair, that was the same logic of literally every other colonial power to a certain degree.
 

Thande

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I seem to recall @Hendryk suggesting this POD on the other place some years ago.

As said above, I think the difficulty is that while the oil would doubtless be an aid to Japan, it doesn't completely change the dynamics of OTL because they would still need sources of rubber and scrap metal.

I do feel like an underdone WI is if the Japanese had only attacked British and Dutch colonies and ignored the Philippines and Pearl Harbour. The assumption at the time seems to have been that war was inevitable and the US fleet was building up so they'd best get in a pre-emptive strike, but - as with Hitler declaring war on the US out of 'weeeell, it was heading that way anyway with all the unofficial Atlantic clashes', both decisions seem to seriously underestimate how difficult it would have been for FDR to be the one to pull the trigger on war no matter how much the provocations. I wonder how many Axis decisions reflect a lack of understanding of the US political system - and conversely could one argue that some of Churchill's odder decisions were based on his own understanding of it (like sending troops to Greece), and maybe a seemingly more competent British PM might actually have made worse decisions for the goal of bringing the US into the war?
 
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