(Second of Two Parts)

SINGAPORE (DNSI) - International oil companies developing offshore oil reserves appear at first glance to demand relatively little in the way of political guarantees. With their wells, rigs and even many of the refineries offshore (all Singapore's refineries, for example, are on satellite islands) they are comparatively more immune from domestic problems than most investors.

For example, one American oilman, when asked if the war would hinder development of Vietnam's offshore oil, said, "Why should it? The supply can be done from Singapore if necessary." Once in production, offshore wells can feed tanker ships directly. The oil can be carried off without ever touching base with the mainland.

Kenneth Wells, Singapore representative of Ray Geophysical Company, which did recent seismic exploration off the coast of Vietnam, said, "The North Vietnamese don't have much naval power. It is a calculated risk but not much worse than some in the Middle East these days,"

The determining political factor for international oil companies plunging on beyond the "risk capital"-they have so far invested in Southeast Asia's oil-appears to be confidence that friendly governments will stay friendly and stay in power, even if only muddling through revolution and war onshore.

(There is an increasing fear among Americans opposed to the Vietnam war that the oil industry will pressure the Nixon Administration to make an even stronger commitment to the Thieu-Ky government. A pamphlet making this argument was done in February by the "Another Mother for Peace" group. This has prompted 10,000 letters to the Senate Foreign Relations Committee, according to Chairman J. W. Fulbright (D-Ark). State Department officials, in response to Senator Fulbright's query, have disclaimed knowledge of oil fields offshore Vietnam.)

It is likely that Japan in addition to the U. S. will make the political, economic and military commitments necessary to guarantee the survival of the current Southeast Asian governments. The most recent symbol of Japan's growing political and economic concern with the area is the dispatch in February of a 34-member "Asian investment and finance research mission" led by the Director of Tokyo's stock exchange under government sponsorship.

Japan's trade with Southeast Asia is now over $6 billion yearly. Two-thirds of her investment in developing countries in 1969 went to East and Southeast Asia.

Involvement in the oil industry in particular is growing. Most recent of a spate of aid-investment programs is a private $40 million loan to Indonesia's Petramina for guiding oil tanks and pipelines in Western Java. The late-February loan made by the Japanese companies Mitsui and Marnbeni-lida, is to be repaid in oil exports to Japan.

Japanese firms now hold outright over 60,000 square miles of on and offshore concessions in Indonesia. In the last year, moreover, Japanese firms have bought into concessions of at least four other foreign oil companies in Indonesia and Malaysia, and have shown interest in getting involved in offshore exploration in the Philippines, Burma, and Thailand. Japanese firms are reportedly negotiating with the Burmese, although Burma has long been ideologically opposed to foreign private investment.

According to Petramina's General Sutowo, Japan now consumes one-half of Indonesia's oil, some 70 per cent of Indonesian oil exports. In late February, the Japanese entertained Sutowo in Tokyo, agreeing to a 30 per cent rise in price for Indonesian oil sold directly to Japan, in an apparent attempt to reduce dependency on foreign oil companies.

On the military side, the February 1 statement by Yashuhiro Nakasone, Director General of Japan's Self-Defense Agency, that Japan may give priority to expanding its navy from 138,000 tons to about 240,000 tons with some nuclear-powered ships has increased speculation that Japan will soon be a military power in the China Sea Basin.

Handing over its assumed responsibility for Southeast Asia to Japan may be on Washington's agenda, but it is highly unlikely this will be anything more than a gradual readjustment designed not to endanger the counter-revolutionary status quo in Southeast Asia. Growing American investments in Southeast Asia oil bear this out.

In this vein, Assistant Secretary for Economic Affairs Philip H. Tresize said last October that, "as a practical matter, we cannot merely shrug off these other people's problems. Any real worsening of the oil situation in Europe and Japan, where we have mutual defense commitments on top of otherwise close and important relationships, would have to affect us... we recognize the mutuality of our interests in seeking to assure against an energy crisis that could harm us all."

The potential of international conflict over Southeast Asia's offshore oil is very great, particularly since long-term big power alliances in the regions are still up in the air. For the moment, Japanese-American togetherness seems assured because of interlocking military and economic interests.