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Karafuto is the northernmost of the Japanese Home Islands, and is divided in the Kami Karafuto (Northern Karafuto) prefecture and the Shimo Karafuto (Southern Karafuto) prefecture. The former is Japan's newest administrative division on the prefectural level; formally established by the Imperial Diet in December 2002, due to the growing importance of the island for the Japanese economy, especially its oil and gas fields. The capital of the southern prefecture is the city of Toyohara, in the southern tip of the island; the capital of the northern Prefecture is Tobuchi (formerly Okha).


Toyohara lies in the south of Karafuto Island, on the Suzuya River. Originally the Russian settlement of Vladimirovka, it became the Japanese town of Toyohara, the center of the governorship of Karafuto. Toyohara is the cultural and business center, with a population of 1,026,000. Located in the city area, are the railway hub, and airport realizing cargo and passenger flights to the rest of the Empire, the Soviet Union, China and the Western coast of North America. At the beginning of the Japanese Period, the new city erected over Vladimirovka, called Toyohara was built as the political city of Karafuto on purpose. Toyohara means 'Rich Plane' in Japanese, and it was planed that the city could serve as the center of agricultural production and as the administrative center of Karafuto-Cho (the colony of Karafuto), but after the post-war creation of the Karafuto prefecture, it became the capital of the entire island until its partition.






Area: 76,400 sq. km. Karafuto is one of the largest islands in Japan. It is bathed by the Sea of Okhotsk, and the Japanese Sea. The island stretches 948 km from North to South. The maximum width of the island is about 160 km. The minimum width is about 30 km.


Maritime claims: exclusive economic zone of 200 NM 


Climate: The climate is moderate-monsoon. Average January temperatures range from -6°C in the South, to -24°C in the North of the island. The record low temperature is -54°C. Average temperature in August is +19°C in the South and +10°C in the North. The record high is +38°C. The annual precipitation is 600-1200 mm. Snow accumulations in the mountains can reach 5 meters or more; where under such conditions, avalanches are quite frequent. In the north of Karafuto, and in the mountains, winter lasts from October to May. In the South, winter is from November to April. Typhoons are quite frequent in summer, and can produce up to 220 mm  of rain during a single 24-hour period.


Terrain: Nearly 2/3 of the Karafuto area is mountainous. The Northern part of the island is a swampy plain covered with deciduous taiga.


Highest point: Oshaku Mountain, at 1,609 meters above sea level


Natural resources: forests, marine and agricultural products, gas and oil.


Administrative division: Northern Karafuto, 2 districts: Tobuchi and Sakakibara. Southern Karafuto, 5 districts: Odomari, Shibushi, Nagahara, Honto, and Toyohara.


Population: 1,489,854 (July 2002 est.) 


Ethnic groups: Japanese, Ainu, Nivkhi and a vestigial Russian community.


Religions: Shintoism, Buddhism, Orthodox Russian, other.


Languages: Japanese (official and common language), Ainu, Nivkhi, Russian.


Capital: Toyohara (South) and Tobuchi (North).


Other characteristics: Mountains of the central and southern parts of the island are covered with forests of Ayan spruce, fir and birch. The undergrowth is of dwarf Siberian pine, and Chishima bamboo. The usual forest inhabitants are bear, marten, wolverine, sable, squirrel, Northern deer, musk deer and adder. There are two mud volcanoes and more than 60 thousand rivers and streams, the largest of which are the Timu, and Furonai Rivers. The lakes number about 16,120. The largest among them are the Runaisha (174 sq km) and Miyukoyi (178 sq km).





Japan and Russia first established diplomatic relations in 1855. In that same year, the Treaty of Commerce, Navigation and Delimitation (the Shimoda Treaty), which provides for an agreement on national boundaries between the two nations, was concluded. This treaty between Japan and Russia, was concluded after peaceful negotiations took into account all activities of the two nations in the vicinity of the Sakhalin and Kurile Islands prior to the time of the treaty's conclusion. This Treaty left Karafuto/Sakhalin Island as a mixed settlement for Japanese and Russian nationals. In order to resolve the complications arising from these ambiguities, negotiations aimed at a division of the island between the two nations were conducted during the 1870s. In these negotiations, Japan called for a division of the island at the 50th parallel of north latitude, and Russia called for a division at the 48th parallel; neither side could come to terms. By concluding the 1875 Treaty for the Exchange of Sakhalin for the Kurile Islands, Japan and Russia agreed that Japan would hand over title to the Karafuto/Sakhalin Island to Russia, and in return, Russia would hand over the Chishima/Kurile Islands, the eighteen islands from Uruppu and to Shimushu, to Japan. The peaceful negotiations resulted in the Chishima Islands becoming Japanese territory and Sakhalin Island becoming Russian territory.


In 1904, Japan and Russia went to war over Manchuria and other regional interests. As a result of this war, the Portsmouth Peace Treaty was concluded, by which the southern half of Sakhalin Island was ceded by Russia to Japan. The Soviet-Japanese War saw the IJA invading the northern half of Karafuto, expulsing the Soviet garrison. After Japan's defeat, all of its colonial territories were occupied by the Soviet forces, excepting the northern half of Karafuto, still in IJA’s control.


The occupation of the northern half was carried out without bloodshed, and during the war, almost the entire Soviet population was deported to Siberia. After the war, the country redirected colonizers to this island to replace the 100.000 Russian residents in northern Karafuto. Since then, Karafuto has become a “mythic frontier” for the Japanese, and wasn’t until recent years that important numbers of Japanese had moved to the island, wishing to participate in its economic bonanza. 



Economic overview:


The economic basis of Karafuto is the manufacturing, timber, agricultural, coal, fish and oil industries. But today, oil and natural gas had supplanted every other aspect in the Karafutoan economy, initiating an economic boom that has attracted immigrants from every other Japanese island. The construction of an underwater tunnel between Karafuto and Hokkaido commenced in October 2001, but budgetary problems has delayed its termination. The project intends to link Karafuto with the rest of the Home islands by railway. The tunnel will contain not only a railway but also an auto route and pipelines.  The project is supported by the Prime Minister but will be financed by the Japanese Transport Ministry and private investors. 


The Karafuto Economic Committee anticipates that Sakhalin population will increase by 94,000 and will be 1,584,300 in 2003.  In 2000, due to migration the population increased by 99,000.  It is also expected that the number of unemployed will decrease from 10,400 in 2002 to 9,800 in 2003 and salaries will increase by 3%.


Oil and gas


The gas and oil fields of Karafuto has played a crucial influence in Japanese politics since the first years of the twentieth century. Naturally, the existence of considerable oil reserves in Russian-controlled Karafuto was of great interest to the Japanese government, particularly the Imperial Japanese Navy. In 1919 an anti-Bolshevik White Russian government in Siberia granted rights to develop the north Karafuto oil fields to a Japanese government-backed commercial consortium called the Hokushinkai led by Mitsubishi.


The effects of the Russian Revolution finally reached northern Karafuto with the brief establishment of a Far Eastern Soviet administration in January 1920. The Japanese government, already committed to its 100,000 man Siberian expedition at the time, responded by invading northern Karafuto from southern Karafuto, setting up a puppet White Russian "autonomous state", and taking direct control of the oil fields. Six months later, the Cabinet provided the Navy with a special appropriation of 1,400,000 yen for oil drilling in Karafuto. Each year between 1920 and 1925 the Hokushinkai consortium sent 100,000 tons of crude oil back to Japan.


This new source of Karafuto oil just next door under the control of a puppet government was conveniently timed, since domestic Japanese production was declining rapidly, and consumption was reached 840,000 tons by 1925. But eventually peace returned to Karafuto in 1925 with the signing of the Treaty of Peking between the Soviet and Japanese governments. Under the agreement Japanese forces pulled back to southern Karafuto, but the Hokushinkai's successor, the North Karafuto Oil Company (Kita Karafuto Sekiyu Kaisha) headed by a retired admiral, retained rights to half of the north Karafuto oil fields. Between 1926 and 1939, over a million tons of oil was exported from Karafuto to Japan. After the Soviet-Japanese War, the Imperial government concede to Japanese firms a restricted access to northern Karafuto resources, while the IJA turned the territory into a military bastion, due its nearness to the Soviet Union.


In the 1960s a national energy security strategy emphasized nuclear power together with stable sources of hydrocarbon fuels. Coal, oil and gas were to be acquired from a range of supplier countries - including Australia, Indonesia and Canada. Karafuto's oil and gas reserves were quickly shown to be very large, but mainly offshore in the shallow but often icebound and turbulent waters of the Sea of Okhotsk. However the combination of politics, the unsolved technological problems of offshore production in an appallingly difficult climate, and the difficulty of obtaining adequate project finance stopped any investment in Karafuto oil and gas.          


In the 1970s and the 1980s Japanese, US and European engineers solved many of the technical problems of offshore oil and gas drilling and production and transportation, especially in the severe conditions of the North Sea and Alaska and in the deep waters of the Gulf of Mexico. The way was opened for offshore oil and gas production in arctic conditions.


By the early 1990s, each of these difficulties had been at least in part ameliorated. Karafuto was one of the most secret parts of the Japanese Empire. Together with the chain of air and naval bases and undersea listening posts along the chain of the Chishima Islands, Karafuto was the site of numerous air and naval bases protecting the portion of the Sea of Okhotsk between Chishima and Karafuto, a safe haven for the ballistic missile submarines that made up the Japanese nuclear deterrent. But after the coup that destabilized the Soviet Union and defused the military tension in the Sea of Okhotsk, Japanese oil and gas companies raced each other to every corner of Karafuto to bring vast oil and gas reserves on stream as fast as possible.


Karafuto's offshore oil and gas today


For exploration and production purposes, the waters surrounding Karafuto have been divided by the Japanese Imperial government and the local Karafuto prefectural administration into six large blocks, known as Karafuto 1-6. Rights to explore, test and develop each were allocated to various consortiums of Japanese and foreign companies during the 1990s. The make-up of each consortium frequently changed as partners fell out, discovered they lacked the required capital, lost confidence in the project, or simply changed their minds about the place of a Karafuto project in their global strategies. Of the six blocks, Karafuto 1 and Karafuto 2 are the front-runners.


In the first half of 2002, Karafuto Energy, a company owned by Mitsubishi, Shell, and Mitsui began to spend 1,350 billion yen to build the world's largest LNG plant at the southern tip of Karafuto to export gas from its huge Karafuto 2 field to Japan, China and Taiwan. A rival consortium, led by Japan's KODeCo (Marubeni, Itochu and US's Exxon) is strongly pressing the Japanese government to support a 2,300 kilometer gas pipeline to from its equally huge Karafuto 1 gas field to Niigata and Tokyo. Karafuto gas, together with its smaller cousin, oil, is going to be very important for Japan, and will go a long way to answering the Japanese government's unending concerns about energy security for decades to come. The proven reserves of oil reach 3 billion barrels of crude oil; and the proven reserves of gas exceed 1,021 billion cubic metres.


Already producing oil in substantial quantities, Karafuto 2 is the most advanced. Karafuto Energy Investment, owner of the project, is in turn 55 % owned by Mitsubishi, which also operates the project, and 25% by Mitsui and 20% by Shell. For the past three years, oil has been pumped from its Kibito field onto the large Kashu offshore production complex anchored to the seabed, where its is stored until large oil tankers arrive every six days to take the crude oil to markets in Japan and China. Production and loading can only take place in the ice-free months of the year (the season is less than half a year), and even then weather conditions can be severe.


In the next phase of Karafuto I gas will be piped to shore, then down the length of the island to a liquid natural gas [LNG] production plant Aniwa Bay. The world's largest LNG plant will clean and freeze the gas, which will then be loaded in liquid form onto LNG tankers for export to markets Mitsubishi and its partners hope to find in Japan, Korea and Taiwan. Mitsubishi announced in mid-2001 to its shareholders that it hoped to announce long-term sales contracts within six months. With construction contracts for the LNG plant beginning to be announced, Shell and Mitsubishi and Mitsui shareholders and executives with $9 billion to lose will be waiting for the news.


Karafuto 1 is owned by the Japanese Karafuto Oil Development Company [KODeCo] (30%) which also operate the project, the US Exxon Mobil (30%), the Indian Natural Gas Company (20%), and two Russian companies Rosneft/ Sakhalinmorneftegaz (20%). While its proven oil reserves are large and its gas reserves huge, Karafuto 1 is still at a developmental stage. This is mainly because KODeCo and its partners intend to export gas by pipeline direct from the gas field to Niigata or further south on Honshu, a project that has given rise to wildly differing estimates of its cost. This uncertainty is in turn affecting the cost at which the gas could be offered to possible buyers, and hence, slowing down the process of making firm contracts.




The timber industry played an especially important role in the economy of Karafuto. One third of all the timber traded in Japan came from south Karafuto. The primary consumers of this timber were the cellulose and paper factories set up by Japanese entrepreneurs. Ten such factories were built in Karafuto, beginning in 1914. They provided as much as 70 percent of Japan's cellulose production. Production in 1991 stood at 1,214,000 tons of cellulose and 1,201,000 tons of paper. The largest share of the production was consumed internally.




Industrial coal production began in Karafuto in 1909. Mining output grew at a brisk pace: 4600 tons in 1909, 154,000 tons in 1920, 645,000 tons in 1930, 6.3 million tons in 1940, and 13.3 tons in 1990. In all, the Japanese output from Karafuto up to 1990 was more than 148 million tons of coal, of which 118 million tons was consumed in Japan.




One of the most important sectors of the economy of Karafuto was the fishing industry. Harvests of fish and marine products in the waters around the island were irregular. The largest catch occurred in 1971, with approximately 1,620,000 tons. After this the harvests in the waters of Karafuto fell off sharply.




Since its conquest in 1905, Japan has saw Karafuto as vital to their nation's well-being. From Karafuto, Japan has not only acquired oil, coal and iron, it also acquired soybeans, forty percent of which it sold to Europe for much needed foreign exchange. Also from Karafuto, Japan acquired tobacco, and there Japanese industries spun silk and cotton. And in Karafuto were nearly eight hundred agroindustries. To make its position more secure in Karafuto, the Japanese government invited people there, giving them low interest loans with which to buy land. Since then, Karafuto has become one of the largest foodstuff producing areas of Japan.