Merging Inpex and Teikoku Oil under a joint holding company (2005)

Where the logic of the state and the logic of the market overlapped

What this merger poses is the question of how far private management judgement and national policy can be made to coincide in a field — resource development — that touches national security. Combining with a Teikoku Oil that was plainly the weaker party was not, by the logic of the market alone, obviously advantageous to Inpex; it acquired its rationality only when placed in the policy context of a "rising-sun oil company," a notion framed against the failures of the old petroleum public corporation.

That said, a half-public, half-private governance structure carrying a golden share held by the trade minister meant not only the benefit of credit support in raising money but also a permanent constraint on decision-making of a kind no purely private company faces. That the company could take final investment decision on Ichthys seven years later was possible only because of the scale and bargaining power the merger produced — but the problem of how to hold the distance between national policy and corporate management was written into this company from the day it was formed, and remains.