Japanese consortium going ahead with oil deal despite US pressure

Japanese consortium going ahead with oil deal despite US pressure

Agence France-Presse, Tehran

Iran and Japan are in the final stages of negotiations for a multi-billion dollar project to develop the Islamic republic's massive Azadegan oil field, despite US demands that Tokyo ditch the investment, Iran's oil ministry said Wednesday.

"Despite American pressure, the Azadegan oil deal with Japan is nearing finalization," the state news agency IRNA quoted an oil ministry source as saying.

Earlier this month top government officials in Tokyo said a Japanese consortium, including trading house Tomen Corp., Inpex Corp., and Japan Petroleum Exploration Co. may not be able sign the deal amid concerns over Iran's suspect nuclear program.

Washington, which accuses Tehran of using an atomic energy program as a cover for the secret development of nuclear weapons, is opposed to the planned Japanese investment.

The US State Department has warned of possible sanctions if the deal, estimated to be worth at least two billion dollars, goes ahead.

Japan and Iran agreed in 2000 to start negotiations over the oil field, but Iranian officials warned that a period of exclusive signing privileges for the Japanese consortium expired at the end of June and that other companies could now be considered.

On July 4, Japan's Economy, Trade and Industry Minister Takeo Hiranuma said Tokyo "should tell Iran squarely what we have to say about our concerns" over the suspected development of a nuclear arsenal.

"At the same time, we must explain (to the United States) our country's stance on energy issues and strive to make things go in a better direction," he said.

The Azadegan field, situated in southwest Iran, is considered to be the country's most important with estimated reserves of 26 billion barrels of oil.

Iranian President Mohammad Khatami gave Japan priority to develop the field during a visit to Tokyo in 2000.