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.