Tehran, Dec 17, IRNA -- Iranian Oil Minister Bijan Namdar Zanganeh Monday said Japan would grant the Islamic Republic the last payment of a US dollars three billion loan in March 2003, the press reported here on Tuesday.

The Persian-language 'Toss'e' quoted Zanganeh as saying that the third installment of the loan will be US dollars one billion.

In 1993, Japan approved a three-part, low-interest loan package to Iran for certain development projects, including the construction of a hydroelectric dam on Iran's Karun River.

However, Japan had to freeze the second tranche of the loan after the US protest. However, during the visit by Iranian President Mohammad Khatami to Tokyo in November 2000, Japan agreed to extend the loan to the Islamic Republic. Iran, in return, gave Japan the exclusive negotiating right to develop Azadegan oilfield in southwest Iran.

Seismological operation to determine the reservoir capacity is to be finalized before Iran and Japan enter serious talks on the issue.

Tehran and Tokyo are expected to sign a US dollars 2.8 billion buy-back deal on the Azadegan oilfield. Furthermore, talks are now underway to find a consortium partner for Japan for the development of the field.

The project will be put out for an international tender before a consortium is formed. Tokyo will be vested with managing the tender, with the Iranian Oil Ministry supervising the terms of the final agreement.

Zanganeh said talks on developing Azadegan oilfield are currently underway, adding that the final report on the projections of the reservoir will be prepared soon before a tender is held for a consortium partner for Japan.