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Zanganeh: Iran, Japan close to sign deal on Azadegan oil field

Oil Minister Bijan Namdar Zanganeh said Iran and Japan are close to clinch a deal on developing the massive Azadegan oil field in the face of American pressures, IRNA reportef from Tehran on Monday quoting the press.

"Despite American pressures, the Azadegan oil deal with Japan is nearing finalization," the Persian daily Khorassan cited him as saying, thus dispelling speculation that Tokyo had bowed down to US pressure and pulled out of the venture.

Earlier, news had emerged that Tehran had new oil firms in sight as a deadline for the finalization of a deal with Japan had expired, with Japan reportedly said to be dragging its feet on the 2.8-billion-dollar project.

Zanganeh said the Iranian Oil Ministry had held negotiations with Chinese, Indian and Russian consortia, but "the chances of concluding a deal with Japan are high", Khorassan said.

Azadegan in southern Iran is said to be the country's biggest oil field, holding an estimated 26 billion barrels of crude oil.

Iran last Monday said that it reserved the right to enter into negotiations with other oil companies for the development of the huge field since Japan had failed to reach a deal up to the deadline which expired at the end of June.

Tehran offered preferential rights to Japanese consortia during President Mohammad Khatami's visit to Japan in 2000 to develop the oil field, which is said to hold the world's biggest undeveloped oil reserves.

Japan in return pledged to grant a three-billion-dollar credit line to Iran over three years.

"It is clear that the Islamic Republic of Iran reserves the right to enter into negotiations with other world companies after the expiry of the deadline," Foreign Ministry spokesman Hamid Reza Asefi told reporters Monday.

But, he was quick to add that "Japan has not been ruled out yet and Japanese are still continuing negotiations" with Iranian Oil Ministry officials to see if they could hammer out a deal.

"(Iran's) Oil Ministry will finalize a deal with any country or company which it considers viable, but Japan is not a by-gone issue yet and negotiations are continuing," Asefi added.

The London-based Financial Times recently reported that the United States was exerting pressure on the Japanese government to withdraw from the large-scale Iranian oil program.

A US State Department official confirmed that Washington was pressing Japan not to send the 'wrong message' to Iran, Financial Times said.

US Secretary of State Colin Powell has raised the issue with Japanese Foreign Minister Yoriko Kawaguchi, while the Japanese government is trying to resist the pressure, Financial Times wrote.

Political analysts say the pressure had triggered a tug-of-war between the Japanese ministry of economy, which wanted the deal to be finalized, with the country's foreign ministry.

Washington accuses Tehran of seeking to use its nuclear program as a cover for producing atomic weapons -- a charge which the Islamic Republic strongly rejects.

Iran says its nuclear program is intended for producing 7,000 megawatts of electricity in the next 20 years, when the country's oil and gas reserves become overstretched.

... Payvand News - 7/14/03 ... --

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