Director-General of the National Iranian Oil Company (NIOC) Mehdi Mir-Moezzi has said that Iran will sign the contracts to develop the giant oil field of Azadegan as well as the oil layer of the South Pars gas field by March 2004, IRNA reported from Tehran on Sunday quoting the press.

The Persian-language newspaper 'Entekhab' quoted Mir-Moezzi as saying that the required credits to fund the Azadegan and South Pars oil projects will be provided from the state budget of the current Iranian calendar year of 1382 (ending March 19, 2004) as well as the

surplus budget of the previous years. The NIOC director also said his company gives a priority to the projects to develop oil reserves that Iran shares with its neighbors, stressing however that Tehran is not worried about activities of US oil corporations in Iraq.

Entekhab further wrote that Oil Ministry officials had refused to answer a question whether there had been any new developments in Iran's talks with Japan over developing Azadegan oil field, adding that the official had stressed that they would not comment on the issue.

The daily also wrote that Japan has so far taken no practical step toward the Azadegan deal even though it has officially declared that its oil diplomacy takes the priority over its relations with the US. On the other hand, it added, the Iranian officials have not given a clear response to the rival company of the Japanese consortium - the French Total - over the deal.

Tehran had offered preferential rights to a Japanese consortia during President Mohammad Khatami's visit to Japan in 2000 to develop Azadegan -- Iran's biggest oil field -- for 2.8 billion dollars. Japan in return had pledged to grant a three-billion-dollar credit line to Iran over three years. However, it has not yet reached a deal with Iran to the effect after the deadline expired at the end of June.

However, Oil Minister Bijan Namdar Zanganeh last week said that Iran has cancelled Japan's preferential rights of Japan to develop Azadegan oil field, stressing that the measure had been taken "long ago" when the deadline for the deal was over.

Furthermore, NIOC Director General Mehdi Mir-Moezzi also last week said that Iran has held a limited international tender for developing Azadegan oil field, stressing that Tehran will continue talks with Tokyo over the project.

The Middle East Economic Survey (MEES) recently quoted Mir-Moezzi as saying that the NIOC has asked more international oil companies to consider bidding for the development of the Azadegan oil field, in addition to the Japanese consortium which is already negotiating a sector.