Japan and Iran sign major oil deal
Japan and Iran have signed an agreement to develop a major oil field in south-western Iran, officials said.
The deal grants the Japanese consortium full development rights to the Azadegan oil field, which has estimated reserves of about 26 billion barrels and is believed to be one of the largest in the Middle East.
It could offer a key source of energy for resource-poor Japan, which is also pursuing similar arrangements in Russia and other countries.
“We welcome the signing of the contract on the exploitation of the Azadegan Oilfield,” the Japanese Foreign Ministry said in a statement.
The negotiations have drawn concern from the US that the estimated €1.5bn investment in Iran could be used for nuclear weapons development and terrorist activities.
“Our policy has been, with respect to Iran, to oppose petroleum investment there,” US State Department spokesman Richard Boucher told reporters in Washington. “We remain deeply concerned about deals such as this.”
But Japan said the agreement did not condone nuclear proliferation by Iran.
“The Government of Japan firmly maintains its positions regarding Iran’s nuclear issues,” the statement said.
A source close to the negotiations in Tehran told Dow Jones News Wires that the additional costs such as taxes and customs will push the total expenditure of the project to around €2.2bn.
The field should start pumping oil in about 22 months. Development will occur in several phases but is expected to produce more than 300,000 barrels a day when fully operational, the source said.
The Japanese government-backed consortium has been negotiating for the rights to develop the field for more than three years.
