Japan and Iran continues oil talks despite pressure from US
Dow Jones

12-01-04 Talks are continuing between Iran and Japan on developing one of Iran's 
largest oil fields despite pressure from the US for Tokyo to end the talks, Iranian officials 
have told. Their comments follow a visit to Iran by Japanese Foreign Minister Yoriko 
Kawaguchi.  

During that visit, sources say, Kawaguchi assured Iranian officials of Tokyo's eagerness 
to sign a deal as quickly as possible to develop the massive Azadegan onshore oil field in 
south-western Iran. 

"The Japanese foreign minister reaffirmed (Tokyo's) eagerness to conclude this deal," a 
senior Iranian oil official said. He added: "I am optimistic that these talks will reach a 
positive end.”  

Kawaguchi also told Iranian reporters during her trip that Japanese oil companies were 
pressing ahead with talks to develop Azadegan. A government-backed Japanese 
consortium, of Tomen, Inpex and Japan Petroleum Exploration, were initially given 
exclusive rights to the development of the field, worth just under $ 3 bn. 

As Japan imports virtually all of its energy needs, tapping into Azadegan's huge oil 
resources has been a top priority for Tokyo. But under pressure from the US, which has 
accused Iran of trying to develop nuclear weapons, Tokyo backed off from inking a deal. 
Negotiations between the two countries have also been mired in differences over contract 
terms.  

By missing an initial deadline last summer, Japan's exclusive rights to develop the field 
where cancelled and Iranian officials made no secret of their intentions to talk to other oil 
firms about developing Azadegan. Since then several other international oil majors, 
reported to include France's Total and Norway's Statoil have expressed an interest in 
Azadegan. 

But keen to remain in the picture, Tokyo recently asked Tehran to extend its deadline on 
Azadegan. It is unclear whether Iran has agreed to this. An Iranian oil source said a team 
of Japanese technical experts are due to arrive in Tehran to continue discussions on 
Azadegan.  

"I think the US recognizes the needs of Japan to secure its energy supplies," an Iranian 
official said.