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IRAN, RUSSIA, CHINA 'IF' FACTORS

Trade chief hopes oil projects work out

by Yumi Wijers-Hasegawa

Japan hopes to continue talks with Iran on tapping the Azadegan oil field beyond the Saturday deadline set by Tehran for the nation’s participation, new Minister of Economy, Trade and Industry Akira Amari says.

“I don’t believe Iran is really willing to stop talks so easily at this time,” Amari said in an interview Wednesday, noting Iran should heed international calls to halt its nuclear enrichment activities and also clear land mines around the oil field so the project can start.

Japan’s Inpex Corp. was granted a concession to develop Azadegan, one of the largest oil fields in the world, with expected production of 260,000 barrels a day. But Inpex has not started on the project because of international pressures being exerted over Iran’s nuclear ambitions, and the firm’s claim that land mines also pose a hindrance.

Iran has threatened to turn to China and Russia and cancel the Inpex concession if Japan fails to start by the deadline, which has been pushed back repeatedly, from the originally set Aug. 22 to Sept. 15, and then to Saturday.

Amari called on Tehran to abide by the United Nations resolution calling on Iran to halt its nuclear enrichment efforts, so the oil field project can get under way.

He also stressed that Japan should continue pressing for participation in Russia’s Sakhalin-2 oil and gas project and get China to cooperate in efforts to tap gas reserves under the East China Sea in areas under dispute.

Amari claimed energy-scarce Japan has a lot of energy-saving and nuclear energy knowhow and thus should not worry if the projects hit snags.

“We should calmly analyze the situation and decide our approach,” he figured.

Although a quick breakthrough is not expected, the three projects are crucial in Japan’s aim to secure more energy. METI hopes to raise by 2030 the share of Japanese company’s drilling rights in overseas oil projects to 40 percent of its oil imports, up from the current 15 percent.

Sakhalin-2, a joint project between Dutch-U.K. Royal Dutch Shell and Japan’s Mitsui & Co. and Mitsubishi Corp., was abruptly suspended by Russia earlier this month reportedly due to “environmental concerns.” There is speculation that Russia wants to increase its interest in the project. The Japanese firms may have to hand over parts of their rights to Russia, as Royal Dutch Shell has done, Amari said.

China is meanwhile drilling for gas just inside its side of the median line drawn by Japan to demarcate the two nation’s economic boundaries in the East China Sea. Beijing does not recognize the line as the limit of its zone, and Tokyo meanwhile believes China’s drilling efforts will tap into gas on Japan’s side of the line.

Amari nevertheless expressed hope of the two nations moving forward in a cooperative manner, as they have agreed to jointly develop some of the gas fields, although they have not pinned down a specific location.

On trade, Amari said he will pursue the plan launched by his predecessor, Toshihiro Nikai, to create a 16-nation Asia-Oceania free-trade zone with the 10 members of the Association of Southeast Asian nations and Japan, China, South Korea, India, Australia and New Zealand.

But FTA talks are “not a race with other countries,” he said, referring to media criticism that Tokyo is dragging its feet, unlike China.

He also expressed his wish to finalize FTA talks with South Korea that have been stalled since 2004 amid strained bilateral relations.

“I want to make efforts so South Korea becomes a truly close nation to Japan,” not just geographically, Amari said.