Japan mulls options for Iran oil project

Kyodo News

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Japan has worked out guidelines for what actions to take about an Iranian oil field project in which it holds a minor stake, if the United Nations adopts a resolution to impose sanctions against Tehran over Iran’s nuclear ambitions, a government source said Thursday.

The guidelines basically call on Japan to keep its concessions in the project if sanctions under the resolution are limited, but suggests a total pullout if rigorous sanctions are to be imposed as sought by the U.S., the source said.

Japan’s stake in the Azadegan oil field in southwestern Iran was trimmed to 10 percent from 75 percent after Japan, amid pressure from the U.S., failed to begin work on the project by the Tehran-set deadline. The operating right was thus passed on to Iranian Oil Co.

Despite such a reduction in exposure, Japan’s oil and natural gas developer Inpex Holdings Inc. intends to continue working on the project and is hoping for regaining a greater stake, the source said.

Tokyo plans to endorse any Iran sanctions resolution if it is introduced at the U.N. Security Council.

If the resolution limits sanctions to an export embargo on materials related to ballistic missiles and other weapons of mass destruction, “the sanctions would not touch on energy development,” the source said.

However, given that the U.S. government is calling for discontinuing the Azadegan project, Japan may have to hold consultations with the U.S. side, the source said.

The oil field, one of the largest in the Middle East, has an estimated deposit of 26 billion barrels.

On the Iranian nuclear standoff, Britain, France and Germany have drafted a resolution centering on a ban on materials and funds linked to nuclear arms and ballistic missile development. The United States is calling for tough economic sanctions.

Russia, which has maintained economic relations with Iran, is opposed to the drafted resolution.

Given the complexity over the sanction proposal, “Japan, on its part, will not make a move, though it is necessary to closely monitor developments,” the source said in reference to the draft.