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Staff writer

Foreign Minister Masahiko Komura plans to visit Iran and Saudi Arabia in mid-July to try and put Japan’s relations with the major oil-suppliers on a stronger footing, government sources said Wednesday.

Although exact dates for Komura’s visits to Tehran and Riyadh have not been set through diplomatic channels, he will most likely leave Tokyo immediately after the expected July 7 close of the current ordinary Diet session, the sources said.

Japan relies on the Persian Gulf region for about 80 percent of its crude oil imports, the highest ratio since the first oil crisis, in the early 1970s. Iran and Saudi Arabia together supply nearly 30 percent of Japan’s crude oil.

When Iranian Foreign Minister Kamal Kharrazi visited Tokyo in December, Komura accepted an invitation to visit Tehran sometime in 1999. Kharrazi was the first Iranian foreign minister to visit Japan in nearly 11 years.

Komura will be the first Japanese foreign minister to visit Iran in nearly eight years. The last foreign minister to visit Tehran was Taro Nakayama, in May 1991. Nakayama made his visit only weeks after the end of the Persian Gulf War between the United States-led multilateral forces and Iraq, which followed Iraq’s invasion of Kuwait in the summer of 1990.

In Tehran, Komura is expected to meet with President Mohammad Khatami, Kharrazi and other Iranian officials. Khatami, a liberal cleric and staunch advocate of greater political and religious freedom, won a surprise landslide victory over a candidate backed by the country’s conservatives in the May 1997 presidential election.

Relations between Tokyo and Tehran have failed to develop smoothly, especially since the U.S. administration of President Bill Clinton was inaugurated in early 1993.

The Clinton administration has pursued a policy of “dual containment” against Iran and Iraq, accusing Iran of sponsoring terrorism, sabotaging the Middle East peace process, developing weapons of mass destruction and abusing human rights. Tehran has consistently denied the charges.

In May 1993, Japan lifted a nearly 18-year-old freeze on fresh official yen loans to Iran, providing 38.6 billion yen as the first of three planned installments totaling some 120 billion yen for a hydroelectric power project on the Karun River in southern Iran.

But under formidable pressure from the Clinton administration, Japan froze disbursement of the second tranche of yen loans — worth about 48 billion yen — originally planned for 1994. Iran has repeatedly expressed a strong desire for early resumption of the yen loans to continue the project.

Although Tokyo cannot provide the second installment in the near future, it plans to extend about 6 billion yen worth of yen loans as early as this summer as part of the first installment.

The first installment, 38.6 billion yen, funded construction of the foundation for the Karun River power project. But an additional 6 billion yen or so is deemed necessary to complete that portion because Iran now faces a funds shortage due currency exchange fluctuations and other factors, the sources said.

The sources also said that Kishiro Amae, director general of the Foreign Ministry’s Middle Eastern and African Affairs Bureau, will visit Washington next week to talk with the Clinton administration about making an additional loan provision for Iran’s project.

“We do not expect officials of the Clinton administration to support our plan to make the additional loan provision,” one source said. “But we expect them to at least connive with us.”

If the results of Amae’s talks with U.S. officials in charge of Iran policy go well, Komura could announce the additional loan provision when he visits Tehran in mid-July, the sources said.

In Riyadh, Komura’s main priority will be to attempt to extract a firm commitment from Saudi Arabian leaders to renew Japan’s crucial oil-drilling rights off the Arab nation’s Persian Gulf coast.

Arabian Oil Co., Japan’s largest oil producer and one strongly backed by the government, holds exclusive rights to drill oil in the Khafji oil field, located in the former neutral zone between Saudi Arabia and Kuwait.

Komura’s visit will come at a very delicate time because Arabian Oil is to lose its preferential right to negotiate the Khafji oil concession at the end of June. Oil produced by the company in the Khafji field accounts for about 5 percent of Japan’s crude oil imports.

Although the current agreement granting exclusive oil-drilling rights in the field to Arabian Oil is to expire in the spring of next year, Saudi Arabia has not yet pledged to renew the agreement, despite repeated Japanese requests for such a commitment.

Saudi Arabia has set two primary conditions for renewing the Khafji oil-drilling agreement — a significant increase in Japanese direct investments and a sharp rise in Japanese oil imports.

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