Kuwait has asked Japan to delay signing some parts of the drilling contract it has drawn up with Arabian Oil Co. of Japan, industry sources said Tuesday.
The request is expected to make it difficult for Arabian Oil to reach its goal of sealing the deal with the Kuwaiti government in early September. The company is trying to extend its rights to drill on the Kuwaiti side of the Khafji oil field. The rights are set to expire in January 2003.
The sources said Kuwait has been reluctant to promise Japan a steady supply of crude oil, which is one of the Japanese side's main conditions. It has also requested that the contract's duration be shortened to no more than five years, instead of the 10 to 20 years being sought by Japan.
Economy, Trade and Industry Minister Takeo Hiranuma and Kuwaiti Oil Minister Adel Khaled al-Subeih agreed in July in Kuwait to extend the rights and to work out details of the agreement before Sept. 5 and Sept. 6, when al-Subeih is scheduled to come to Tokyo to sign it.
Kuwait's unexpected request, however, is likely to postpone the visit and reflects a conflict between the Kuwaiti government and parliament.
While the Kuwaiti government intends to develop oil fields in cooperation with foreign developers, parliament wants the country to promote development by itself under the Constitution, which says natural resources belong to the state.
The Kuwaiti government is waiting to see how parliament will discuss the issue after opening in September, the sources said.
Under the agreement between Hiranuma and Subeih, Arabian Oil operates in the field on behalf of the Kuwaiti government instead of owning concessions for the drilling.
"The Japanese government will never give up trying to secure steady supplies of crude oil and will continue making efforts to enable Arabian Oil to take the initiative in the operations," METI said.
Arabian Oil failed to renew its drilling rights on the Saudi Arabian side of the oil field in February last year. Talks on extending the rights broke down over a Saudi demand that Japan build a major railway in exchange for the renewal.
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