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Iran official says Japan may be allowed to rejoin oil field project

Kyodo

A senior Iranian Oil Ministry official said Monday that it may be possible for Japan to resume participation in an oil field development project from which it withdrew nearly five years ago due to effects of strengthened U.S. sanctions against Tehran over its nuclear ambitions.

Japan’s return to the project Azadegan project in southwestern Iran would signal the Middle Eastern country’s desire to make use of Japanese companies’ technical capabilities.

The Iranian government was dissatisfied with the contributions of a Chinese firm following Japan’s withdrawal and is apparently hoping that the recent agreement between Iran and six major powers to curb its nuclear program may prompt Japan to come back to the project.

When Japan withdrew in 2010, then-Oil Minister Masoud Mir-Kazemi showed a certain degree of understanding that Japan’s action resulted from the United States’ position, but noted that Tokyo may not be able to take part in such projects in the future.

The senior official said Monday the final decision on whether to accept Japan rests with current Oil Minister Bijan Namdar Zangeneh but added that he has a favorable view concerning Japan’s participation in Iran’s oil projects.

Tokyo-based Inpex Corp., partly owned by the Japanese government, had a stake in the project to develop the Azadegan field, considered to have one of the largest crude oil reserves in the Middle East. It had to pull out after the United States reinforced its sanctions on Iran.

After that, China National Petroleum Corp. acquired a stake. Iran, however, said in April 2014 that it dissolved its contract with the Chinese state-run company due to delays in development.

Iran, one of the world’s major oil producers, plans to announce in September a new contract format for oil and natural gas development. It has been reviewing the current format, which is believed by many to be disadvantageous to foreign investors.

Iran, the United States, Britain, China, France, Germany and Russia reached a historic deal July 14 to resolve the issue of Tehran’s nuclear development diplomatically, with Iran pledging to curb activities such as uranium enrichment.