Japan's Inpex Corp. has started intense negotiations with National Iranian Oil Co. to develop the Azadegan oil field in southwestern Iran and is a strong candidate for the contract, a high-ranking Iranian official has said.

Inpex signed a memorandum of understanding for the project last June, and the passing of a six-month study period means a final proposal is expected soon, said Noreddin Shahnazizadeh, managing director of Iran's Petroleum Engineering and Development Co.

Inpex — which previously held a stake in the project but pulled out in 2010 amid U.S. sanctions on Iran — was the first foreign company to sign a memorandum last year over the oil field, one of the largest in the world.