TEHRAN, 28 September 2006 — Iran yesterday issued a new warning to Japan to swiftly finalize a $2 billion deal to develop its onshore oil field of Azadegan or see the project handed to a domestic contractor. “If the Japanese response for development of this oil field is negative, the development operations will start through domestic sources,” Oil Minister Kazem Vaziri Hamaneh said, just two days before an extended deadline expires.
On Sept. 15, Iran extended a repeatedly stretched deadline by another two weeks for Japan to start the development work of the field, which was initially due by March 2005.
The oil minister also ruled out the possibility of holding a new international tender for Azadegan, saying: “We prefer to develop the field by ourselves”. Speaking on state television however he expressed hope that Japan gives a “positive answer”.
In February 2004, Iran and Japan’s Inpex Corp. signed an agreement for the development of Azadegan, Iran’s largest onshore oil field with an estimated 26 billion barrels of oil.
Iran, facing the threat of sanctions for its nuclear program, has warned Japan, a close US ally, not to give in to US pressure to scrap the mega deal. Iranian officials have insisted that they would not accept new terms to increase the cost of the project which has been held up by the process of clearing landmines left from the 1980-88 Iran-Iraq war. Tokyo so far has expressed willingness to finalize the deal because of Tehran’s major energy supply role to Japan, which imports about 15 percent of its total oil consumption from Iran.
Asked about another Iranian oil field development project under negotiation with China, Vaziri Hamaneh said talks were still in progress even though a final agreement was supposed to have been reached by March 20.