Iran confirms Japan oil deal stake slashed to 10 percent

Iran confirms Japan oil deal stake slashed to 10 percent

Japanese firm Inpex will only take a 10 percent stake in a project to develop Iran’s largest onshore oil field and the main contract will go to an Iranian company, the oil minister has said.

The comments by Oil Minister Kazem Vaziri-Hameneh came after a swathe of conflicting reports over Inpex’s final stake in Azadegan oil field, which was agreed at 75 percent when the two-billion-dollar deal was signed in 2004.

The share of Inpex “has been cut from 75 percent to 10 percent in the project to develop the Azadegan oil field,” Vaziri-Hameneh said, according to the Mehr news agency Sunday.

“The Naftiran Intertrade Company (NICO) will be put in charge of the operations,” he added, referring to the Iranian company which was Inpex’s original partner in the project.

Vaziri-Hameneh had the day earlier described reports the stake had been slashed to 10 percent as “not precise” and insisted that talks between the two sides were continuing.

“It is still possible that the Japanese participate with a share of 75 percent in the project,” he told state television late on Saturday.

The Kyodo news agency had on Saturday quoted a top Iranian oil official as saying Japan could regain a majority share if “Inpex solves its domestic problems.”

It remains to be seen in the light of Vaziri Hameneh’s latest comments whether Iran is still leaving the door open to for Japan lift its stake in the project at a later date.

Analysts have speculated Japan could have held the talks up amid the looming threat of sanctions against Iran and US pressure on Tokyo not to cut a deal with Tehran at a time of tension over the Iranian nuclear programme.

Iran could also face now problems financing largely on its own the development of Azadegan — which lies in southwestern Iran close to the Iraqi border — with Japan playing a more minor role than originally intended.

The deal, signed in February 2004, targeted production of 260,000 barrels of oil per day from Azadegan, which has an estimated 26 billion barrels in place. Work had been due to start on the oil field by March 2005.

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