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Japan Signs Oil Deal With Iran, Defies U.S. Warning
TEHRAN, July 9 (IslamOnline & News Agencies) - Despite U.S. pressure on its allies to refrain from making oil and gas deals with Iran, Japan has signed a letter of intent with the country, agreeing to pay $10 million to participate in a seismic study of the southwestern Azadegan oilfield, which holds a 26-billion barrel oil reserve.
The agreement came in a joint statement issued Sunday evening, following a meeting between visiting Japanese Trade Minister Takeo Hiranuma, Iranian President Mohammad Khatami and Iranian Oil Minister Bijan Namdar Zanganeh, news agencies reported Monday.
"Japan is not affected by U.S. pressure," Hiranuma said during the signing ceremony in Tehran.
The joint statement said that both countries have signed a memorandum of understanding for general cooperation within the energy sector.
Japanese officials said that the two countries also confirmed their support for such involvement in the South Pars gas field, one of the world's largest, and the Ahwaz-Bangestan oil field in western Iran, which are being developed mainly by European concerns, the Japanese news wire reported on its online edition.
Khatami said that Iran ''welcomes cooperation by the Japanese government'' for the development plan.
Hiranuma -- who arrived in Tehran early Sunday for the first visit by a high-ranking Japanese economic official in Iran since the 1979 Islamic revolution -- called for a further "development of relations," particularly in the oil sector.
Hiranuma said that Japan expects ''the president's help to realize the plan as soon as possible.''
The Japanese government and the Japanese industry have been anxiously trying to find new oil fields to develop since Japan's Arabian Oil Co. lost its drilling rights in Saudi Arabia's Khafji oil field in February of last year, Koyodo added.
Hiranuma is visiting Iran on the third leg of his four-nation tour to the Middle East, which has already taken him to Saudi Arabia and Kuwait. He will visit the United Arab Emirates before returning to Japan on Tuesday.
The Middle East visit is aimed at strengthening ties with the top four suppliers of Japan's oil imports.
Last November, while Khatami was visiting Tokyo, Iran gave Japanese firms prime negotiation rights for the development of the oil field.
The Azadegan field is said to be one of the largest untapped oil fields in the world, containing reserves of at least 26 billion barrels of oil and with possible yields of 400,000 or more barrels a day.
The agreement with Iran is the second in two weeks by a U.S. ally defying Washington's threat of sanctions against foreign companies investing more than $ 20 million a year in Iran's oil and gas sectors.
Italian gas and oil group ENI signed a $ 1 billion deal last week to develop the Darkhovin onshore oil field.
Iranian Oil Minister Bijan Namdar Zanganeh said the letter of intent showed the sanctions "have had no effect on the Iranian oil industry."
On Monday, Iran rebuffed a recent U.S. remark on their long-broken ties, saying that the impetus for improving relations should come "from Washington and not Tehran."
On Friday, U.S. Secretary of State Colin Powell told reporters that reformist elements in Iran have "not yet produced a situation where it would be appropriate to not go forward with the 1996 Iran-Libya Sanctions Act (ILSA)."
ILSA is an act ratified by the U.S. Congress in 1996 that bars U.S. companies from investing more than $ 20 million in Iran's gas or oil industry and threatens to punish foreign companies as well.
A statement was made by Iran's Foreign Ministry spokesman Hamid Reza Asefi in response to the remark by Powell that "better ties depend on Iran," news agencies reported.
In August 1996, Washington imposed the ILSA as punishment for foreign investment in Iran and Libya. With the expiration of the act imminent, a powerful pro-Israeli lobby is pressing for another full five-year extension of the controversial legislation.
The United States claims Iran is leading international "terrorism'' and has strongly discouraged investment in the country's energy sector.
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