Iran talking to Western firms on Azadegan oilfield

October 22, 2006 - 0:0
DOHA (Reuters) - Iran is in talks with two Western oil companies to replace Japan's INPEX Holdings Inc. in developing its giant Azadegan oilfield, Iran's oil minister said on Friday.

Earlier this month it was announced that INPEX had lost its 75 percent right to lead the $2 billion-plus development of Azadegan but will retain a token 10 percent share in the OPEC member's biggest find in three decades.

"We are in negotiations with two companies and we hope that one of them comes to a final agreement," Iran's Kazem Vaziri-Hamaneh told reporters. He described the firms as "Western companies."

The minister, speaking to reporters after an OPEC meeting in Doha, said he felt there had been pressure from Washington on Japan to back away from the project.

"Unfortunately, it seems, yes," he said.

He declined to name the companies Iran is now in talks with or give a timeframe for any deal to be reached. "If they reach the agreement you will know the name," he said.

The reduction of Japan's stake in Azadegan is a political victory for the United States, which has opposed Japan's investment in Iran and stepped up pressure this year over Tehran's nuclear work.

INPEX said Iran's delay in clearing land mines from the area as well as spiraling investment costs caused the cut, but Iran has threatened for months to strip Japan of the rights if it did not move more quickly to begin drilling.

Azadegan was Iran's biggest oil find in 30 years when announced in 1999, with oil-in-place of 26 billion barrels and recoverable resources then estimated at about 6 billion barrels.