Victory
30-12-05, 15:14
Inpex pushes ahead with Iran oil field, Ignoring concerns expressed by the U.S
By HITOKI NAKAGAWA, The Asahi Shimbun
Ignoring concerns expressed by the U.S. government, Inpex Corp. plans to begin development of the Azadegan oil field in Iran next year, sources said.
If the work begins, it would be the biggest oil field developed mainly under a Japanese initiative.
U.S. government officials had raised concerns to their Japanese counterparts about investment in Iran due to the country's suspected nuclear weapons development program.
Officials of the Japanese government, a major shareholder in Inpex, had urged caution in pushing ahead with development of the Azadegan field. But Inpex officials said any further delays could jeopardize their exclusive rights to the oil fields.
Azadegan is estimated to have reserves of about 26 billion barrels. Development of that oil field would be the biggest handled by Japanese interests since the Khafji oil field, which was held by Arabian Oil Co. before it lost drilling rights to Saudi Arabia in 2000.
Inpex officials said Iran plans to end mine clearing around the Azadegan site next spring. Development will begin before the end of 2006.
If development proceeds according to schedule, production is expected to begin in 2008, a year later than initial forecasts.
Total development costs are estimated at between 100 billion and 200 billion yen.
Preparations for drilling and construction of facilities began in October 2004. The environmental impact assessment was approved last July.
Plans call for daily production of 150,000 barrels in 2009 and about 260,000 barrels by 2013.
In fiscal 2004, Japan imported about 4.17 million barrels of crude oil daily. Of that figure, crude oil from fields developed under Japanese initiative accounted for 450,000 barrels.
If 260,000 barrels of crude oil are produced daily at Azadegan, the share of Japan's imports covered by Japanese development would rise from 10 percent to 17 percent.
Inpex holds 75 percent of the concessions to Azadegan, with Iranian interests holding the rest.
Inpex plans to sell about 20 percent of its concessions to foreign companies in an attempt to reduce its own risks. Among the potential companies that could buy the concessions is the French petroleum concern Total.
Inpex signed a contract for the Azadegan interests in February 2004.
Other petroleum companies, such as Royal Dutch/Shell Group, had withdrawn from the project on the grounds of questionable profitability.
The United States has also been critical of investment in Iranian oil fields because of concerns that Tehran was developing nuclear weapons.
A senior official of Japan's Ministry of Economy, Trade and Industry admitted that development of Azadegan would be difficult without a resolution of suspicions about Iran's nuclear program.
However, Inpex cannot afford to drag its feet on oil development in Azadegan because of heightened competition among foreign companies to gain a foothold there. In addition to European companies, Chinese firms are eyeing Iran as a development site.
An Inpex official indicated the company would seek to gain the understanding of the Japanese and U.S. governments by arguing that oil development should be separated from the question of Iran's suspected nuclear weapons development.(IHT/Asahi: December 30,2005)
By HITOKI NAKAGAWA, The Asahi Shimbun
Ignoring concerns expressed by the U.S. government, Inpex Corp. plans to begin development of the Azadegan oil field in Iran next year, sources said.
If the work begins, it would be the biggest oil field developed mainly under a Japanese initiative.
U.S. government officials had raised concerns to their Japanese counterparts about investment in Iran due to the country's suspected nuclear weapons development program.
Officials of the Japanese government, a major shareholder in Inpex, had urged caution in pushing ahead with development of the Azadegan field. But Inpex officials said any further delays could jeopardize their exclusive rights to the oil fields.
Azadegan is estimated to have reserves of about 26 billion barrels. Development of that oil field would be the biggest handled by Japanese interests since the Khafji oil field, which was held by Arabian Oil Co. before it lost drilling rights to Saudi Arabia in 2000.
Inpex officials said Iran plans to end mine clearing around the Azadegan site next spring. Development will begin before the end of 2006.
If development proceeds according to schedule, production is expected to begin in 2008, a year later than initial forecasts.
Total development costs are estimated at between 100 billion and 200 billion yen.
Preparations for drilling and construction of facilities began in October 2004. The environmental impact assessment was approved last July.
Plans call for daily production of 150,000 barrels in 2009 and about 260,000 barrels by 2013.
In fiscal 2004, Japan imported about 4.17 million barrels of crude oil daily. Of that figure, crude oil from fields developed under Japanese initiative accounted for 450,000 barrels.
If 260,000 barrels of crude oil are produced daily at Azadegan, the share of Japan's imports covered by Japanese development would rise from 10 percent to 17 percent.
Inpex holds 75 percent of the concessions to Azadegan, with Iranian interests holding the rest.
Inpex plans to sell about 20 percent of its concessions to foreign companies in an attempt to reduce its own risks. Among the potential companies that could buy the concessions is the French petroleum concern Total.
Inpex signed a contract for the Azadegan interests in February 2004.
Other petroleum companies, such as Royal Dutch/Shell Group, had withdrawn from the project on the grounds of questionable profitability.
The United States has also been critical of investment in Iranian oil fields because of concerns that Tehran was developing nuclear weapons.
A senior official of Japan's Ministry of Economy, Trade and Industry admitted that development of Azadegan would be difficult without a resolution of suspicions about Iran's nuclear program.
However, Inpex cannot afford to drag its feet on oil development in Azadegan because of heightened competition among foreign companies to gain a foothold there. In addition to European companies, Chinese firms are eyeing Iran as a development site.
An Inpex official indicated the company would seek to gain the understanding of the Japanese and U.S. governments by arguing that oil development should be separated from the question of Iran's suspected nuclear weapons development.(IHT/Asahi: December 30,2005)