Last Updated: Sun Oct 17, 2010 12:37 pm (KSA) 09:37 am (GMT)

Japan to withdraw from Iran oil project: reports

Government-backed Inpex lowered its stake in Iran's Azadegan oilfield from 75 percent to 10 percent in 2006 over fears of sanctions (File)
Government-backed Inpex lowered its stake in Iran's Azadegan oilfield from 75 percent to 10 percent in 2006 over fears of sanctions (File)

The Japanese government and oil developer Inpex Corp. plan to completely withdraw from Iran's largest onshore oil field project to avoid possible U.S. sanctions, reports said Thursday.

The move, which could be announced this week, is to prevent government-backed Inpex being included in a list of companies subject to U.S. sanctions against Iran, the Yomiuri Shimbun and the Nikkei reported, citing government sources.

Iran's Azadegan oilfield, which has about 42 billion barrels of oil, was initially to have been developed with Inpex.

The Japanese company in 2006 significantly lowered its stake from 75 percent to 10 percent over fears of possible sanctions on Tehran over its controversial nuclear program.

"There are various risks, as we were asked by Iran to invest more in the project," an anonymous government official told the Yomiuri.

Japan's Trade Minister Akihiro Ohata told reporters Thursday he has been told that Inpex was considering withdrawing from the project.

"I have heard that it is considering that as a managerial policy," Kyodo news reported him as saying.

Washington and several other nations fear Iran is developing a nuclear arsenal under cover of its atomic energy drive, a charge Tehran denies.

Earlier this month Japan imposed new sanctions against Iran, including an assets freeze on people and entities linked to the nuclear program and tighter restrictions on financial transactions.

The steps came a month after Tokyo approved punitive measures in line with a UN Security Council resolution in June, which slapped a fourth set of sanctions on Iran over its refusal to halt uranium enrichment work.

Inpex spokesman Kazuya Honda said the company has yet to decide on whether to withdraw from the project.

But he added: "After Japan imposed sanctions on Iran on September 3, the government told us to deal with the project with great care. So it's our policy to closely consult with the government over this project."

Iran is the fourth-biggest oil supplier to resource-poor Japan.

Other Japanese companies are also carefully reviewing their Iran operations.

In August Japanese auto giant Toyota suspended auto exports to Iran indefinitely in line with global sanctions against Tehran.

Inpex shares fell 3.67 percent in Tokyo trade Thursday.

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