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U S asks Japan to stop Iran oil development-paper

Written by: Staff

TOKYO, Mar 23 (Reuters) The United States has asked Japan to suspend plans to develop an Iranian oil field as part of efforts to prevent Iran from obtaining nuclear weapons, a Japanese newspaper today said. Resource-poor Japan has been planning to develop Iran's Azadegan oil field, estimated to hold the world's second-biggest single oil reserve, despite objections from Washington.

According to U.S. government sources quoted by the Sankei Shimbun, U.S. Deputy Secretary of State Robert Zoellick and Undersecretary of State Robert Joseph have informally asked Japan to at least temporarily suspend plans to develop Azadegan.

But Japan's top government spokesman, Shinzo Abe, said Tokyo's plans to develop Azadegan were not currently a topic of discussion with the United States and added that the project was vital for Japan's aim of securing stable energy supplies.

The report comes a week after Japan's largest refiner, Nippon Oil Corp., said it would cut imports of Iranian crude due to rising risks associated with the country, the first hint that Tehran's nuclear dispute is affecting its vital oil trade.

The U.S. request was based on the belief that developing the field would provide income for Iran that could support nuclear activities and make it hard for the international community to present a united front in dealing with Iran, the newspaper said.

It said there was a movement within the U.S. Congress to make a similar request.

Asked about Azadegan, Japan's Abe said Tokyo would pay heed both to nuclear non-proliferation and its own energy needs.

''It is not the case that the Japanese government is holding concrete discussions at this juncture with the United States regarding the future direction of the development of the Azadegan oil field,'' said Abe, the chief cabinet secretary.

''We would like to deal with this firmly based upon our basic recognition that both ... the nuclear non-proliferation issue and stable crude oil supplies are important,'' he told reporters.

ENERGY SECURITY John Bolton, U.S. ambassador to the U.N., predicted Tokyo would maintain its strong record of opposition to proliferation of weapons of mass destruction.

''I have always believed Japan has an excellent record against WMD proliferation ... but I understand the need for energy in Japan and the risk that the Iranians will try and take unfair advantage of that,'' Bolton told reporters in New York.

''So I think that is a legitimate concern on Japan's part but I am confident that they will be true to their non-proliferation principles.'' Japan sealed a deal with Iran two years ago on a billion-dollar project to develop Azadegan.

The Japanese government has a 36 percent stake in INPEX Corp., Japan's biggest oil developer, which plans to develop the southern part of Azadegan, estimated to hold 26 billion barrels of oil.

The United Nations Security Council, which can impose sanctions, has so far failed to reach accord on a statement calling on Iran to suspend its uranium enrichment activities.

Both Russia and China have balked at approving a draft statement, fearing that threats might escalate and prompt Iran to cut off all contact with the U.N.'s nuclear watchdog agency.

Resource-poor Japan imported almost all of its crude oil needs of 4.2 million barrels per day (bpd) last year, about 90 per cent from the West Asia.

Iran is Japan's third-largest oil supplier, and Tokyo has maintained healthy relations with Tehran even at the expense of upsetting Washington.

But Nippon Oil said last week it would reduce its purchases of Iranian crude by an average of 22,000 bpd to 120,000 bpd this year in view of growing risks related to the country.

The cut represents 2 percent of its refining capacity.

The company will reduce Iranian crude imports via traders but will not change the amount that it purchases through direct long-term contracts with Iran.

A government council said yesterday that Japan should more than double crude oil imports from its equity oilfields in the next 25 years to improve energy security.

Reuters SY DB2304

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