Japan inks major oil deal with Iran over U.S. objections

Friday, February 20, 2004

Japan, overriding U.S. opposition, plans to develop an Iranian oil field that contains estimated reserves of 26 billion barrels.

A Japanese consortium supported by the government in Tokyo said it will develop an Iranian oil field at Azadegan in a $2 billion deal. Under the accord, the Japanese consortium would obtain a 75 percent stake. Iran's state-owned oil company was given the remaining interest, Middle East Newsline reported. The field was expected to begin oil production in mid-2007.

U.S. officials said they were informed of the Japanese deal with Iran earlier this week. They said the Japanese project would bolster the Iranian regime at a time when it is pursuing nuclear weapons.

"Our policy has been, with respect to Iran, to oppose petroleum investment there," State Department spokesman Richard Boucher said. "We remain deeply concerned about deals such as this."

U.S. intelligence officials say Iran is advancing its missile and weapons of mass destruction programs with the assistance of China and North Korea, has reported.

China, which in 2002 announced export controls on military and dual-use technologies, produced the components and exported them through North Korea to avoid U.S. sanctions, the sources said.

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