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. Japan says talks on Iranian oil deal still alive
TOKYO, Oct 5 (AFP) Oct 05, 2006
Japan insisted Thursday that its talks with Iran over the Islamic republic's largest onshore oil field project were still alive despite Tehran saying that Tokyo has lost its chance to take part.

"We are aware of the report," said a spokesman for Inpex Corp., a government-backed oil exploration company in charge of the two-billion-dollar deal for the Japanese side.

"But we have not officially heard about such a decision from the Iran side at this moment," said the spokesman who declined to be named.

"Therefore, our stance remains unchanged. We are working on our job as we presume that negotiations are still going on."

Japan is dependent on the Middle East for nearly all of its oil and has earlier defied pressure from the United States to cancel the deal.

But Japanese reports have said Tokyo is prepared to let go of the mega-project in anticipation that Iran will face international sanctions over its nuclear program.

After last-ditch talks in Tehran on Wednesday, the Fars news agency quoted Gholam Hossein Nozari, head of the National Iranian Oil Company, as saying the Japanese had "lost their chance."

"We held intense negotiations in the past week and we will not give them another chance," he said.

Iran and Inpex had set a final deadline of September 15 but failed to reach agreement on profit-sharing and the increasing cost of the project, instead setting a new deadline of the end of last month.

The deal, signed in February 2004, targeted production of 260,000 barrels per day of oil from Azadegan, which has an estimated 26 billion barrels of oil in place. Work had been due to start on the oil field by March 2005.

Completing the deal was seen as important for Iran's participation in the world economy at a time when it is threatened with United Nations sanctions over its nuclear program to add to a strict US trade embargo it already endures.

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