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. Japan braces to lose part of Iranian oil mega-project
TOKYO, Oct 6 (AFP) Oct 06, 2006
Japan said Friday that it could lose part of its stake in a project to develop Iran's largest onshore oil field amid a deadlock in talks and possible sanctions on Tehran over its nuclear program.

Media reports said Iran had told Japan it would have only a 10 percent stake in the Azadegan oil field, not the 75 percent agreed to when the two countries signed the two billion-dollar deal in 2004.

"The talks are continuing over the overall framework of the development but changes are possible," Japanese Trade and Industry Minister Akira Amari said when asked about the reports.

Japan's government-backed oil developer Inpex and the Iranian oil ministry have failed to reach an agreement over the oil field, according to Iranian news reports.

National Iranian Oil Managing Director Gholam Hossein Nozari told the Fars news agency this week that Japan had "lost their chance" due to stalling.

Nozari was quoted as saying in later reports that Japan's share in the oil field will be a mere 10 percent.

Inpex officials declined to comment on the reports and refused to discuss the status of their negotiations with Iran.

But analysts have speculated that Japan may be deliberately stalling as it expects Iran to face sanctions over its nuclear program that would make the oil field a poor investment.

Japan had earlier defied pressure from the United States, its closest ally, to cancel the deal, which was seen as important for Iran's integration in the world economy at a time that it is threatened sanctions.

Japan, the world's second largest economy, is almost entirely dependent on the Middle East for its oil and imports about 15 percent of its total oil consumption from Iran.

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