Inpex awaits Irans word on mine clearance

Tokyo, May 17 | Updated: May 18 2006, 05:30am hrs
Inpex Holdings Inc., Japans biggest oil explorer, said its still waiting to hear from Iran whether mine clearance at the Azadegan oilfield is completed, a necessary step before developing the Middle East nations biggest oil discovery in more than three decades.

We want to start as soon as we receive the okay, Director Matsuhisa Fujii said on Tuesday. No change has been made to our plan to develop the field.

Iran may transfer Inpexs 75% stake in developing the Azadegan oilfield to a domestic contractor if the project doesnt move forward, the Tehran Times said on May 14, citing an official with the state-run National Iranian Oil Co it didnt identify.

Japans government in March said it wont give up the $2.5 billion project amid US pressure to end Irans nuclear programme.

Japan, which imports almost all its oil, is boosting investment in overseas fields as competition intensifies with China and India to secure supplies. Inpex is waiting for its Iranian partner to clear landmines planted at the field at the time of the Iran-Iraq war.

Mine clearance was originally to be completed within March, but its taking more time, Fujii said. We dont know when we can start work on the field.

Iranian companies are able to develop the field themselves, the official at National Iranian Oil said, insisting Inpex fulfill its contract obligations, the Tehran Times reported. Inpex won the rights to develop Azadegan in February 2004. The production target for the field is 260,000 barrels of oil a day by 2012. Bloomberg

Tokyo-based Inpex is facing unexpected costs to develop the Azadegan field, Deputy Oil Minister Seyed Mehdi Mirmoezzi said on Dec 5, without providing a figure. Mirmoezzi said at the time he hoped to complete the contract by March 2006.

An Iranian oil official, Naji Saduni, said in September that Inpex risked losing the contract because the company had made little progress. The company, which has yet to announce a foreign partner as it seeks to reduce risks and costs, had blamed the development delay on the mine clearance. Iraq planted as many as 16 million landmines in Iran in the 1980s.

Iran is holder of the worlds second-largest reserves of crude oil and natural gas.

Bloomberg