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Japan's Inpex quits Iran oilfield project

Tokyo, October 15, 2010

Inpex Corp, Japan's top oil explorer, has pulled out from Iran's Azadegan oil field project as expected, after US sanctions against Iran over its nuclear programme posed a potential threat to the company's business.   

Inpex, which has invested 12.5 billion yen ($153 million) in the giant project, said on Friday that the agreement with state-run National Iranian Oil Company (NIOC) would have only a limited impact on its earnings.   

It said it had no plans to change its group earnings projections for this business year.   

Inpex had been weighing a withdrawal from Azadegan to avoid possible harm to its business, as it would have faced problems raising funds from US financial institutions and its global development projects could have been hindered if it were subject to US sanctions.   

Japan's trade minister said earlier this month that Inpex, which had a 10 percent stake in the Iranian oil field, was not on a list of firms targeted by US sanctions against Iran, implying that the pullout was already in the works.
   
NIOC had 90 percent stake in the project before the Inpex pullout.

"After proper consultations with the Japanese government, we chose to withdraw," an Inpex spokesman said. "We no longer own the 10 percent stake."    

The spokesman added that the company did not expect to pay compensation to Iran, but he did not specify whether the company would recover its investment in the project.

Azadegan was the Opec member's biggest oil find in 30 years when announced in 1999, with oil-in-place of 26 billion barrels and recoverable resources then estimated at about 6 billion barrels, and it is expected that it will cost at least $2 billion to develop. - Reuters




Tags: Iran | Japan | Sanctions | Inpex | oil field |

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