C O N F I D E N T I A L TOKYO 006160
SIPDIS
SIPDIS
E.O. 12958: DECL: 10/19/2016
TAGS: ENRG, PREL, PGOV, JA
SUBJECT: MOFA PAINTS AZADEGAN CONTRACT CHANGE IN POSITIVE
LIGHT
REF: TOKYO 6074
Classified By: Ambassador J. Thomas Schieffer. For reasons 1.4 (b,d)
1. (C) Ministry of Foreign Affairs (MOFA) Deputy Director
General for Middle Eastern Affairs Hideki Ito told EMIN on
October 20 that Inpex's reduction in ownership of the Iranian
Azadegan oil field from 75 percent to 10 percent has
effectively delayed the start to the project by at least a
year. Ito saw this as a step backward for Iran rather than
forward and emphasized that this meant Japanese funds would
now flow out of Iran rather than in. He stressed that the
GOJ fully understands the sensitivity of the matter and would
continue to keep Washington informed at each new stage. Ito
noted there was absolutely no difference in views between the
two governments on the subject of Iran. He also pointed out
that the Iranians often speak to the press about issues that
have not been fully decided, which leads to misunderstandings.
2. (C) Comment: Ito's assertion that the United States and
Japan have a unified view on Iran, at least with respect to
the Azadegan project, omits Japan's long term strategy of
diversifying its sources of energy including from Iran. MOFA
has always supported the USG on banning trade with Iran,
while the Ministry of Economy, Trade and Industry (METI) - as
partial owner of Inpex - has been much more reluctant to pull
the plug on the Azadegan project. For Inpex, this turn of
events is a mixed blessing. On the one hand, the company has
lost prestige for its failure to develop this huge and
important field. On the other hand, the international
opposition to Iran's nuclear program has made it increasingly
politically difficult for Inpex to remain in Iran even as the
terms of the deal the company struck with Iran have started
to look less and less economically feasible.
3. (C) Bio note: Ito told EMIN that despite his excellent
English he was actually an Arabist. Second Middle East
Division official Junichi Sumi, who also attended the
meeting, spoke excellent English while noting he was a Farsi
specialist and had spent three years studying in Teheran.
SCHIEFFER