US puts pressure on Japan to spurn Iranian oilfield plan

TRY LIBYA: Japan is not enormously receptive to Washington's interference on the issue, seeing that it has virtually no energy resources to call its own


Sun, Aug 08, 2004 - Page 11

The US has suggested to Japan that it invest in Libya's oil industry instead of a project to tap Iran's giant Azadegan oilfield that has irked Washington, a Bush administration official said on Friday.

The US, which has sanctions against US companies doing business in Iran, has persistently expressed its disappointment that its close ally, resource-poor Japan, would invest in the Islamic Republic in a US$2 billion project.

If Japan moves its business to Libya it would be symbolic because the US has touted the North African country as a model for nations, such as Iran and North Korea, to persuade them to scrap suspected nuclear arms programs.

Weapons of mass destruction

Last December, Libya decided to abandon weapons of mass destruction and in return won US economic and diplomatic rewards that could help its oil industry boom.

"We understand their energy needs," the administration official, who asked not to be named, said.

"But there is no question that we are emphasizing that Libya is an alternative that is going to come online soon," the administration official said.

Washington is increasingly worried about Iran's suspected nuclear programs.

Look elsewhere

The US government has encouraged Japan to look elsewhere, a State Department official said without specifying that Washington was promoting Libya as an alternative arena for investment.

The Japanese Embassy in Washington said that it had no comment.

The administration official said Japan was sensitive to increasing US concerns about Iran.

The official nonetheless said that Japan had not indicated that it would withdraw from an oilfield, which is about the size of Tokyo.

Azadegan's estimated 26 billion barrels of reserves is one of the world's largest untapped finds.

It also represents one of Tehran's biggest international business deals since the 1979 Islamic revolution.