Japan will launch talks with Iran toward an investment agreement as Tokyo moves to lift economic sanctions in the wake of the nuclear deal reached in July.
The plan is for Japan to lift sanctions against Iran as soon as the US and Europe do. Behind-the-scenes bilateral discussions have laid the groundwork for working-level talks Tokyo hopes to begin after the sanctions end, Japanese government sources told the Japanese daily newspaper The Nikkei.
Daishiro Yamagiwa, Japan’s Minister of Economy, Trade and Industry, visited Tehran August 8-10 to meet with Iranian Oil Minister Bijan Namdar Zanganeh and Industries, Mining and Trade Minister Mohammadreza Nematzadeh.
Representatives of 21 companies tagged along, hailing from such major trading houses such as Mitsubishi Corp., Mitsui & Co. and Itochu, as well as plant-engineering giant JGC and big-name banks.
Japan in 2010 gave up a stake in the Azadegan oil field, one of the Middle East’s largest, in southwestern Iran. Now that the sanctions will be lifted, Japan wants to get back in. The former stakeholder, Inpex, was among the companies whose representatives accompanied Yamagiwa on his trip.
Japan is eager to restore amicable relations with Iran and secure stakes in resource development projects there. Iran once accounted for more than 10% of Japan’s crude oil imports but saw its share drop to 5% because of restrictions on investments in Iranian energy businesses. Japan now wants to raise the percentage back up.
Tehran appears willing to increase crude oil shipments to Japan in return. Japan sees this as a good business opportunity for its companies so that they do not fall behind the western competition.
Iran, with a population of 78 million, has the world’s fourth-largest reserves of crude oil and largest stocks of natural gas. An increased supply of Iranian crude will help Japan diversify its sourcing networks, said Yasushi Kimura, president of the Petroleum Association of Japan.
Toyo Engineering, which has built refining facilities in Iran, will also look into returning. Nissan Motor is asking parts suppliers whether they can resume shipments to the country. Western countries are expected to lift sanctions at the start of next year, according to Japanese government sources.
