Japan renewed all its oil purchase contracts with Iran for a year and plans to increase Iran's oil export to the Southeast Asian country by 350,000 barrels per day.
"Contracts call for providing Japanese refineries with more than 130,000 bpd for a year. Nonetheless, serious negotiations are underway to have a threefold increase in oil export to the South Asian state," Mohsen Qamsari, director of international affairs at the National Iranian Oil Company, told Mehr News Agency.
Commenting on Iran's share in Japan's oil market, standing at 5% currently, the official added that plans have been made to raise the share to 10%, that is 350,000 bpd, as Japan is not only a traditional, strategic customer but its oil officials have also expressed their willingness to increase import from Iran due to its quality crude.
"Saudi Arabia, the UAE, Kuwait, Qatar, Russia and Mexico account for 32%, 22.4%, 9.1%, 8.3%, 8% and 2.73% of Japan's oil market respectively," he said.
According to Qamsari, Iran's return to the market has coincided with Japan's decreasing crude refining capacity.
In other words, the country's refining capacity has declined from 5.5 to 3.5 million bpd, because of which the competition among oil producers for gaining the lucrative market has become more intense recently.
"Iran's high quality crude compared to that of other competitors is definitely a bargaining chip to capture Japan's oil market," he said, noting that Iran has always been a reliable supplier for Japanese refiners even under the worst geopolitical circumstances.
Japan's JX Nippon Oil & Energy Corp., whose import stood at 53,000 in 2015, has already announced its readiness to raise its import from Iran in 2016.
According to Cosmo Oil Company's CEO Hisashi Kobayashi, Japan's economic conditions will play a major role in increasing oil import from Iran, yet Cosmo is hopeful of expanding cooperation with NIOC.
Idemitsu Kosan and Showa Shell, which are being merged, are among other key Japanese refining plants to purchase NIOC's crude. Asked about the merger, Qamsari said, "It is such a good piece of news as both enterprises have long-term relations with NIOC, which guarantees close cooperation."
Energy Cooperation
Speaking on the sidelines of Iran-Japan's second water and wastewater joint cooperation convention, Sattar Mahmoudi, Iran's acting energy minister, said the two states' private sectors should boost collaboration, as creating such a perfect economic opportunity is a demanding undertaking.
Pointing to untapped energy resources in Iran, Mahmoudi said, "Iranian experts have already proved their capability in implementing sophisticated projects. Furthermore, with respect to facilities, rate of return on investment, security and reliable human resources, Iran can be a unique place for investment."
According to the official, plans have been made to build power plants with a production capacity of 30,000 megawatts, of which only 45% have been completed. Other plans call for the construction of renewable power plants to generate 5,000 MW.
"Mega projects like building dams and hydroelectric power plants, as well as renovating water and wastewater installations in more than 500 cities are awaiting to be financed by international companies, among which Japanese will be given a top priority over others, as they are willing to transfer their state-of-the-art technology to Iran," he said.
Hamidreza Janbaz, managing director of Water and Wastewater Company, believes that launching joint ventures can help the two states' private sector play a more active role in implementing energy projects.
Referring to the joint credit line to be opened in the near future, Janbaz hoped that a suitable proportion of the credit line can be allocated to undertake water projects.
