May 10, 2018 / 4:15 AM / a year ago

Japan's Inpex may drop bid for Iran's Azadegan oil project

TOKYO, May 10 (Reuters) - Japan’s biggest energy explorer, Inpex Corp, said on Thursday it may drop its second attempt to join in developing Iran’s South Azadegan oilfield after U.S. President Donald Trump said he will re-impose sanctions on Tehran.

The company was forced to relinquish a 10 percent stake in Azadegan in 2010 because sanctions by the United States on Iran made it difficult to access financing for the project.

According to energy consultants Wood Mackenzie, the Azadegan fields are considered one of the world’s biggest oil discoveries of the past 30 years with an estimate of about 33.2 billion barrels of oil in place. Oil production at the fields was planned to reach 600,000 barrels per day.

The lifting of the sanctions in 2016 after an international agreement on Iran’s nuclear programme had opened the way for Inpex to again participate in developing the oilfield.

“We recognise that it has become difficult for us to engage in activities for the bidding” after Trump’s decision this week, an Inpex spokeswoman told Reuters by phone.

President Trump on Tuesday said he was pulling out of the multi-party nuclear agreement and will reinstitute U.S. sanctions against Tehran that were suspended under the 2015 accord.

Inpex remains interested in participating in Iran’s oil and gas sector because of its “high potential” and would be interested in joining the project if the situation changes, the Inpex spokeswoman said.

In August 2017, Inpex joined a workshop held in Iran on the South Azadegan field to gather information for the bidding, the spokeswoman added, without giving further details on the status of the bidding process due to a confidentiality agreement.

The news service for Iran’s oil ministry reported on May 7 that the country planned to tender 14 exploration blocks and Iranian energy officials said that the country’s oil industry would continue to develop despite any new U.S. sanctions.

Reporting by Osamu Tsukimori; Writing by Aaron Sheldrick; Editing by Christian Schmolinger

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