By Bayan Rahman in Tokyo Published: August 20 2000 16:06GMT | Last Updated: August 20 2000 21:01GMT A high level Japanese government delegation will this week visit Iran, Japan's third-largest source of oil, for energy talks which could lead to deeper ties between the two before the ending of US sanctions on Iran. Japan hopes the talks could lead to contracts for Japanese companies that are looking forward to the expiry next year of the US's Iran-Libya Sanctions Act that targets non-American companies that do business in Iran. While Japan has officially toed the US line, it has done so reluctantly. Hirobumi Kawano, head of the Natural Resources and Energy Agency, part of the Ministry of International Trade and Industry, will meet Mehdi Hosseini, Iran's deputy oil minister, who had visited Tokyo in May. Miti officials said the talks would focus on broad energy issues and would not cover financial aid or investment. However, the talks are significant for Japan, which receives 85 per cent of its oil imports from the Middle East and is looking to improve ties with producers after Arabian Oil, a Japanese oil developer, lost a concession in Saudi Arabia's Neutral Zone in February. Some Japanese officials blame the loss of the four- decade contract on Japan's weak bargaining position with Saudi Arabia, which is Japan's second largest source of oil after the United Arab Emirates. "Japan felt it didn't have a bargaining chip in the talks with the Saudis and the feeling is [their position would have been stronger] if only the Japanese could have argued that they would go to Iran instead," said Kazuo Takahashi, associate professor of international studies at Hoso university. Japan is also eager to improve ties with Iran because of concern that China will increasingly compete for Iran's oil and win business contracts there. China is building five 300,000-ton supertankers for Iran after winning the $370m contract last year, according to China's Xinhua News Agency, a blow to Japanese manufacturers. Talks this week, which could pave the way for Mohammed Khatami, Iran's pro-reform president, to visit Japan this year, are also symbolic of Japan's divergence with US policy towards Iran. Last year Japan pledged a Y7.5bn ($69m) loan to Iran to complete a dam in Khuzestan. Japan had suspended yen loans in the mid-1990s under US pressure. Japanese companies fear they may be left behind European, Chinese and even US companies poised to make contracts with Iran with the end of sanctions. _______________________________________________ Crashlist resources: http://website.lineone.net/~resource_base To change your options or unsubscribe go to: http://lists.wwpublish.com/mailman/listinfo/crashlist
