Japan may block loans for Iran oil project

Tokyo is believed to have already conveyed the stance to the United States, which has opposed the oil development project by Japan's INPEX Holdings Inc., Kyodo news service reported on Saturday, citing sources close to the matter.

It would be hard for INPEX to finance the deal without financial aid from the government, and the company might be forced to withdraw from the project, Kyodo said.

Washington has called for a swift move toward sanctions after Iran missed a U.N. deadline on Aug. 31 to halt uranium enrichment, but the calls have met resistance from some European states and opposition from Russia and China.

Resource-poor Japan has rights to the giant Azadegan oilfield, estimated to hold 26 billion barrels of oil, but talks have stalled since the deal was signed in 2004, when the project was thought to require an investment of $2 billion.

Iran's Oil Minister Kazem Vaziri-Hameneh said this week that INPEX had until Friday to finalise the deal or Tehran would develop the field itself.

The company said on Friday it was not aware of a deadline and it has been making preparations to start work there promptly once the Iranian side completes a mine-clearing mission, but added it did not know how long that work would take. Reuters