IRAN - July 1 - Japan Responds To US Pressure Over Oil Deal With Tehran.

Japanese chief cabinet secretary Yasuo Fukuda says Tokyo will take into consideration international concern about Tehran's nuclear activities when it signs an oil deal with Tehran. Fukuda urges Tehran "to address the allegations" surrounding its nuclear development programme and says: "We are unlikely to sign a contract over crude oil that sets aside concern about Iran's nuclear programme". (Fukuda's comments come in response to US opposition to Japan signing a $2 bn deal to develop the Azadegan oilfield in the south-west of the Islamic Republic. The deal would give Japan access to one of the Middle East's most significant oilfields and would provide the Islamic Republic's volatile economy with fresh investment in its energy sector. US pressure on Japan to scrap the deal mounted as negotiations drew closer to the June 30 deadline, with US State Department spokesman Richard Boucher saying: "We would be opposed to such investment at any time, but it is certainly true that given recent revelations about Iran's nuclear programmes, and efforts being made through the International Atomic Energy Agency to deal with the threats Iran poses, this would be a particularly unfortunate time to go forward with major new oil and gas deals"). The June 30 deadline expired without an agreement being reached but both Tehran and Tokyo officials blamed differences over economic evaluation of the project rather than US pressure. An official at Japanese Trade and Industry Ministry said negotiations between Tehran and the Japanese consortium, which comprises state-backed oil companies Inpex and Japan Petroleum Exploration and privately run trading company Tomen, were continuing. The Middle East deadlines were "always moveable", he said, adding: "These negotiation targets aren't so rigid. It was just a target not a limit on negotiations". One Japanese official described the Azadegan oilfield as "symbolic for the two countries in terms of energy and investment" and said Japan would be reluctant to allow outside political pressure to influence it. But Kazuo Takahashi, assistant professor at Hoso University who has visited Azadegan, said Japan might bend to US pressure if the nuclear issue was not resolved soon. He said: "It will be difficult for Japan to continue with the deal if the US is criticising it so explicitly. But Japan will never openly say it has backed own. It will just continue to negotiate for ever without reaching an agreement".