Tokyo Wednesday, June 6, welcomed Kuwait's reported readiness to grant Japan's biggest oil producer Arabian Oil Co. (AOC) operational rights in the country under a renewed contract.
"I would like to see, hopefully, negotiations concluded swiftly under conditions satisfying both parties, while observing the Kuwaiti constitution and laws," Japan's Economy, Trade and Industry Minister Takeo Hiranuma was quoted by a ministry official as saying in Shanghai.
The minister was attending an Asia Pacific Economic Cooperation (APEC) forum's trade ministerial conference there.
Kuwaiti Oil Minister Adel al-Subaih said a new drilling contract for AOC would give it operational rights, but not rights of possession in extracting oil from Kuwaiti fields, Kyodo News reported Wednesday.
The government of Saudi Arabia and Kuwait Petroleum each have a 10.9 percent stake in AOC, while the main Japanese shareholders include Tokyo Electric Power Co., Kansai Electric Power Co. and Nippon Life Insurance, and Nippon Steel Corp.
Kuwait warned Japan in March it would be "difficult" to renew a contract with AOC for drilling rights in an offshore neutral zone shared with Saudi Arabia due to expire in January 2003
Japan lost its concession in the Saudi sector of the zone in February 2000, after Tokyo refused to fund a two-billion-dollar railway as demanded by Riyadh in return for renewing the 40-year-old concession.
Output from the oilfields in the neutral zone is 300,000 barrels per day. Saudi Arabia and Kuwait each receive 11 percent of the revenues and until it lost the concession, AOC formerly took the rest, giving Japan about five percent of its crude oil imports.
As Kuwait revised its constitution in order not to give foreign firms oil-exploitation rights, the Japanese government had believed it would be difficult to obtain them, according to Kyodo.
But AOC expressed its hope of retaining the rights.
"Regardless of what the new contract will be, the company will take part in negotiations, aiming to retain the contents of the current contract on operations, profits and crude oil handling," AOC said in a statement.
Japan depends on imports for its crude oil needs and nearly 90 percent of the supplies come from the Middle East, with the United Arab Emirates as its top provider.
Last November, Tokyo clinched exclusive negotiating rights to develop one of the Middle East's biggest oil fields in Iran.
Japanese oil firms won the right to hold talks with the National Iranian Oil Company to develop part of the Azadegan oil field in southwest Iran, which is said to have reserves of more than 26 billion barrels. — (AFP)
© Agence France Presse
© 2001 Mena Report (www.menareport.com)