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Oil and Power: The Rise and Fall of the Japan-Iran Partnership in Azadegan

Published online by Cambridge University Press:  07 May 2025

Michael Penn
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The story of how Japan gained, and then lost, the development rights to one of the richest oil fields in the world has been treated rather casually in the international media despite the fact that it will strongly affect Japan's relations with Iran and other countries for many years to come. The issue of the Japanese involvement in the Azadegan oil field was divisive from the start, but became more and more so as the political situation in the Persian Gulf deteriorated after September 11 and the U.S. invasion of Iraq. This essay traces the development of the Japan-Iran partnership in Azadegan from its inception in November 2000 to its effective dissolution in October 2006.

Type
Research Article
Information
Asia-Pacific Journal , Volume 4 , Issue 12 , December 2006 , e13
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Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
Copyright © The Authors 2006

References

Notes

[1] Nihon Keizai Shinbun, September 29, 1999.

[2] “Joint Press Statement by the Ministers for Foreign Affairs of Iran and Japan on the occasion of the official visit of Foreign Minister Kamal Kharrazi of the Islamic Republic of Iran to Japan,” December 24, 1998.

[3] Associated Foreign Press, August 10, 1999.

[4] Nihon Keizai Shinbun, March 5, 2000.

[5] “Statement by the Press Secretary / Director-General for Press and Public Relations, Ministry of Foreign Affairs, on the Parliamentary Elections in Iran,” February 22, 2000.

[6] For a solid, recent review of the collapse of the Khafji concession, see Ahmed Kandil, “The Political Economy of International Cooperation Between Japan and Saudi Arabia: The Arabian Oil Company as a Case Study,” Annals of the Japan Association for Middle East Studies, No. 22-1, August 2006, pp. 21-61.

[7] Nihon Keizai Shinbun, June 8, 2000.

[8] Nihon Keizai Shinbun, June 30, 2000.

[9] Nihon Keizai Shinbun, November 1, 2000.

[10] Nihon Keizai Shinbun, Evening Edition, November 2, 2000.

[11] Japan Times, November 2, 2000.

[12] Nihon Keizai Shinbun, November 2, 2000.

[13] Japan Times, December 29, 2000; Nihon Keizai Shinbun, July 4, 2001.

[14] Nihon Keizai Shinbun, July 9, 2001.

[15] Kyodo News, “Japan, Iran Agree to Work toward Contract Regarding Azadegan Oil Field,” Japan Times, July 10, 2001.

[16] Comment by the Press Secretary / Director-General for Press and Public Relations, Ministry of Foreign Affairs, on the Enactment of the Iran and Libya Sanctions Extension Act of 2001,“ August 8, 2001.

[17] Misaki Hisane, “Crucial Days of Negotiations Lie Ahead for ‘Oil Diplomacy’,” Japan Times, August 18, 2001.

[18] “Prime Minister Junichiro Koizumi Sends Letters to the Leaders of Egypt, Iran, Saudi Arabia, and Qatar,” September 20, 2001.

[19] “Dispatch of Prime Minister's Special Envoy Former Foreign Minister Masahiko Koumura to the Middle East,” September 28, 2001.

[20] Nihon Keizai Shinbun, September 26, 2001.

[21] Misaki Hisane, “No Hurry over Iran Oil Deal: Meeting Target Date Could Have Strained U.S. Relations,” Japan Times, February 22, 2002.

[22] Ibid.

[23] “Visit by Minister for Foreign Affairs Yoriko Kawaguchi to the Islamic Republic of Iran (Overview and Evaluation),” May 9, 2002.

[24] Nihon Keizai Shinbun, July 1, 2003.

[25] Statement by the Press Secretary / Director-General for Press and Public Relations, Ministry of Foreign Affairs, on the Chairwoman's Summing-Up Statement of the IAEA Board of Governors Meeting Concerning the Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran,“ June 19, 2003.

[26] Guy Dinmore, “US Presses Japan over Iran Oil Deal,” Financial Times, June 27, 2003; Kanako Takahara, “U.S. Pressure Places Iran-Japan Oil Deal in Doubt,” Japan Times, July 2, 2003; Hooman Peimani, “Americans Stymie Japan-Iran Oil Deal,” Asia Times Online, July 4, 2003.

[27] Hooman Peimani, “Americans Stymie Japan-Iran Oil Deal,” Asia Times Online, July 4, 2003.

[28] Kanako Takahara, “U.S. Pressure Places Iran-Japan Oil Deal in Doubt,” Japan Times, July 2, 2003.

[29] Nihon Keizai Shinbun, July 3, 2003.

[30] Nihon Keizai Shinbun, July 7, 2003.

[31] “Japan-Iran Disarmament and Non-Proliferation Consultations (Overview),” July 2003.

[32] Nihon Keizai Shinbun, August 2, 2003.

[33] “Visit to Japan by Seyyed Kamal Kharrazi, Minister of Foreign Affairs of the Islamic Republic of Iran (Overview and Evaluation),” September 2003.

[34] Tomoko Otake, “Cabinet Interview: Nakagawa's Farm Trade Background Brings Mixed Bag to METI Portfolio,” Japan Times, September 27, 2003.

[35] Nihon Keizai Shinbun, November 9, 2003.

[36] Sayuri Daimon, “Japan Should Not Just Be a Guest: Hashimoto Urges Koizumi to Diversify Diplomacy,” Japan Times, January 1, 2004.

[37] Nihon Keizai Shinbun, January 7, 2004.

[38] Raquel Shaoul, “An Evaluation of Japan's Current Energy Policy in the Context of the Azadegan Oil Field Agreement Signed in 2004,” Japanese Journal of Political Science, Vol. 6, No. 3, 2005.

[39] Ibid.

[40] Richard Boucher, Spokesman, Daily Press Briefing, State Department, February 18, 2004.

[41] Richard Hanson, “Japan, Iran Sign Major Oil Deal, US Dismayed,” Asia Times Online, February 20, 2004.

[42] Eric Watkins, “Japan Secures Financing to Develop Iran's Azadegan Oil Field,” Alexander's Gas and Oil Connections, Vol. 9, No. 8, April 22, 2004.

[43] Kyodo News, “U.S. Traded Iran Oil Deal for SDF in Iraq: Democrat,” Japan Times, April 1, 2004.

[44] Eric Watkins, “Japan Secures Financing to Develop Iran's Azadegan Oil Field,” Alexander's Gas and Oil Connections, Vol. 9, No. 8, April 22, 2004.

[45] Kyodo News, “Japan Nudged to Consider Libya Oil Deal: Senior U.S. Official Suggests Iran Development Plan Be Reconsidered,” Japan Times, August 6, 2004.

[46] For more on the eventual success of Japanese bids in Libya, see Michael Penn, “The Roots of the Japanese Oil Victory in Libya,” Japan Focus, No. 421, October 30, 2005.

[47] For a good analysis of this election, see Shintaro Yoshimura, “Regarding the Ninth Iranian Presidential Elections,” Shingetsu Newsletter No. 30, July 1, 2005.

[48] Mayumi Negishi, “China to Swoop on Iran Oil Field if Tokyo Pulls Support: Firms,” Japan Times, August 18, 2005.

[49] J. Sean Curtin, “Tehran's Diplomatic Purge Hits Europe and Japan,” Shingetsu Newsletter No. 186, February 7, 2006.

[50] Quoted in Michael Penn, “The Iran Nuclear Crisis – Japan As Mediator?,” Shingetsu Newsletter No. 161, January 15, 2006.

[51] Ibid.; Mindy L. Kotler, “Unrequited Responsibility: Japan and Iran,” Asia Policy Calendar, January 16, 2006.

[52] Michael Penn, “Foreign Minister Mottaki in Japan: The Balance Sheet,” Shingetsu Newsletter No. 207, March 6, 2006.

[53] Michael Penn, “Nippon Oil Cuts Back on Supplies from Iran,” Shingetsu Newsletter No. 216, March 17, 2006.

[54] Michael Penn, “Tokyo's Agony Over Iran,” Shingetsu Newsletter No. 244, April 21, 2006.

[55] See the discussion in Michael Penn, “Will Tehran Call Tokyo's Bluff?,” Shingetsu Newsletter No. 263, May 9, 2006.

[56] Michael Penn, “The Iranian Ambassador Talks Tough in Tokyo,” Shingetsu Newsletter No. 273, May 19, 2006.

[57] Michael Penn, “Bolton Pushes Back,” Shingetsu Newsletter No. 275, May 20, 2006.

[58] Michael Penn, “Inpex in Azadegan: Delay is Not an Option,” Shingetsu Newsletter No. 284, May 27, 2006.

[59] A full English translation of Michael Green's opinion article is available in “All Shook Up — Tokyo and Azadegan,” Shingetsu Newsletter No. 372, September 2, 2006.

[60] Michael Penn, “The Azadegan Saga — Daneshyar Talks Trash and Nikai Talks Business,” Shingetsu Newsletter No. 380, September 12, 2006.

[61] Michael Penn, “Tokyo Backing Out of the Azadegan Project,” Shingetsu Newsletter No. 395, September 30, 2006.

[62] For a more extended discussion, see Michael Penn, “Azadegan Autopsy, Part II – The North Korea Factor,” Shingetsu Newsletter No. 412, October 19, 2006.

[63] Michael Penn, “Azadegan Autopsy, Part I: METI versus MOFA,” Shingetsu Newsletter No. 405, October 14, 2006.