BAGHDAD: Iraq plans to open the Nasiriyah oil field in southern Iraq to international bidding by the end of this year and expects Japanese companies to actively participate in the oil field development, Japanese government officials said Monday. The view was expressed as Japanese trade minister Akihiro Ohata, during his trip to the Middle East, made an unannounced visit to Baghdad Monday and called on Iraq to resume negotiations with a group of Japanese firms over the Nasiriyah oil field, they said. A joint statement was issued after Ohata held talks with Deputy Prime Minister Hussain Al-Shahristani and Oil Minister Abdul Kareem Luaibi in which the two countries agreed to reinforce cooperation especially in the energy sector, such as oil development. It is the first visit to Iraq by a Japanese Cabinet minister since the Democratic Party of Japan took power in September 2009. The visit, which reflects Japan's eagerness to seek stable oil supplies, also comes after the new Iraqi government was established in late December. According to the joint statement, the Iraqi government expressed its expectation that Japanese companies will participate further in the oil sector and both sides confirmed that they will continue to develop a close cooperative relationship. Iraq is known as the world's major holder of proven oil reserves, but years of war have hampered the development of its oil fields and oil production. As for the Nasiriyah oil field, a Japanese consortium, including Nippon Oil Corp., now JX Nippon Oil & Energy Corp., reached an accord in principle with the Iraqi government in August 2009 for oil development rights. But negotiations have effectively been suspended in January 2010, prior to the Iraqi national parliamentary election in March the same year. Meanwhile, another consortium formed by Japan Petroleum Exploration Co., known as JAPEX, and Malaysia's state-run Petronas Carigali has won a contract to develop the Gharaf oil field, also in southern Iraq. While Iraq has been open to foreign investment in oil field development and other projects to rebuild the country, Japanese companies appear to be cautious about participating in reconstruction activities due to security and other concerns. Ohata's visit is apparently aimed at encouraging Japanese companies to actively engage in business in Iraq. To promote the reconstruction of Iraq, the joint statement also said that the two countries agreed on the need for cooperation to improve infrastructure, and decided to start preparations for a feasibility study on the construction of a large-scale power station in the south for stable supply of electricity in Iraq. Given Iraq's request for additional yen loan assistance, the two countries will hold further discussions to look for appropriate projects, the statement said. While the Japanese Economy, Trade and Industry Ministry had said Ohata would make a six-day trip to Saudi Arabia and the United Arab Emirates, the initially announced itinerary did not include a visit to Iraq. Ohata left Japan on Friday. The trip to the Middle East is aimed at promoting Japan's infrastructure technology, such as that related to nuclear power plants, and seeking stable oil supplies. Japan relied on the Middle East for around 90 percent of its crude oil imports in fiscal 2008, with Saudi Arabia the biggest supplier followed by the United Arab Emirates, according to the government's fiscal 2009 annual energy report.
