Japan,Iraq Sign Communique On Oil Infrastructure Upgrade
TOKYO -(Dow Jones)- Japan and Iraq have signed a communique on oil infrastructure improvements, an official at Japan's Ministry of Economy, Trade, and Industry said Tuesday.
Japan's Economy, Trade and Industry Minister Akira Amari and Iraq's Oil Minister Hussain al-Shahristani signed the communique in Tokyo Tuesday.
The meeting of the two ministers was the first after a joint committee was set up by the two countries to boost bilateral cooperation in oil and natural gas late last year.
The communique reaffirms Japan's earlier agreement to help rebuild Iraq's war- damaged energy sector, and highlights specific areas of assistance that the industy needs to get back on its feet.
In the communique, both sides affirmed a need for greater oil and gas exploration in Iraq, as well as efforts to restore and expand Iraq's existing oil and gas facilities.
Japan will help Iraq upgrade a refinery in Basra and repair a key pipeline used to transport oil to tankers near the southern port city.
On Monday, Japan agreed to provide a Y2.079 billion loan to upgrade the Basra refinery, and a Y18.12 billion loan for the rehabilitation of a fertilizer plant. The repayment period is 40 years and the loans carry an annual interest rate of 0.75%.
Other details of the loans are still being negotiated, a METI official said.
Financing the restoration of the pipeline may also involve a loan, as part of the $3.5 billion loan package that Japan agreed on giving to Iraq in 2003. The possible pipeline financing is still being discussed.
Combined with four other projects that have already been decided, about 25%- 30% of the $3.5 billion in loans that Japan decided to give Iraq in 2003 have been allocated to actual projects, according to METI.
Japan and Iraq also agreed to hold energy talks at least once a year.
Al-Shahristani also met with Foreign Minister Taro Aso Monday, and is scheduled to meet with more officials Tuesday. The Iraqi minister, who was recently in Australia, will travel to China later this week.