Identifier
Created
Classification
Origin
08TOKYO586
2008-03-05 09:22:00
CONFIDENTIAL
Embassy Tokyo
Cable title:
INPEX OFFICIAL DISCUSSES AZADEGAN, CHINA SOVEREIGN
how-toVZCZCXRO5646 PP RUEHFK RUEHKSO RUEHNH RUEHRN DE RUEHKO #0586 0650922 ZNY CCCCC ZZH P 050922Z MAR 08 FM AMEMBASSY TOKYO TO RUEHC/SECSTATE WASHDC PRIORITY 2266 INFO RUEHBJ/AMEMBASSY BEIJING PRIORITY 2048 RUEHBY/AMEMBASSY CANBERRA PRIORITY 2543 RUEHMO/AMEMBASSY MOSCOW PRIORITY 2155 RUEHFR/AMEMBASSY PARIS PRIORITY 6003 RUEHUL/AMEMBASSY SEOUL PRIORITY 8106 RUEHFK/AMCONSUL FUKUOKA PRIORITY 6486 RUEHNH/AMCONSUL NAHA PRIORITY 8880 RUEHOK/AMCONSUL OSAKA KOBE PRIORITY 0154 RUEHKSO/AMCONSUL SAPPORO PRIORITY 7090 RUEHIN/AIT TAIPEI PRIORITY 6923 RHMCSUU/DEPT OF ENERGY WASHINGTON DC PRIORITY RUEHBS/USEU BRUSSELS PRIORITY RUCNDT/USMISSION USUN NEW YORK PRIORITY 8690 RUEHRN/USMISSION UN ROME PRIORITY
C O N F I D E N T I A L TOKYO 000586
SIPDIS
SIPDIS
STATE FOR EB/ESC/IEC/ENR HAYMOND
STATE PASS DOE FOR BISCONTI
PARIS FOR USOECD
E.O. 12958: DECL: 03/04/2018
TAGS: ENRG JA PREL RU
SUBJECT: INPEX OFFICIAL DISCUSSES AZADEGAN, CHINA SOVEREIGN
WEALTH FUND INVESTMENT
Classified By: Ambassador J. Thomas Schieffer. Reasons 1.4 (b/d)
C O N F I D E N T I A L TOKYO 000586
SIPDIS
SIPDIS
STATE FOR EB/ESC/IEC/ENR HAYMOND
STATE PASS DOE FOR BISCONTI
PARIS FOR USOECD
E.O. 12958: DECL: 03/04/2018
TAGS: ENRG JA PREL RU
SUBJECT: INPEX OFFICIAL DISCUSSES AZADEGAN, CHINA SOVEREIGN
WEALTH FUND INVESTMENT
Classified By: Ambassador J. Thomas Schieffer. Reasons 1.4 (b/d)
1. (C) Press reports regarding Iran's pumping 20,000 barrels
per day from the Japanese-invested Azadegan oil fields are
misleading, Inpex Investor Relations Group Manager Hiroshi
Ikeda told Econoff February 28. Iran is using seven very old
wells that have not been well maintained, Ikeda said, and
this production is "not permanent." In addition, Iran does
not have the infrastructure or the vehicles to transport the
oil over 100 kilometers to the nearest pipeline. Ikeda
believes the operation is not economically viable and the
Government of Iran is pumping the oil to "save face" after
the withdrawal or reduction of non-Iranian firms' share of
Azadegan. Inpex, which now holds only a 10% stake in the
Azadegan fields, has received no revenue and very little
information about the distribution of the 20,000 barrels
beyond what has been reported in the press, Ikeda said.
2. (SBU) Ikeda shrugged off questions concerning news reports
that China's sovereign wealth fund, the China Investment
Corporation (CIC),may take a "sizable stake" in Inpex.
Upcoming projects will be funded with discounted loans from
the Japan Bank for International Cooperation (JBIC),so the
company has no need for a "strategic financier," he said.
(Note: Ministry of Economy, Trade and Investment (METI) Vice
Minister Takao Kitabata on February 25 said METI would keep a
close eye on any such investments given Inpex's strategic
importance to Japan's oil and gas industry. METI holds a 29%
share in the company and has one Special Class share - a
so-called "golden share" - which effectively gives the
ministry complete veto rights over any management decisions.
End Note.)
3. (U) Ikeda stated the JBIC loans and the funds freed by the
reduction of its share in Azadegan from 75% to 10% are now
being invested in Australia's WA-285-P (Ichthys) fields
discovered in 2000. Inpex has a 76% stake in the fields
which are projected to yield 7.6 million tons of liquid
natural gas (LNG) per year beginning in 2012. The company
will invest over USD $10 billion in the project, according to
Ikeda.
4. (C) Comment. Ikeda clearly felt no need to defend Inpex's
investment in Azedegan as he believes the project is dead
with no hope for revival in the foreseeable future. He was
also nonchalant about the possibility of CIC acquiring a
stake in the company given the ready availability of JBIC
loans and the confidence METI will use its "golden share" to
block any takeover attempts. End Comment.
SCHIEFFER
SIPDIS
SIPDIS
STATE FOR EB/ESC/IEC/ENR HAYMOND
STATE PASS DOE FOR BISCONTI
PARIS FOR USOECD
E.O. 12958: DECL: 03/04/2018
TAGS: ENRG JA PREL RU
SUBJECT: INPEX OFFICIAL DISCUSSES AZADEGAN, CHINA SOVEREIGN
WEALTH FUND INVESTMENT
Classified By: Ambassador J. Thomas Schieffer. Reasons 1.4 (b/d)
1. (C) Press reports regarding Iran's pumping 20,000 barrels
per day from the Japanese-invested Azadegan oil fields are
misleading, Inpex Investor Relations Group Manager Hiroshi
Ikeda told Econoff February 28. Iran is using seven very old
wells that have not been well maintained, Ikeda said, and
this production is "not permanent." In addition, Iran does
not have the infrastructure or the vehicles to transport the
oil over 100 kilometers to the nearest pipeline. Ikeda
believes the operation is not economically viable and the
Government of Iran is pumping the oil to "save face" after
the withdrawal or reduction of non-Iranian firms' share of
Azadegan. Inpex, which now holds only a 10% stake in the
Azadegan fields, has received no revenue and very little
information about the distribution of the 20,000 barrels
beyond what has been reported in the press, Ikeda said.
2. (SBU) Ikeda shrugged off questions concerning news reports
that China's sovereign wealth fund, the China Investment
Corporation (CIC),may take a "sizable stake" in Inpex.
Upcoming projects will be funded with discounted loans from
the Japan Bank for International Cooperation (JBIC),so the
company has no need for a "strategic financier," he said.
(Note: Ministry of Economy, Trade and Investment (METI) Vice
Minister Takao Kitabata on February 25 said METI would keep a
close eye on any such investments given Inpex's strategic
importance to Japan's oil and gas industry. METI holds a 29%
share in the company and has one Special Class share - a
so-called "golden share" - which effectively gives the
ministry complete veto rights over any management decisions.
End Note.)
3. (U) Ikeda stated the JBIC loans and the funds freed by the
reduction of its share in Azadegan from 75% to 10% are now
being invested in Australia's WA-285-P (Ichthys) fields
discovered in 2000. Inpex has a 76% stake in the fields
which are projected to yield 7.6 million tons of liquid
natural gas (LNG) per year beginning in 2012. The company
will invest over USD $10 billion in the project, according to
Ikeda.
4. (C) Comment. Ikeda clearly felt no need to defend Inpex's
investment in Azedegan as he believes the project is dead
with no hope for revival in the foreseeable future. He was
also nonchalant about the possibility of CIC acquiring a
stake in the company given the ready availability of JBIC
loans and the confidence METI will use its "golden share" to
block any takeover attempts. End Comment.
SCHIEFFER