Japan agreed on Tuesday to step up support for Iraq's troubled oil industry as part of Tokyo's quest for more diverse energy supplies. Visiting Iraqi Oil Minister Hussain al-Shahristani and Japanese Minister of Economy, Trade and Industry Akira Amari issued a joint statement confirming loans to back sizeable energy projects in the war-torn nation.
As a first step, Japan will provide 2.08 billion yen (17 million dollars) in low-interest loans to help upgrade a refinery in the southern city of Basra, part of 3.5 billion dollars pledged at a donor conference in Madrid in 2003.
The two countries also agreed to make "more efforts" to back other projects such as construction of pipelines and liquefied petroleum gas-related facilities in southern Iraq. "Iraq is an irreplaceable partner for Japan in terms of stable energy supply. In this sense, the two countries' relations are reciprocal," the joint statement said.
Japan, the world's second largest economy, is almost entirely dependent on the Middle East for its energy needs. The Iraqi oil minister, who is in Japan on a three-day visit that began Sunday, told a news conference that Japan was a "strategic partner" for Iraq. He said Iraq was committed to being a long-term supplier of energy for Japan.
The energy-hungry nation imports about 15 percent of its total oil consumption from Iran and in 2004 defied the United States by signing a two billion-dollar deal to develop Iran's largest onshore oil field.