Iran MP says Japan oil deal 'to be cancelled'.

(From AFX Europe (Focus))

TEHRAN (AFX) - The head of the Iranian parliament's energy commission said Saturday Tehran would cancel a 2 bln usd contract signed with Japan's Inpex to develop its largest onshore oil field after a string of delays.

"The contract with Japan to develop the Azadegan oil field will soon be cancelled," Kamal Daneshyar was quoted as saying by the official news agency IRNA.

"Japan must pay the penalty for five years of delay" in launching operations, he said, adding that the project would be handed to the National Iranian South Oil Company.

"Iranian experts are able to carry out the project with one third of the Japanese contract's value and in a much shorter period," Daneshyar said.

There was no official confirmation of his comments from the oil ministry which, if confirmed, would mark the end of a long-running saga of missed deadlines and mutual recriminations.

"Japan has had delays in the project. Iran will announce its decision in the next days," Oil Minister Kazem Vaziri Hamaneh told the Sarmayeh newspaper Saturday.