TOKYO Japan, which imports 99 percent of its oil, said Monday that it would lend $3.5 billion to Baghdad to finance three projects in southern Iraq aimed at helping the country bolster exports.
The loan will finance the redevelopment and upgrade of a refinery in Basra, improvements to oil-export infrastructure and a project to produce liquefied petroleum gas, said Shin Hosaka, director of the oil and natural gas division at the Japanese Trade Ministry.
Japan and Iraq, which holds the world's third-largest oil reserves, are to sign an agreement Tuesday that included the financing deal, Hosaka said.
Iraq is under pressure to reconstruct its war-torn oil facilities and bolster exports. It is the only country among the 11 members of the Organization of Petroleum Exporting Countries that does not have a production target. Attacks on oil installations and the difficulty of guaranteeing security to workers have hampered Iraq's attempts to increase output.
Iraq is seeking to increase crude oil production to almost 3 million barrels a day by the end of this year from the current level of 2.4 million barrels, Oil Minister Hussain al-Shahristani, said Monday.
The current output is 100,000 barrels a day higher than production in mid- September. Output in Iraq peaked in December 1979 at 3.7 million barrels a day, according to the Energy Information Administration. Iraq was pumping about 2.5 million barrels a day before the United States and allies invaded in March 2003.
Iraq expects to enact a law this year outlining foreign participation in energy ventures, Shahristani said Sept. 11. Major oil companies are not deterred by security concerns in Iraq and are waiting for the law to be enacted, the minister said.
Tokyo plans to raise to 40 percent the share of oil imports it gets from assets it controls, from the current level of 15 percent, according to the medium-term energy plan issued in May by the Trade Ministry.
Shahristani held talks on Monday with Trade Minister Akira Amari.
