Xinhua- Iran and Japan are in talks to sign a deal worth 2.13 billion U.S. dollars to renew Iran's Abadan oil refinery, the refinery company said Saturday, according to semi-official Fars news agency.

Japan's JGC Corporation Engineering Company will develop the refinery, said Esfandiar Daemolzekr, managing director of Abadan Oil Refinery Company, adding that the project will reduce fuel oil output to less than 10 percent.

The Abadan refinery, built in 1912, is located in Abadan city near the coast of the Persian Gulf and was one of world's largest oil refineries. It was largely destroyed in 1980s during the Iraq-Iran war.

Japan's Inpex Company is also in talks with Iran to sign a deal for the development of Iranian Azadegan oilfield with an in-place reservoir of 42 billion barrels, said Noureddin Shahnazizadeh, managing director of Iran's Petroleum Engineering and Development Company.