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China, Japan agree on East China Sea E&P projects

Eric Watkins
Senior Correspondent

LOS ANGELES, June 20 -- Japan and China say they have reached a political agreement on gas exploration projects in the East China Sea, with Japan to invest in a gas field already operated by China and the two nations to jointly explore an undeveloped area.

Under terms of the agreement, they will jointly explore a 2,700 sq km area south of Asunaro gas field, which China calls Longjing and which straddles what the Japanese claim is the median line between the two nations.

The two sides will then pick exact sites for joint development within the area, and they will work on concluding the necessary bilateral pact as soon as possible, according to Japanese officials.

In accordance with Chinese laws, Beijing welcomed investment by Japanese corporations in Chinese-operated Chunxiao gas field, which lies west of the median line and is known as Shirakaba in Japan.

Two Chinese companies—China National Offshore Oil Corp. and China Petroleum & Chemical Corp.—already are involved in oil exploration in Chunxiao field.

The Japanese corporations will be mainly from the private sector, although government-backed entities could also be involved, the officials said.

Details on the amount of investment and proportion of profits will be determined in future negotiations among the parties involved.

While both governments said the agreement is mutually beneficial, they still must work out details such as the ratio of investment and distribution of profits.

They also left unresolved the issue of demarcating the exact maritime boundary between them and what to do with other possible areas for joint development. They did not spell out a clear timeline.

The dispute erupted in August 2004 when Chinese media reported that China had begun a 470-km subsea pipeline to the 22,000 sq km Chunxiao natural gas field (OGJ Online, Nov. 5, 2004).

Much of the problem between the two countries stems from the fact that China does not recognize the Japanese-claimed median line and instead claims that its exclusive economic zone stretches further east to the edge of the continental shelf near Japan's Okinawa Prefecture.

Contact Eric Watkins at hippalus@yahoo.com.


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