Japan and China have emerged with widely differing views of the results of talks held Oct. 25 that aimed at resolving a maritime boundary dispute affecting potential natural gas rights in the East China Sea.
"I don't know why these discussions were even held," said Japanese Trade and Industry Minister Shoichi Nakagawa. "I don't plan to get involved in further talks that end without resolution," he told reporters Oct. 26 in Tokyo.
But Chinese officials, dismissing Nakagawa's criticisms, were more favorable in their descriptions of the 9-hr bilateral discussions, held at Beijing's request.
"We believe this consultation is positive, and both sides have demonstrated sincerity and constructive attitudes," said Zhang Qiyue, a spokeswoman for the Chinese Ministry of Foreign Affairs. Zhang said consultations are the only way to resolve the dispute between the two countries, adding that both sides will have further talks.
Dispute details
The dispute erupted in August when Chinese media reported that China had begun a 470-km subsea pipeline to the 22,000 sq km Chunxiao natural gas field, located in the Xihu Trough.
The trough, 400 km east of Shanghai, contains the largest gas deposit yet discovered in the East China Sea, with reserves estimated at 1.6 tcf.
The Cunxiao gas field lies just west of a line Japan claims as the boundary of its exclusive economic zone. Japan has repeatedly complained that the pipeline, which is due for completion by May 2005, could breach its ocean economic zone. Japan also argues it has a right to claim its share if any resources are found in the Chinese zone along the median line.
But China does not recognize Japan's so-called "median line" as the demarcation, saying the border is where its continental shelf ends. That would give China a far larger zone.
In August, a Chinese official rejected Japan's claim to a median line between Chinese and Japanese exploration areas in the East China Sea and defended his country's recent moves in the area.
Chinese Foreign Ministry spokesman Kong Quan told reporters that Japan's claim was invalid because Tokyo had unilaterally established the median line without consulting China. Kong said China was exploring "only in its own areas" of the East China Sea and that Japan had "no right" to request information about it.
China repeated that view Oct. 26 when Ministry of Foreign Affairs spokeswoman Zhang Qiyue maintained that China's activities within the disputed waters were within the country's territorial boundary.
"We understand this issue is quite complicated," she told a regular news briefing. But she insisted that China is simply exercising sovereignty over its coastal area. "During the consultation China made clear its position and made necessary explanations of these activities to the Japanese side," Zhang told reporters.
Background
The original foreign partners in the Xihu Trough project, including Unocal Corp. and Royal Dutch/Shell Group, quit in September after a detailed resource assessment and study of development options (OGJ Online, Sept. 29, 2004).
At the time, Shell's spokesman in Beijing said the decision had nothing to do with the spat between Japan and China. "We made a decision based on our commercial criteria, which involve a combination of factors, including reserves, development costs, basin potential, and gas marketing," said Shell spokesman Nick Wood.
"The project does not meet our commercial threshold based on our portfolio and strategy," Wood said.
That decision did not faze Japanese or Chinese officials.
"Japan has remained unaffected by it," Nakagawa told reporters in reference to the announcement by the Shell and Unocal.
"We will keep on implementing it," Nakagawa said of the natural gas exploration activities Japan has conducted near the disputed median line. "I have heard that they (the oil majors) have judged that the project would not be commercially profitable."
While acknowledging that the Western companies' judgments are based on "economic considerations," Nakagawa said, "Japan's natural resources exploration is different from theirs."
The Chinese apparently agree. Despite the departure of the two majors, China National Offshore Oil Corp. (CNOOC) and China Petroleum Corp. remained as backers of the project.
CNOOC recently announced that exploration in the Xihu Trough project would proceed on schedule and that gas deliveries from Chunxiao field to eastern China would begin in mid-2005.