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Japan to Give Teikoku Oil E. China Sea Drilling Rights This Week

Posted on: Wednesday, 13 July 2005, 12:01 CDT

Jul. 13--TOKYO -- The Japanese government is set to grant Teikoku Oil Co. concessions later this week to conduct experimental drilling in the East China Sea, a senior official at the Ministry of Economy, Trade and Industry said Wednesday.

Economy, Trade and Industry Minister Shoichi Nakagawa suggested last Friday that the central government will give such rights to the oil developer in about a week as it received approval from the governors of both Kagoshima and Okinawa prefectures, which have state-designated jurisdiction over the area.

The move is expected to draw fire from China, which is in dispute with Japan over the sea area due to unsettled demarcation.

A Chinese consortium has been actively conducting natural gas projects in an area close to the sites where Teikoku Oil applied for test drilling. It is scheduled to begin full production at Chunxiao, one of the gas fields, later this year.

On April 28, Teikoku Oil submitted applications to the central government for the test-drilling rights at three sites covering a combined 400 square kilometers in the East China Sea, following the ministry's decision earlier that month to unfreeze the concession-granting procedures.

The sites are located just east of what Japan claims is the median line separating the 200-nautical mile exclusive economic zones of Japan and China. China does not recognize the median line.

The oil company originally applied for exploration rights in the East China Sea in 1969 and 1970 but the government shelved the applications due to the unsettled demarcation in the sea, where the two countries' exclusive economic zones overlap.

China says its economic waters stretch to the end of the continental shelf. It has held talks with Japan to settle the dispute over demarcation, but the two countries have yet to reach a breakthrough.

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Source: Kyodo News International, Tokyo

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