China Answers Japan Oil Rig Concern With Offer

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July 24, 2015

One of many photos released by Japan’s Foreign Ministry showing Chinese oil and gas structures in the East China Sea. Photo: Japan Foreign Ministry

By Bloomberg News

(Bloomberg) — China repeated a call Friday for talks with Japan over joint development of gas and oil resources in contested waters in the East China Sea.

The offer comes days after Japan disclosed a map and photographs of what it said were 16 Chinese marine platforms close to Japan’s side of a geographical median line that it contends should mark the border between their exclusive economic zones. Japan has yet to respond to China’s latest call.

[contextly_sidebar id=”0GAYjzDW1qP4KuRSoPX67M1YeSWhFamP”]China said it was justified to conduct oil and gas exploration in its exclusive economic zone, the Foreign Ministry said on its website, claiming it has been developing the same areas since the 1970s and Japan has only raised objections in recent years. Japan has long expressed concern that the rigs could siphon gas out of undersea structures that extend to its own side.

Relations between Asia’s two largest economies are thawing, even as they are locked in a dispute over ownership of a group of uninhabited islands. Japan’s lower house of parliament last week passed security bills to extend the role of Japan’s military to allow it to defend other countries — a move China said risked unsettling regional security.

The squabble over the images could be a setback for warming ties, said Da Zhigang, director of the Institute of Northeast Asian Studies at the Academy of Social Sciences in Heilongjiang province.

“Both sides need to give ground on this territorial issue,” Da said. “But apparently neither of the two governments wants to be seen conceding anything to their domestic supporters.”

Talks Collapse

The two countries should start joint development of resources with the precondition that activities won’t violate laws of the two countries, the foreign ministry said. While the two nations agreed in 2008 to jointly develop gas fields near the contested waters and held their first official talks in 2010, discussions soon broke down amid a dispute over the sovereignty of the East China Sea islands.

Japanese Chief Cabinet Secretary Yoshihide Suga told reporters in Tokyo on Wednesday that “it’s extremely regrettable that China should conduct unilateral development of resources.”

The East China Sea has about 200 million barrels of oil and as much as 2 trillion cubic feet of gas in proved and probable reserves, according to estimates on the U.S. Energy Information Administration website.

“The unresolved territorial and maritime claims and limited evidence of hydrocarbon reserves make it unlikely that the region will become a major new source of hydrocarbon production,” the EIA wrote in a statement last year.

–With assistance from Ben Sharples in Melbourne.

©2015 Bloomberg News

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