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Thursday, June 19, 2008

Japan, China strike deal on gas fields

Development to proceed despite East China Sea border dispute


By REIJI YOSHIDA and SHINICHI TERADA
Staff writers

Tokyo and Beijing announced Wednesday they have agreed on a plan to jointly develop gas fields in the East China Sea, shelving a thorny dispute that has plagued relations for four years.

Map of East China oil fields
KYODO GRAPHIC

The project covers gas fields located near the Japan-drawn median line demarcating the exclusive economic zone border between the countries. Beijing has claimed, however, that its EEZ runs to the edge of the continental shelf near Okinawa and would include Taiwan and the Japan-controlled Senkaku islets.

With the deal, the two countries have effectively shelved their dispute over the EEZ border concerning gas field development, while still technically maintaining their own claims over that border.

The accord concerns the Shirakaba field (known as Chunxiao in Chinese), and a larger unnamed area south of the Asunaro field, which lies north-northeast of Shirakaba.

Japanese companies — either private or government-backed corporations — will invest in Chinese petroleum firms at the Shirakaba field.

The two countries will conduct surveys to drill the sea bottom for oil or gas in the large unnamed area, which covers 2,700 sq. km and straddles the median line.

"The agreement is a favorable example showing that the two countries can solve any difficulty through dialogue," Foreign Minister Masahiko Komura told reporters at a joint news conference with trade minister Akira Amari in Tokyo. "It is a significant result of strategic and reciprocal relationships, and we welcome the move between the two countries."

Amari added that the deal helps Japan secure energy resources.

When asked about the EEZ border, Komura said, "Japan and China have different stances and negotiations will be extremely long (before a conclusion is reached)."

The Shirakaba area is north of the border claimed by China.

Tokyo has called for joint development of Shirakaba, arguing that underground resources on the Japanese side could be tapped by China if it alone is allowed to exploit the gas field from its side of the median line.

China's development of the Shirakaba field is the furthest along and a flash point of the Japan-China EEZ dispute.

China is developing two more areas just inside its side of the line — called Kusunoki and Kashiwa by Japan — that were excluded from the latest development agreement.

The new deal is based on a rough consensus reached by Chinese President Hu Jintao and Prime Minister Yasuo Fukuda during Hu's visit to Tokyo in May. The two leaders announced then that they were near to clinching a deal, but said details still needed to be hammered out.

China also apparently needed time to forge a domestic consensus over the issue, Foreign Ministry officials have said.

Beijing has also proposed cooperating on gas field development near the disputed Senkaku isles, which are claimed by China, Taiwan and Japan and located farther south of the line. But this proposal has been rejected by Tokyo, according to Foreign Ministry officials.

Disputes over EEZ boundaries in the East China Sea are a constant source of friction between Japan and China that have fanned nationalist sentiment on both sides.

At the news conference, Amari said Wednesday's agreement was "politically more meaningful" for Japan in terms of energy security.

For Chinese and Japanese diplomats, however, one lingering concern is how the Chinese public will react to the apparent concessions made by their government.

Senior Foreign Ministry officials said the Chinese side is apparently worried about how China's various interest groups will react if the government is perceived as having conceded too much to Japan on the EEZ issue.

Jiang Yu, spokesman for the Chinese Foreign Ministry, reportedly said Tuesday in Beijing that the Shirakaba gas field is under China's control and that the agreement expected to be announced Wednesday will not change its position on EEZs in the East China Sea.

To carry out the pact, Japan and China need to conclude a treaty covering the details. Komura said he hopes the treaty can be wrapped up soon but didn't give a timetable.



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