Teikoku Oil Co. submitted an application to the Ministry of Economy, Trade and Industry to drill for oil and natural gas in three areas, totaling 400 sq. km.

Two of the areas lie flush against the Chun Xiao and Duan Qiao gas fields, where drilling rigs are set up along the limit of the exclusive economic zone claimed by Japan.

"We do not have concrete plans to drill at the moment," said Teikoku Oil President Masatoshi Sugioka in a statement. "Drilling in the waters in question would raise safety issues, and any decision will be based on discussions with government officials."

If the application is approved and the firm starts drilling before the two sides have reached an agreement to share undersea resources, the scene could be set for more flare-ups between the two regional powers.

On April 13, the Japanese government announced it had reopened procedures to accept test-drilling applications amid strained diplomatic relations with China.

The Japan Times Weekly: May 7, 2005
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