Financial Times: Japan accuses China in oilfield dispute: “Chinese oil producers CNOOC and Sinopec claim to own Tianwaitian jointly, with the former especially active in exploring the area. The two companies signed an agreement with Shell and Unocal in 2003 to invest in the East China fields together, but the western groups pulled out in 2004, citing failure to agree on the development plan.”: Tuesday 20 Sept 2005
By David Pilling in Tokyo and Enid Tsui in Hong Kong
Published: September 20 2005
Japan on Tuesday accused China of beginning to produce oil or gas from a field in disputed waters in the East China Sea, saying it was weighing up what counter-measures to take.
Shoichi Nakagawa, the trade minister who has turned Chinese gas production into a territorial issue, said on Tuesday that a flare had been spotted at a drilling facility in waters close to the median line between both countries.
Japan says the median line marks the sea boundary between Asia's two most powerful economies and that, by drilling so close to it, China risks extracting hydrocarbons from shared deposits. Beijing, citing its shallow continental shelf, says its exclusive economic zone (EEZ) stretches further out than the median line.
The dispute has come to the fore as China's increasing need for energy has led it to look more intensively for oil and gas deposits. Japan says that it has repeatedly asked China to put the dispute to international arbitration, but says Beijing has refused.
Tokyo is confident that international arbitration would rule in its favour, since recent decisions have tended to side with the median-line interpretation over that of the continental shelf.
Mr Nakagawa said the flare was a tell-tale sign that China had started production of either oil or natural gas in the Tianwaitian field, within a few kilometres of the median line.
“The Japanese government is discussing how to act,” he added. “If China continues to fail to respond [to our protests], we will have to consider counter-measures.”
Chinese oil producers CNOOC and Sinopec claim to own Tianwaitian jointly, with the former especially active in exploring the area.
The two companies signed an agreement with Shell and Unocal in 2003 to invest in the East China fields together, but the western groups pulled out in 2004, citing failure to agree on the development plan.
According to CNOOC's estimates, Tianwaitian has 100,000 barrels of oil reserves and 31.1bn cu ft of gas. Neighbouring Chunxiao, with 3.8m barrels of oil and 166.9bn cu ft of gas, is also operated by CNOOC. It is expected to begin pumping gas to China's prosperous greater Shanghai area as early as next month.
Qin Guan, China's Foreign Ministry spokesman, said in Beijing on Tuesday that China's exploration was “being conducted in uncontested waters”.
“We hope that the issue between China and Japan in the East China Sea can be handled by dialogue and negotiation,” he added.
No conclusive technical data exist for the Tianwaitian field, but Tokyo suspects that it may also stretch across the median line.
“Even though we have not confirmed that the underground structure of the field extends into waters claimed by Japan, Tokyo sees the resource development as a problem,” Mr Nakagawa said.
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