Japan And China Jostle For Local Energy Reserves

Last year, Tokyo protested to Beijing about the China National Offshore Oil Corporation’s Chunxiao gas field development in the East China Sea, part of the $2 billion Xihu Trough project, which it believes might extend into Japanese territorial waters.

CNOOC, which leads in the development of Xihu Trough’s gas reserves, will begin delivering from the field to eastern China’s Zhejiang province in mid-2005. The area is very close to the maritime Exclusive Economic Zone claimed by Japan, which runs in a line from the south-western part of Japan to the northern tip of Taiwan.

The area is contested because Japan measures its claim from a median line in the sea, which China does not recognise, while China measures its claim with reference to the continental shelf, which extends its reach well to the east of the Japanese line. While the Chinese test wells are not inside the EEZ, Japan fears that they may encroach upon Japanese undersea reserves. The two sides also dispute ownership of the Diaoyutai (Senkaku in Japanese) Islands.

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