Japan, China look at splitting gas profits
Feb 4, 2008 7:55 PM
Japan and China are considering splitting profits from gas fields in disputed waters in the East China Sea, a Japanese daily reported, as the two sides race to resolve a row over resources ahead of a visit by Chinese President Hu Jintao in the spring.
The Nikkei business daily said the two countries were negotiating a compromise to set aside their long-running dispute over sovereignty in the area and move ahead with joint development, although Japan's top government spokesman disputed the report.
"I believe the article is inaccurate to a considerable extent," Chief Cabinet Secretary Nobutaka Machimura told reporters. He did not elaborate.
Under the proposal, Japan would put up more than half the cost of developing gas fields closer to itself, while China would do the same for the gas fields closer to itself, the Nikkei said.
The profit that each country would receive from each gas field would be determined by its portion of the investment, the paper said, adding that Japan and China hope to eventually work out a plan by which overall profits are split evenly. A Japanese government source said Tokyo has proposed jointly developing fields that straddle what Japan says is the line that separates the two countries' exclusive economic zones.
"China is quite positive about the idea of jointly developing gas fields to the east of the median line (closer to Japan), but not those to the west of the line," the source said.
Tokyo and Beijing disagree over the boundary between their exclusive economic zones in the sea between them. Japan says the median line between the two countries' coasts is the boundary. China says the boundary is defined by its continental shelf, extending its claimed zone beyond the median line.
"The two sides are moving in the right direction, but there are a lot of question marks on whether a compromise will be reached before President Hu Jintao's visit to Japan," the Japanese government source said.
The dates of Hu's visit, the first by a Chinese head of state to Japan in 10 years, have not been announced, but officials say it is likely to take place when the cherry trees are in bloom, which is usually early April in Tokyo. Japanese Prime Minister Yasuo Fukuda and Chinese Premier Wen Jiabao said in December they had made progress in resolving the dispute in talks that month in Beijing.
Japan fears that Chinese operations could siphon off gas from fields that extend into what it sees as its own waters.
China's state-controlled CNOOC Ltd has said it is ready to begin production from the Chunxiao gas field in the East China Sea, and Japan fears China operations could siphon off gas from fields that extend into what it sees as its own economic waters.
Estimated net known reserves in the East China Sea, where the disputed fields lie, total a relatively modest 180 million barrels of oil equivalent, Japan says.
Both sides are devoting considerable diplomatic energy to the dispute because of expectations that a lot more oil or gas may be found in the area.
Feb 4, 2008 7:55 PM
Japan and China are considering splitting profits from gas fields in disputed waters in the East China Sea, a Japanese daily reported, as the two sides race to resolve a row over resources ahead of a visit by Chinese President Hu Jintao in the spring.
The Nikkei business daily said the two countries were negotiating a compromise to set aside their long-running dispute over sovereignty in the area and move ahead with joint development, although Japan's top government spokesman disputed the report.
"I believe the article is inaccurate to a considerable extent," Chief Cabinet Secretary Nobutaka Machimura told reporters. He did not elaborate.
Under the proposal, Japan would put up more than half the cost of developing gas fields closer to itself, while China would do the same for the gas fields closer to itself, the Nikkei said.
The profit that each country would receive from each gas field would be determined by its portion of the investment, the paper said, adding that Japan and China hope to eventually work out a plan by which overall profits are split evenly. A Japanese government source said Tokyo has proposed jointly developing fields that straddle what Japan says is the line that separates the two countries' exclusive economic zones.
"China is quite positive about the idea of jointly developing gas fields to the east of the median line (closer to Japan), but not those to the west of the line," the source said.
Tokyo and Beijing disagree over the boundary between their exclusive economic zones in the sea between them. Japan says the median line between the two countries' coasts is the boundary. China says the boundary is defined by its continental shelf, extending its claimed zone beyond the median line.
"The two sides are moving in the right direction, but there are a lot of question marks on whether a compromise will be reached before President Hu Jintao's visit to Japan," the Japanese government source said.
The dates of Hu's visit, the first by a Chinese head of state to Japan in 10 years, have not been announced, but officials say it is likely to take place when the cherry trees are in bloom, which is usually early April in Tokyo. Japanese Prime Minister Yasuo Fukuda and Chinese Premier Wen Jiabao said in December they had made progress in resolving the dispute in talks that month in Beijing.
Japan fears that Chinese operations could siphon off gas from fields that extend into what it sees as its own waters.
China's state-controlled CNOOC Ltd has said it is ready to begin production from the Chunxiao gas field in the East China Sea, and Japan fears China operations could siphon off gas from fields that extend into what it sees as its own economic waters.
Estimated net known reserves in the East China Sea, where the disputed fields lie, total a relatively modest 180 million barrels of oil equivalent, Japan says.
Both sides are devoting considerable diplomatic energy to the dispute because of expectations that a lot more oil or gas may be found in the area.
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