Nothing has changed in oil row between Japan and China

Oct 22, 2004 02:00 AM

A TV news report in June about China's oil field development close to the Sino-Japanese demarcation line for their exclusive economic zones in the East China Sea prompted an adviser to Uruma Resources Development to recall a conversation he had with a bureaucrat decades ago.
According to the news report, the Japanese government has expressed displeasure with Beijing's East China Sea oil project and will carry out its own exploration, with trial drillings in sight.
"Nothing has changed," said Masao Araki, 81.

Araki said the bureaucrat from the then Ministry of International Trade and Industry told him at a Tokyo restaurant: "If you want to do trial drillings, go ahead. But even if the workers are attacked by a Chinese warship, neither the Self-Defence Forces nor the Maritime Safety Agency (now the Japan Coast Guard) can move under the current law."
Araki, then president of Uruma, said he was lost for words, and was doubly shocked that the bureaucrat showed no emotion.

Uruma was created chiefly by Nissho Iwai (now Sojitz Corp.) in 1973 in the midst of the first oil crisis. It was intended to develop oil and gas resources in the East China Sea by taking over the mining rights for which a powerful businessman in Okinawa Prefecture had applied.
The company, whose name means "coral island" in the old Okinawan language, hoped to improve the Okinawan economy by mining natural resources under the sea. But the development plan immediately became deadlocked because the seabed to be developed extended into the territorial waters of the Senkaku Islands, claimed by both Japan and China.

Uruma's trial drilling proposals and production application were met with silence from the central government. Araki visited powerful lawmakers, including Noboru Takeshita and Keizo Obuchi, who both went on to become prime ministers, and urged them to shelve political problems between the two countries and to conclude an agreement to jointly develop gas and oil fields in the East China Sea. But the politicians did not act.
One lawmaker asked, "Can't you make an arrangement for China to propose a joint development in order not to give an impression that Japan has compromised?"

For Japan's oil industry, which has been restricted mainly to refining activities since the end of World War II, oil field development that involves risk but offers potentially huge profits remains a dream. The industry is also inferior in terms of money and political clout compared with the oil majors in Europe and the United States.
Araki said that even if natural gas was discovered in drilling tests, the government -- in addition to the EEZ demarcation problem -- would have to bear the brunt of a battle with China over natural resources. And no bureaucrats were ready to take on such difficult problems.

In addition to Uruma, three other companies filed applications in the 1970s to develop oil and natural gas resources in the East China Sea. They are still waiting for a reply from the government, according to an oil industry executive.
"It is convenient for the government not to confirm whether (such resources) exist," he said.

Source: The Japan Times
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