FACTBOX
JAPAN/CHINA: June 17, 2008
Japan and China have agreed to jointly develop gas fields and share profits
in disputed areas of the East China Sea, Kyodo News reported on Monday, but
the Japanese government said there was no deal yet.
Here are some facts on the main areas of dispute and recent developments:
* Disputes have flared over the development of four natural gas fields in
the Xihu trough, a seabed depression parallel to the Chinese coast, about
500 km (310 miles) southeast of Shanghai. The four fields -- known in China
as Chunxiao, Tianwaitian, Canxue, and Duanqiao -- cover a total area of
22,000 square km.
* Energy internationals Unocal, now owned by Chevron, and Royal Dutch Shell
pulled out of a Xihu trough development deal in 2004 citing "commercial
reasons". Since then China and Japan have been deadlocked in nearly a dozen
rounds of fruitless talks over developing the fields.
* Japan says the Xihu trough extends beyond the boundary between their
exclusive marine economic zones. It fears drilling, even in undisputed
areas, could inadvertently drain Japanese gas through a honeycomb of seabed
rocks.
* The amount of fuel found so far in the Xihu cluster of fields and nearby,
uncontested, Pinghu field, is relatively small. Estimated net known reserves
in the East China Sea total a relatively modest 180 million barrels of oil
equivalent, Japan says.
* The gas is strategically important as part of coal-dependent China's
national ambition to boost cleaner-burning natural gas to 8 percent of its
energy mix by 2010, and reduce pollution. Neighbour Japan, with almost no
domestic oil or gas reserves, also wants more to lessen its dependence upon
imports.
* Chinese operator CNOOC Ltd. said in April 2007 it had begun producing gas
at the Tianwaitian field despite objections from Japan.
* Gas output from the Tianwaitian field last year was equivalent to a
relatively modest 4 million cubic feet per day according to the
state-controlled CNOOC. But an industry source said actual output was now
running at 500,000 cubic metres a day (17.65 million cubic feet).
* CNOOC has said it is ready to begin production from the nearby Chunxiao
gas field, which is close to Japan's claimed boundary and holds the biggest
net gas reserves by far. It estimates reserves at just 4.8 billion cubic
metres -- enough to meet a month of last year's demand.
* The sea also holds a group of eight islets, known as Senkaku in Japan and
Diaoyu in China, over which both Tokyo and Beijing claim sovereignty. The
uninhabited isles are west of Japan's southernmost island of Okinawa,
northeast of Taiwan and east of China's southeastern Fujian coast. Sources:
Reuters (Writing by Gillian Murdoch, Beijing Editorial Reference Unit)
REUTERS NEWS SERVICE
