The government has not yet chosen a company to drill for natural gas in waters contested by Tokyo and Beijing, a top official said Wednesday, after bilateral talks this week to resolve the territorial dispute were inconclusive.
Japan and China have been feuding over an area in the East China that both nations claim as their exclusive economic zone.
China has set up a drilling platform and started exploring gas fields along what Japan believes to be the sea border. China has set the dividing line much closer to Japan.
The Mainichi Shimbun reported Wednesday that Tokyo hopes to select a company to drill in the area in the near future and that the government plans to fund prospecting the exploration for gas.
"We haven't reached the stage where there are specifics," said Chief Cabinet Secretary Hiroyuki Hosoda. "As to the future, it takes a few months . . . before issuing drilling rights."
Japan recently announced that it would take proposals from companies that want to explore in the area, but "at this point, we have no plans to entrust the project (with a company) or start digging" in the seabed, Hosoda said.
Beijing protested last month when Tokyo said it would allow drilling in a disputed section of the sea.