The government is set to grant Teikoku Oil Co. concessions later this week to conduct exploratory drilling in the East China Sea, a senior official at the Ministry of Economy, Trade and Industry said Wednesday.
Economy, Trade and Industry Minister Shoichi Nakagawa suggested last week that the government will give such rights to the oil developer in about a week as it received approval from the governors of both Kagoshima and Okinawa prefectures, which have state-designated jurisdiction over the area.
The move is expected to draw fire from China, which disputes Japan's exclusive economic zone demarcation.
A Chinese consortium has been actively conducting natural gas projects just on its side of the Japan-drawn EEZ line, in an area close to the sites where Teikoku Oil applied for test drilling. It is scheduled to begin full production at Chunxiao, one of the gas fields, later this year.
On April 28, Teikoku Oil applied to the government for the test-drilling rights at three sites covering a combined 400 sq. km in the East China Sea, following the ministry's decision earlier that month to unfreeze the concession-granting procedures.
The sites are located just east of what Japan claims is the median line separating the 200-nautical mile EEZs of Japan and China. China does not recognize the line.
The oil firm originally applied for exploration rights in the East China Sea in 1969 and 1970 but the government shelved the applications due to the unresolved demarcation.