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Japan will prepare to grant exploratory drilling rights in disputed waters of the East China Sea adjacent to where China hopes to launch full-scale drilling for natural gas, industry minister Shoichi Nakagawa said Friday.

His comments came on the heels of an announcement that the Ministry of Economy, Trade and Industry has completed a geophysical survey that found that the two natural gas reserves China is currently developing extend into Japan’s exclusive economic zone.

Unless Beijing releases data on the deposits it is tapping, Japan will conduct its own test drilling for oil and gas, he said.

The minister said: “We want China to suspend drilling. We have repeatedly and politely requested China to release data (on the reserves) so that we can seek a cooperative solution (to issues) in these waters.”

Nakagawa’s remarks are the latest development in Japan’s ongoing disputes with China, South Korea and Russia over rights to develop undersea oil and gas fields.

In particular, Tokyo and Beijing — the second- and third-largest consumers of energy in the world, respectively — have clashed often, as energy prices soar.

“If China does not respond in good faith to our requests, we must proceed to the next step,” Nakagawa said.

Tokyo will wait “about one week” after notifying China of its survey results, then prepare to designate areas for drilling, he said.

Japan has no exploratory vessel of its own. It chartered a seismic ship from Norway in July 2004 for its geophysical survey to determine if the undersea natural gas reserves China is tapping, roughly halfway between Okinawa Prefecture and China, extend into waters claimed by Japan.

Chinese Coast Guard ships approached the exploratory vessel, sending it repeated radio warnings and nearly colliding with it at one point, according to Nakagawa.

METI officials said test-drilling at one location in the disputed region would cost at least 3 billion yen. They said the government plans to shoulder all costs for exploration companies due to the high economic risks.

“This is not a project that private businesses can carry out alone,” a ministry official said. “The government will entrust those companies to test-drill in the sea area.”

It could be months before Japanese firms begin exploration, the officials said.

Several companies have already applied to do the test-drilling, according to the officials.

Information from Kyodo added

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