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A Japanese oil company on Thursday requested test-drilling rights in the East China Sea, in disputed waters just a few kilometers from where China is preparing full-scale drilling.

Teikoku Oil Co. submitted an application to the Ministry of Economy, Trade and Industry to drill for oil and natural gas in three areas totaling 400 sq. km. Two of the areas lie flush against the Chun Xiao and Duan Qiao gas fields, where China’s drilling rigs are set up along the border of the exclusive economic zone claimed by Japan.

“We do not have concrete plans to drill at the moment,” said Teikoku Oil’s President Masatoshi Sugioka in a statement. “Drilling in the waters in question would raise safety issues, and any decision will be based on discussion with government officials.”

At least two other companies are preparing to apply for drilling rights in adjacent waters, according to ministry officials. If the applications are approved and the firms drill before the two sides come to an agreement to share undersea resources, the scene could be set for more flareups between the two regional powers.

The application process takes about two to three months.

Teikoku Oil’s application is in reality a more detailed version of the application it submitted in 1972.

On April 13, the Japanese government announced it had reopened procedures to accept test-drilling applications amid strained diplomatic tensions with China.

The application is the first to take into account government data from a geophysical survey compiled April 1 showing the two natural gas fields China is tapping may extend into Japan’s self-claimed EEZ waters.

Both sides have voiced interest in cooperation, which is likely to make development of the gas fields more efficient. But Japan has requested China disclose data on the underwater resources first, which China has refused to do.

Tokyo and Beijing have been unable to agree on the borders of their EEZs. Japan claims the border to be the median line between China’s eastern coast and Japan’s island chain of Okinawa, while China claims the area extending along its continental shelf.

Japanese firms first applied for test-drilling rights along the median line in the late 1960s, but all applications were put on hold because the ministry feared stepping on China’s toes. China was the first to explore the gas fields, beginning construction of an underwater pipeline at the end of 2002, causing immediate concern in Japan.

China and Japan are the world’s second- and third-largest oil consumers, respectively, and two of the largest consumers of energy. Trading companies from the two countries have been increasingly competing against one another for resources ranging from crude oil to copper.

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