ChannelNewsAsia.com: Shell rejects report Tokyo forced pullout of East China Sea gas project:  “Anglo-Dutch oil giant Royal Dutch/Shell vigorously denied that its withdrawal from a politically sensitive gas project in the East China Sea was due to pressure from the Japanese government.” (ShellNews.net)

01 October 2004  

SHANGHAI : Anglo-Dutch oil giant Royal Dutch/Shell vigorously denied that its withdrawal from a politically sensitive gas project in the East China Sea was due to pressure from the Japanese government.

"The project did not meet our commercial criteria," Nick Wood, a Shell spokesman told AFP, explaining that the decision that the decision was purely a commercial one.

According to a report in the Mainichi Shimbun, Japan told the oil majors via Washington that their investment would be risky as the planned gas field was located in an area disputed between Tokyo and Beijing.

Japanese officials declined comment on the report in Tokyo. "On matters that involve private firms, we would like to refrain from commenting, including whether there was such contact as reported," said a Japanese foreign ministry official dealing with energy issues. He declined to be named.

A US embassy spokesman also declined comment in Tokyo.

Pecten Orient, a Royal Dutch/Shell subsidiary, and Unocal Corp. said earlier this week it would not go ahead with five contracts to explore, develop, and market natural gas resources in the Xihu trough, citing commercial reasons.

The area is near Japan's territorial waters or exclusive economic zone (EEZ) and Tokyo has voiced concern that China's project could draw resources in Japanese territory via underwater pipelines.

Tokyo in turn has launched a controversial survey for natural gas near the Chinese project and a group of disputed islands, called Senkaku in Japan and Diaoyu in China, claimed by Japan, China and Taiwan.

Japanese Trade Minister Shoichi Nakagawa has said Japan will continue its project.

"I understand that (the firms) have decided to pull out because the project would not pay," he told reporters earlier this week. "Japan would not be affected by their decision and the survey within our EEZ will continue."

Chinese officials were not immediately available for comment on the reports during a public holiday here.

- AFP

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