Co-op agreed for East China Sea oil

China National Offshore Oil Corp. (CNOOC) plans to share investment and risk with Japanese companies in jointly developing gas and oil drilling tools in the East China Sea in accordance with the principle of mutual benefit, according to Zhou Shouwei, the company's vice president.

"The oil circles from both China and Japan have held a positive attitude toward joint development in the area, and believe the consensus reached recently will benefit the peoples of the two countries," said Zhou during an exclusive interview with Xinhua on Thursday.

The Foreign Ministry announced June 18 that China and Japan had agreed to "make the first step in joint development" in the chosen area of the East China Sea in the transitional period before the delimitation of the relevant waters without prejudicing their respective legal positions.

Japan would also participate in the exploration of the Chunxiao oil and gas field in accordance with China's relevant laws.

"The development through cooperation is totally different from the joint development," Zhou said.

Those involved in the joint development will pay tax only to their own countries. All parties share equal investment, risk and profit. However, the development through cooperation is an act that should be done according to the law of the state owning the resources and tax should be paid to it.

Zhou said China's joint exploration of the South China Sea together with Vietnam and the Philippines since 2005 "is going smoothly."

China had more cases for the development through cooperation, Zhou said, noting British and Canadian companies were now conducting oil and gas cooperation in certain areas of the East China Sea.

Zhou said CNOOC, as a state company, welcomed Japanese legal persons to invest in the Chunxiao gas and oil field according to China's relevant laws on exploring for oil and gas in its territorial sea with a foreign counterpart.

"The cooperation will be reciprocal and comply with the commercial principles and the way that CNOOC normally cooperate with other foreign counterparts," he said.

The CNOOC has developed from a small company with an annual production ability of 90,000 tons of crude oil to an internationalized energy company which produces more than 40 million tons of oil annually.