THE SENKAKU ISLANDS DISPUTE: OIL UNDER TROUBLED WATERS?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00967A000300030008-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 40
• Document Creation Date: December 20, 2016
• Document Release Date: May 2, 2007
• Sequence Number: 8
• Publication Date: May 1, 1971
• Content Type: IR

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DIRECTORATE OF
INTELLIGENCE
Intelligence Report
The Senkaku Islands Dispute:
Oil Under Troubled Waters?
Secret
Secret
CIA/BGI GR 71-9
May 1971
State. Curt. review corrv Detec
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WARNING
This docume-it contains information affecting the national
defense of the United States, within the meaning of Title
18, sections '793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
[xciuded from nutomotiel
downgroding and
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CONTENTS
Introduction
The Physical Setting
Ownership of the Islands: Historical
Background
The Current Sovereignty Dispute
The Tripartite Committee
Cartographic Evidence of Ownership
The East Asia Oil Situation
Outlook
Figures
Page
1
Figure 1.
Senkaku Islands (Toponymy)
3
Appendixes
Appendix I
Geographic Boundaries of the
31
Appendix II
Ryukyu Islands
Pertinent Provisions
of the
33
1958 Geneva Convent
the Continental She
Maps
ion on
lf
East Asia (500328)
faces page
1
Senkaku Islands (500329)
3
Bathymetry
(500330)
follows page
34
Petroleum Concessions (500343) follows page 34
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EAST CHINA
SEA
EAST'ASIA
SEA OF JAPAN
PHILIPPINE SEA
NAMES AND BOUNDARY REPRESENTATION
130 ARE NOT NECESSARILY AUTHORITATIVE
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
May 1971
The Senkaku Islands Dispute:
Oil Under Troubled Waters?
Introduction
1. The Senkaku Islands, a small group of
East China Sea islets generally accepted as being
Japanese owned, were claimed by Peking as part of
"China's sacred territory" in December 1970. At
the same time the Chinese Communists declared the
exploration by US oil firms in the area constituted
an encroachment on Chinese sovereignty. This
declaration further complicated the already complex
dispute between Taipei and Tokyo that had developed
after the 1968 discovery of a potential oil
reservoir on the continental shelf in the vicinity
of the islets. The Senkaku Islands, uninhabited
and unimportant, have emerged from obscurity to
give their name to an undersea region that
conceivably could cause international conflict;
if oil in commercial quantities is not found, they
could ultimately lapse again into obscurity.
2. The problem posed by the Senkaku area is
complicated by two separate but related issues.
The first deals with the ownership of the islets.
Before the discovery of the potential Senkaku
oil resource,, this issue was of little inter-
national concern; they were of no economic or
Note: This report was prepared by the Office of
Basic and Geographic Intelligence and coordinated
within the Directorate of InteZZigence.
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political importance, were usually uninhabited,
and if any thought was given to them at all, it
was related to sovereignty over the Ryukyu
Islands.*
3. The second issue, concerning jurisdiction
over the adjacent continental shelf, is infinitely
more complex, as existing international law
concerning such matters is contradictory and is
not universally supported. To cope with such
issues the United Nations is scheduling a 1973 Law
of the Sea conference; hopefully, this conference
will create a code that will more clearly define,
inter ilia, the rights of all nations relative to
the jurisdiction of the continental shelf.
The_Pt~y sical Setting
it. The Senkakus are located about 100
nautical miles northeast of Chi-lung, the major
northern port of Taiwan. They are situated
approximately 220 nautical miles from Naha,
Okinawa, and Fu-chou, China, and they are about
S00 miles from Kagoshima, Japan,
5. The Senkakus are volcanic in origin,
having erupted through what is now the seaward
fringe of the outer continental shelf. The islets
are probably identical to the geologic material
that forms the basement floor of part of the
continental shelf. This theory is supported by
evidence developed in a 1969 Japanese survey,
which found plant-bearing sedimentary rocks on
Sekibi-sho and fossil-bearing conglomerates on
Uotsuri-jima (see Map 500329).** There is little
doubt that the islets are on and are part of the
continental shelf.
* The Senkakus are commonly considered as part of
the large Ryukyu Island chain.
** Japanese and Chinese names for the individual
islets are given in Figure 1.
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 Japanese Faroe
Geographical
Romanized
Coordinates
Senkaku Gunto
25?46'N
123032'E
Uotsuri-jima
25?46'N
123?32'E
Tobi-se
25?45'N
123?33'E
Kita-ko-jima
25?45'N
123?35'E
Hinami -ko-jima
25044'N
123?36'E
Oki-no-kita-iwa
25?48'N
123?35'E
Oki-no-minami-iwa
25?46'.11
123?37'E
Kobi-sho
25?55'N
123?40'E
Sekibi-sho
25?53'N
124?34'E
Japanese Generic Glossary
Gunto -- archipelago,
island chain
Iwa -- rock, shoal, reef
Ko-jima -- islet
Se -- shoal, reef, rock, islet
Jima -- island, islet, rock
Sho -- reef, rock
Shosho -- islets
Shoto -- island group
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Figure 1. Senkaku Islands (', jonymy)
Characters Used
by Japanese
Romanized by Chinese Alternate ,James
Tiao-yu-t'ai Lieh-yu
Yu-tiao Tao
Fei-lai
Pei-hsiao Tao
Nan-hsiao Tao
Huang-wei-chiao
------------------------------------------- Kuba-jima
1 \ r A Ch'ih-wei-chiao
Chiu-ma Tao
Taisho-jima
---------------------- -------------- Akao-jima
l
I F--
------ Ta-cheng Tao
Raleigh Rock
Chinese Generic Glossary
Chiao -- reef, rock
Ch'un-tao -- island group
Lieh-tao -- islands
Lieh-yu -- group of islets
Tao -- island
Yen -- rock, island
I
SENKA'KU ISLANDS
0 10 20 50 100 Fathoms
0 5Nautical Miles
T ' I 5S
0 Statute Mile
EAST CHINA SEA
Uotsuri-jima
\/ 0
?0 ; Tobi-se
/\ Kita-ko jima
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------------------
~i~ti ~ .~ ~'- 1
123?45'
25"
__ 124'{4
Kobi-sho6.
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6. With the exception of Sekibi-sho, the
Senkaku islets and rocks rise sharply from the
continental shelf; depths reach 90 meters about
1 nautical mile from Uotsuri-lima, the twin islets
Kita-ko-jima and Mi.nami-ko-jima, and Kobi-sho.
Away from the immediate island area submarine
slopes are very gentle. The portion of the
continental shelf near the Senkakus that is of
concern to oil explorations slopes gradually from
the mainland into an area referred to as the
Taiwan Basin. Water depths in the Taiwan Basin
range from 100 to 200 meters and average 130
meters; in the central part of it, however, there
is a large depression in which the water reaches
a depth of 170 meters.
7. The continental shelf abruptly terminates
and water depths increase rapidly a very short
distance east and south of the Senkakus. About
40 nautical miles southeast of the islets waters
reach a depth of more than 2,700 meters (see Map
500330). This is the deepest part of the
submarine trench that separates the Senkakus and
the East China Sea geological continental shelf
from the Ryukyus. This trench is the basis on
which the Chinese stake their claim that the
Senkakus are on the continental shelf and are
physically detached from the Ryukyus.
8. The islets are uninhabited at present,
but prior to 1945 Uotsuri-jima, the largest islet,
apparently did have a few seasonal residents who
were engaged in fishing and lumbering. Brushwood,
banyan, and rattan palm cover the islets.
Uotsuri-jima has two summits; the one in the west
is almost 1,200 feet high, about 50 feet higher
than the one in the east. Between them is a
ridge with a conspicuous pinnacle rock on its
crest. In contrast to its northern side, which
slopes to shores of sand alternating with rocks,
the south side of Uotsuri-jima drops sharply to
the sea. Small boat landings can be made only on
the western side of the islet near the ruins of a
fish-processing plant.
9. Tobi-se is a detached rock located
between Uotsuri-jima and the twin islets
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Kita-ko-jima and Minami-ko-jima. When approached
by ship from most directions, these islets appear
to be one; actually they are separated by a
300-yard-wide shallow channel. Landings on their
rock, coral, and sand shores can be made by small
craft, but only when the sea is calm. Each of
these islets is more than 400 feet high, rocky,
and treeless, but coarse grass occurs in places.
Oki-no-kita-iwa and Oki-no-minami-iwa are barren
rocky islets due north of Kita-ko-jima. Kobi-sho,
about 12 nautical miles northwest of Uotsuri-jima,
is the summit of an extinct volcano. It rises to
an elevation of almost 400 feet above sea level.
Kobi-sho has no beaches; its shoreline is ringed
with dry, awash, and submerged rocks that would
make the landing of small craft extremely
dangerous. Palm trees and undergrowth cover all
the slopes.
10. Sekibi-sho is an isolated islet about
47 nautical miles east of Kobi-sho. A treeless
pinnacle of lava, it is fringed on all sides by a
low, broken, flat shelf, from which arise
precipitous cliffs that reach crest elevations of
over 250 feet.
11. The waters near the Senkakus are fished
for bonito by the Taiwanese; Ryukyuan fishermen
seldom fish in this area because the winds and
currents are predominantly unfavorable. Shell-
fish are also taken, and fishermen search the
islets for eggs, feathers, turtle shells, and
guano. There is no indication of recent
lumbering; in all probability exploitable timber
resources have been exhausted.
Ownership of the Islands: Historical Background
Before World War II
12. The Senkakus should be examined in the
context of their relationship with the Ryukyu
Islands. Some Chinese claim the Senkaku Islands
were mentioned in Ming dynasty documents as early
as 1403; in contrast, it is likely that the
earliest Japanese references to the islets were
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made sometime in the late 19th century. Japanese
involvement with the Ryukyus, however, is dated
from about 1166, the year of the birth of the
first king of Okinawa, whose father was a Japanese
nobleman in exile.
13. Near the end of the 12th century Satsuma
Province was established on the southern part of
the Japanese island of Kyushu. The ruler of this
province was given the title "Lord of the Southern
Islands," thus indicating the first Japanese
claim to the Ryukyus. During the latter part of
the 14th century, however, formal relations were
established by an Okinawan ruler with the new Ming
dynasty in China, and a Chinese community was
established in Okinawa at Naha. Promising young
Okinawans were taught Chinese and then sent to
China for 2 or 3 years of higher education.
14. Although students continued to study in
China, the Japanese influence was increasing, and
in 1572 the first Okinawans to be educated in Japan
were sent to Kyoto. Shortly after the Tokugawa
Shogunate came to power in Japan in 1603, the
Japanese conquered Okinawa by force and made it a
dependency of Satsuma Province. From this time on
Okinawa became increasingly dominated by Japan,
which formally established the area as a Japanese
prefecture in 1879.
The US Occupation
15. US military forces have occupied the
Ryukyus continuously since the end of World War II.
By virtue of Article 3, Chapter II, of the Treaty
of Peace with Japan, which entered into force in
April 1952, the United States has the right to
exercise any and all powers of administration,
legislation, and jurisdiction over the quondam
Japanese islands south of 29?N., including the
territorial waters. The United States, however,
relinquished control over the Amami Islands in
December 1953 and returned them to Japan; included
in this transfer were "all of those islands, islets,
atolls, and rocks" situated north of 27?N,
Remaining under US administration were three major
Ryukyu island groups (guntos) -- Okinawa, Miyako,
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and Yaeyama. Miyako and Yaeyama form Sakishima
Gunto, which is located about 75 miles due south
of the Senkakus.
16. The Senkakus are located within the
area administered by the United States under
Executive Order 10713 of June 1957.*
The Current Sovereignty Dispute
The Japanese Position
17. Spurred by the findings of a 1968 UN
hydrographic survey of the East China Sea, the
Japanese Government in 1969 sponsored a survey,
headed by Professor H. Niino of Tokyo University,
of the submarine geology near the Senkakus.
Apparently at that time the Japanese gave no
thought to the possibility that their sovereignty
over the Senkakus or the contiguous continental
shelf would be challenged. The Japanese Govern-
ment released glowing newspaper accounts that
NIiino's survey confirmed the 1968 UN discovery
of a potentially great oil reserve on the
continental shelf near the Senkakus.
18. The first inkling that the Government
of the Republic of China (GRC) might formally
challenge Japanese sovereignty in the area came
on 20 July 1970, when a GRC official queried the
Japanese Embassy in Taipei about the exact mean-
ing of the term "Nansei Shoto" -- the Japanese
name for the Ryukyu Islands -- and whether or
not it was intended to include the Senkakus.
Tokyo reacted to Taipei's inquiry by creating
a Gaimusho (Foreign Office) task force to study
international law pertaining to the continental
shelf and territorial claims and to draft a
basic Government of Japan (GOJ) policy. The
Japanese also requested a meeting with the GRC
in the summer of 1970 to discuss the Senkakus
situation.
* See Appendix I for geographical boundaries of
Ryukyus.
SECRET
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19. Two incidents in the summer of 1970
intensified Japanese, Nationalist Chinese, and
Ryukyuan interest in the Senkakus. A GRC flag
that was planted on the Senkakus was removed by
the Government of the Ryukyu Is lands (GRI), and
a painted slogan, "Long live President Chiang",
was obliterated. In the second incident a group
of Taiwanese fishing boats allegedly were ordered
by two Japanese naval patrol boats to leave the
waters of the Senkakus. The GRC denied having
instigated the flag and slogan incident, and the
Government of Japan (GOJ) denied that Japanese
naval vessels were involved in the dispersal of
the fishing boats.
20. By mid-September in 1970, the GOJ had
taken the official position that the Senkaku
Islands belong to Japan and were not a matter for
negotiation with any country.* The GOJ saw the
continental shelf problem, however, as a separate
and different matter, which it was willing to dis-
cuss with GRC.
* A possible precedent exists should the Senkakus
question ever reach the International Court of
Justice or any other international adjudicating
body. In 1953, Great Britain and France contested
the ownership of islets and rocks known as the
Miniquiers group. This islet group is located in
the Gulf of St. Malo, 110 miles from the British
coast, but only about 25 miles off the Normandy
coast on the French side of the English Channel.
The situation is closely similar to that of the
Senkaku Islands: the Miniquiers are on the
geological continental shelf and there is a sub-
marine trough between the Miniquiers and Britain.
Britain contended the Miniquiers were part of
their Channel Islands. The International Court
of Justice unanimously upheld the British
sovereignty claim, basing its decision on old
French maps that indicated the Miniquiers to be
"possedes par 1'Angleterre".
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The Government of the Republic of China (GRC)
Position
21. Taiwanese fishermen provided the only
significant GRC contact with the Senkakus prior
to 1969. They fish in this area every spring,
and occasionally they come ashore to collect bird
eggs. These intrusions are often protested by
the United States Civil Administration, Ryukyus
(USCAR),* and usually the GRC replies in a
cooperative manner.**
22. The 1968 UN-sponsored hydrographic sur-
vey was a multinational effort in which the GRC
had participants aboard the survey research
vessel. Despite the findings of the survey, Taipei
did not make even an informal claim to the resources
of the continental shelf until almost a year later.
In July of 1969, just as the Japanese survey was
receiving great publicity, the GRC granted a
concession to an American oil firm (Gulf) to
explore the continental shelf area around the
Senkakus for oil. Simultaneously, GRC diplomats
* USCAR was established on S December 1950 to
direct the military occupation and the govern-
ment of the Ryukyus. USCAR Proclamation 13 of
1 April 1952 established the Government of the
Ryukyu Islands (GRI) to provide an indigenous
domestic government through which the Ryukyuan
people may be represented.
** The United States protested such an intrusion
in 1968, and Taipei's reaction at that time could
prove embarrassing if a GRC claim to the Senkakus
is pressed. The CRC accepted the legitimacy of
the US representation and stated its intent to
keep such intrusions under control; said that the
crew and owners of the fishing vessel had been
convicted and penalized for the intrusion; solicited
US suggestions for more effectively controlling
intruders and tracing offenders; and indicated that
the Fisheries Bureau of the Taiwan Provincial
Government had been instructed to stop such
intrusions and had established penalties for
violators.
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informally disputed the Japanese claims of residual
sovereignty over the Senkakus, basing their case on
the San Francisco Peace Treaty that limited Japan's
sovereignty to the four main Japanese islands.*
23. The GRC was not a party to the 1958 Geneva
Convention on the Continental Shelf and for over a
decade paid little attention to it. Shortly after
the 1969 Japanese survey, however, the GRC hastily
ratified the Continental Shelf Convention. This
convention provides for the establishment of boundaries.
When two or more states are adjacent to or opposite
the same shelf, the boundary of the continental shelf
appertaining to them shall be resolved between the
states concerned. In the absence of such an agree-
ment, the boundary shall not be beyond a median line
drawn from the baselines that determine the territorial
seas of each state (see Appendix II). The GRC has
reserved its position on this provision, however, and
has asserted that the continental shelf boundary
between two or more states shall be determined in
accordance with the principle of the natural pro-
longation of their land territories. Accordingly,
the GRC claims jurisdiction over the shelf as an
extension of the China mainland, of which it claims
* There are two possible explanations for
Taipei's unseeming delay in claiming continental
shelf resources. The most likely explanation is
that the GRC had been informed of the significance
of the 1968 findings but had decided not to
publicize its awareness. This possibility is
based on the assumption that a considerable period
of negotiation with the oil firm that received the
GRC concession must have preceded the ,July signing
of the concession. On the other hand, it is
possible that the GRC personnel participating in
the UN survey did not inform their government of
the significance of the survey's findings or their
report was not judged important enough for Taipei
to make an immediate claim on the resources of the
continental shelf.
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to he the legitimate government. To counter any
Japanese claims to a portion of the shelf, based
on a claim to sovereignty over the Senkakus, the
Chinese have entered the further reservation that
exposed rocks and islets shall not be taken into
account when determining the boundary of the
continental shelf.
24. The GRC took an even stronger position
by publicly claiming sovereignty over the Senkakus
in February 1971 instead of merely refuting the
Japanese claims. In a recent note verbale, which
was not released to the public, the GRC Ambassador
in Washington requested the United States to
"respect the sovereign rights of the Republic of
China over Tiao-yu Tai. islets and restore them
to the GRC" when the US occupation of the Ryukyu
Islands terminates.
The Government of the jyuyu I s lands (GRI )
Position
25. Aware of the prospects and benefits of
an oil discovery on the continental shelf near
the Senkakus, the GRI was alarmed by both the GRC
claim to the Senkakus and the possibility that,
upon reversion of the Ryukyus to Japan, the rewards
of the discovery might go to the Central Government
in Tokyo without direct benefit to the Okinawan
economy.
2b. Consequently, native Ryukyuan leaders,
in order to refute GRC claims, built their own
case for sovereignty over the Senkakus. They
pointed out that the World Meteorological Organ-
ization, an organ of the United Nations, recognized
'Jotsuri-jima as part of the Ryukyus; that the
Senkakus had been under the administration of
Ishigaki* before World 4ar Ii; and that Article I
of USCAR Proclamation # 27, "Geographical Boundaries
in the Ryukyu Islands", based on the Sari Francisco
* Ishigaki is the largest city on Ishigaki-shima
of Yaeyama Gunto.
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Peace Treaty, distinctly placed the Senkakus
within the area under US administration. The
Ryukyu officials also announced that. the GRI has
been receiving taxes annually from an individual
who has title to four of the Senkaku islets.
27. In September 1970 a GRI legislative
delegation was sent to Tokyo to submit
legislative resolutions concerning the protection
of GRI territorial rights over the Senkakus. In
its official statement on 10 September 1970, the
GRI claimed that the Senkakus were a part of the
Ryukyus, and it supported the applicability of the
Geneva Continental Shelf Convention (that is,
where there is no agreement between nations on the
division of a common continental shelf the
delineation shall be based on equidistance). By
this proclamation the GRI in effect was trying
to force Tokyo to adopt a similar position.
The People's Republic of China (PRC) Position
28. Peking publicly proclaimed a 12-mile
territorial sea in 1958, but for the next 12 years
made no significant public statement on the sea or
the continental shelf. While the 1968 UN survey
undoubtedly stimulated Peking's interest in the
potential oil resources under the East China Sea,
the PRC remained silent as to its interpretation
of sovereignty over the continental shelf. When
the GRC-GOJ dispute over the Senkakus flared, and
even as concessions were granted by Taipei and.
Tokyo to foreign oil companies, the PRC continued
its silence. As long as the Taipei-Tokyo dispute
continued to be hung up on non-negotiable positions
Peking apparently felt no urgency to study the
continental shelf or ocean management problems in
order to establish a position and policy on such
matters.
29. An indication of Peking's leanings, however,
was gained by following the communist press in Hong
Kong. The Hsin-wan Pao and the Ta-kung Pao published
articles in August ancFSeptember 1970, respectively,
which stated that Asian underwater petroleum resources
were being plundered by the United States and Japan
and that Taiwan's petroleum resources were being sold
out by "the Chiang gang" to the United States. Peking
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did not break its silence on the matter until the
efforts of quasi-governmental and business interests
in Tokyo, Taipei, and Seoul (The Tripartite
Committee), who sought to reach a modus vivendi,
appeared to have a chance of success.
30. A New China News Agency (NCNA) broadcast
on 3 December 1970 blasted the tripartite effort
and claimed the Senkakus were part of China's
continental shelf, ergo Chinese, not Japanese.
The position taken in this broadcast was amplified
by a written article, which charged that the
motivating force behind Japan's claim to the
Senkakus was her need for petroleum to satisfy
a growing military establishment. The precise
extent of PRC's continental shelf claims, however,
was not announced. Basis for the claims of both
Chinese governments presumably are identical --
historical, locational, and legal.
31. The PRC claim to the Senkakus was pro-
bably viewed with mixed emotions by Taipei, whose
position for dealing with Tokyo was strengthened
by the "united" Chinese front on the issue.
Simultaneously, however, the PRC claim probably
adversely affected the ability of the GRC to reach
an early and direct settlement with the Japanese
so that exploitation of the shelf resources could
get under way at an early date. The Japanese press
interpreted Peking's announcement as a reminder
that the Chinese Communists consider Taiwan and the
Fast China Sea continental shelf as part of China;
Furthermore, it indicated that despite a prolonged
reticence to take a position, the leaders in Peking
fully intended to exploit the continental shelf of
China and to control the ocean resources associated
with it.
32. The action taken in Peking to claim the
Senkakus was motivated by what was considered to be
a dangerous foreign infringment of China's
territorial rights. The PRC also fears that GOJ-GRC
cooperation in developing the oil resources of the
continental shelf would strengthen Japan's interest
and influence in Taipei and thus complicate the
ultimate settlement of the Taiwan problem.
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33. Although the Chinese Communists have
claimed the Senkakus, they still have not announced
a clear position relative to continental shelf
boundary limits or ocean development. Peking has
given strong propaganda support for the 200-mile
territorial sea claims of Latin American nations,
however, and in a November 1970 pronouncement it
supported the right of countries to determine their
territorial sea limits "in accordance with their
geographical conditions and geological and biological
characteristics as well as the need of a rational
use of their own resources." In a 24 December 1970
dispatch, the NCNA applauded the resistance of these
nations in their "struggle" at the 25th General
Assembly of the United Nations to thwart "US
imperialism and the other super power" in "their
criminal scheme for dividing and dominating the
oceans." By such pronouncements the PRC leaves
open to speculation the possibility that it ma
also claim a very broad territorial sea.
34. Additional evidence suggests that China's
ultimate position may be on the moderate side. In
January 1971 the PRC referred for the first time to
the Geneva Convention on the Continental Shelf.
Previously, international agreements or accepted
international law were not used either as leverage
or as a means to support PRC thought on the Senkaku
issue. In the same month the Peking Review
published excerpts from an article in the British
newspaper Guardian. Included in the excerpts
was a statement by a British author that "the Chinese
cannot lay claim to the entire continental shelf in
areas contiguous to Japan and South Korea, which also
enjoy similar rights as coastal states." The printing
of this statement suggests tacit approval of its
thought and may indicate Peking might be willing some
day, under conditions of her choosing, to enter into
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agreements on the apportionment of the East China
and Yellow Sea continental shelf.
The US Position
35. The territorial extent of the Ryukyus,
as accepted by the United States, had been
identified long before the sovereignty of the
Senkakus became an issue.* Early in the US
administration of the Ryukyus, the US Navy selected
two Senkaku islets, Kobi-sho and Sekibi-sho, as
gunnery ranges. Kobi-sho is privately owned, and
the United States pays an annual rent ($11,000 in
FY 1971) to the registered owner of the islet who,
in turn, pays taxes to the GRI for this and three
other Senkaku islets registered in his name.
Sekibi-sho is 'used by the US Navy for a ship-to-
shore and air-to-ground range, but as it is former
Japanese state property, it is available to the
United States without cost.
36. The first direct US involvement with the
problem of Senkakus oil resources occurred in the
autumn of 1969. At this time USCAR established a
policy whereby US approval was required prior to
GRI or third party use of the tidelands or
territorial waters. The seabed under the territorial
waters in the Ryukyus is administered as part of the
public lands by USCAR. The United States was able
to maintain a low posture to avoid formal involve-
ment until the 1970 dispute between GRC and GOJ over
Senkaku sovereignty reached a serious level. It
then became necessary for the United States to make
a public statement. This was done reluctantly,
however, as the US position with respect to conflicting
claims is that such matters should be solved by the
parties concerned. The US statement had a dampening
effect on the GRF-GOJ struggle and contributed to the
shift of the dispute to the quasi-governmental,
GOJ-GRC-ROK Tripartite Committee.
The Tripartite Committee
37. In the early autumn of 1970 it became
apparent that GRC-GOJ governmental positions regarding
See Appendix I.
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sovereignty over the Senkakus had become rigid
and that ROK-GOJ negotiations on conflicting
continental shelf claims were not progressing
satisfactorily. Business and national leaders
in Japan, Taiwan, and South Korea, therefore,
collectively sought a modus vivendi that would
permit oil explorations on the continental shelf
even in disputed waters. Accordingly, on 12
November 1970, high level representatives from
each country met in Seoul to form a. private
"liaison committee." The group received a
Japanese proposal to form a joint-venture company
for ocean development, exchanged opinions, and
agreed to meet again in Tokyo. The Seoul meeting
triggered the 3 December 1970 PRC accusation that
the ioTnt develcpment plan was in reality a trick
instigated by Japanese militarists, aided and
abetted by "the Chiang Kai-shek bandit gang and
the Pak Jung Iii clique," and whose purpose was
the plundering of the seabed and undersea oil
resources of China and Korea.
38. The second meeting of the Tripartite
Committee, in December. 1970, resulted in agree-
ment upon a broad purpose -- the "planning and
execution of surveys, research, and development
of marine resources." The conferees also agreed
to try to keep their negotiations out of formal
international diplomatic channels unless or until
it became apparent that chances of securing agree-
ment seemed favorable. By this methe they left
an avenue open for the continuation of current
and planned exploitation surveys without halting
research operations because of sovereignty disputes.
Each country is to establish its own national
development committee that will conduct independent
surveys on a basis of mutual cooperation. Such
surveys presumably would continue the hydrographic
work already contracted by each nation through
concessions to foreign oil firms.
39. Domestic problems and national goals of
each country make acceptance of the joint-venture
company approach somewhat complicated. Consequently,
the next meeting was not scheduled to be convened
until May 1971. This schedule was adopted to give
the committee delegates time to resolve domestic
opposition to the concept of a joint-venture
company. The preoccupation of the Koreans with
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national elections held in April, however, and
a GOJ-ROK economic cooperation meeting scheduled
for July, suggest that the next meeting may slip
until late summer or early autumn.
40. Peking, by issuing verbal warnings, may
hope to delay GOJ-ROK-GRC exploitation of the
Cast China Sea continental, shelf long enough to
permit its own offshore drilling techniques and
expertise to mature. The Chinese Communists
have been interested in offshore drilling
techniques for several years, and have been
seeking a drilling vessel capable of operation
in the open ocean. The first Chinese offshore
drilling rigs were sighted in February 1969,
working in the shallow sheltered waters of Po-Hai
(Gulf of Chihli) near T'ien-chin. This area
provides an excellent training ground for the
Chinese to develop continental shelf drilling
expertise, and work here could prove economically
rewarding, as Po-Hai forms part of the sedimentary
depression that also includes the oil fields of
'Fa-ch'ing in Manchuria and Sheng-li in Shantung.
Cartographic Evidence of Ownership
41. Judicial. bodies often accept maps as
documentary evidence in boundary dispute cases.
Strong support for the Japanese claim to the
Senkakus exists not only on Japanese maps but
also on maps published in Peking and Taipei.
42. The "Red Guard" atlas of 1966, published
in Peking during the Cultural Revolution, includes
a map of the internal administrative areas of
Communist China. This map definitely indicates
that the ocean area in which the Senkakus are
located is beyond China's border; it also indicates
that the Ryukyu Islands are Japanese. Another map
in the same atlas includes Taiwan and the ocean
area to 122?10'E and 25?50'N -- thus excluding the
Senkaku ocean area north and east of Taiwan. This
is in contrast to current PRC practice in which
the Senkakus are frequently referred to as "Taiwan
and the islands appertaining thereto."
43. The same maps, with the same boundary
lines -- which indicate that the Senkaku Islands
belong to the Ryukyus, and therefore to Japan --
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are shown in the August 1967 "popular edition"
of Atlas of China, also published in Peking.
The legends us-ed in these recent Chinese atlases
include two types of international boundary: some
are identified simply as "national boundary";
others are designated as "unsettled national
boundary." The latter category is used to identify
areas in dispute. That Peking did not contest
Japanese sovereignty over the Senkakus prior to
the oil discoveries is clearly indicated by the
use of "national boundary" lines to delimit East
China Sea international boundaries in both atlases.
44. None of the Chinese Nationalist maps
that were examined indicate that the Senkaku
ocean area is within China's boundaries. In the
1963 National Atlas of China, Volume 1, printed
by the GRC National War College, for example,
several 1:250,000 maps of Taiwan are presented.
The map of the extreme northern tip of Taiwan
includes a special small-scale inset, on which
Peng-chia Hsu,Mien-hua Hsu, and Hua-ping Hsu,
located about 35 miles offshore to the northeast,
are depicted; the Senkakus, located about 80 miles
to the east of these islets, however, are not shown.
45. The Chinese Petroleum Corporation (CPC),
GRC's government-owned oil development and producing
organization with which all foreign concessionaires
must deal, published a 1:4,000,000 geologic map of
China in June 1970. The Senkakus were not depicted.
Shortly after the GRC-GOJ dispute over the Senkakus
in the summer of 1970 the Republic of China's
Ministry of National Defense published an Atlas of
China. It was compiled by the Chinese Army's
Topographic Service and printed by the Army's Map
Service. This atlas includes maps of the eastern
half of China, at 1:13,000,000; they show the
Senkakus, giving the Chinese name for them along
with the Japanese name in parentheses. In a 1962
edition of these same maps the islands were unnamed.
46. A random selection of maps printed in
Europe and privately published do not indicate the
area of the Senkakus to be Chinese. Furthermore,
the 1967 edition of the USSR's official Atlas of
the World included a 1:2,500,000 map that
specifically designates the Senkakus to be Japanese.
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The East Asia Oil Situation
.Town's Oil Situation
117. Oil is literally at the bottom of the
Senkaku dispute. While all concerned powers are
eager to establish their rights to these potentially
large resources, the importance of petroleum to
the nations involved varies greatly. Among the
disputants, Japan has the highest level of petroleum
technology, and she alone has all of the necessary
capital resources to invest in exploration and
production. Yet, Japan is in the most critical
position from the standpoint of oil supply. This is
clue to the almost total lack of significant domestic
crude oil resources* and to the fact that petroleum
is the prime energy source for the rapidly expanding
.Japanese economy.** Japan consumes 3.8 million
barrels of crude oil per day, a consumption rate
that is expected to quadruple in the next 15 years.
At present, 90 percent of Japan's crude oil comes
from the Persian Gulf; although some of this is
produced by Japanese companies, over 85 percent of
the total Japanese supply is obtained from foreign
sources. This costs Japan almost 2 billion dollars
per year, and represents over 10 percent of her
total national imports. The remotest possibility
of a significant oil reservoir on Japan's continental
shelf, therefore, is a tantalizing prospect.
GRC's Oil Situation
48. Petroleum products consumption in Taiwan
doubled between 1.965 and 1969, when oil accounted
for 30 percent of the country's commercial energy
requirements. Continued petroleum consumption
growth is forecast. Oil is replacing coal as
Taiwan's prime energy source, and it is being
increasingly used to produce Taiwan's thermal
* Only about 1 percent of Japan's oil requirements
are met by domestic crude resources.
** Oil supplies 68 percent of Japan's energy
requirements presently, and it is expected to supply
75 percent within the next 5 years.
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electric power (representing two-thirds of installed
power capacity and three-fourths of power produced).
Further, Taiwan's new petrochemical industry, which
has been accorded a high priority in the Fifth
Four-Year Plan (1969-1972), is increasing the nation's
requirement for crude oil.
49. As domestic crude production is very limited,
over 90 percent of the GRC's oil supply is imported
(70,000 barrels per day in 1968), mainly from Kuwait,
Iraq, and Saudi Arabia. Furthermore, the Chinese
Petroleum Company's (CPC) director of exploitation
and production has indicated that virtually all of
Taiwan's indigenous onshore oil reserve exploration
possibilities have been exhausted. This has led the
GRC to adopt a policy of authorizing foreign companies,
in association with the CPC, to explore and develop
offshore reserves. This policy is largely explained
by the fact that the GRC does not have adequate funds
or sufficient technological experience to pursue
independent offshore programs.
PRC's Oil Situation
50. Petroleum presently provides only about
10 percent of Communist China's primary energy.
Virtually all of her limited liquid fuel requirements
are met by domestic production.* Only 3 percent of
the total crude oil supply in 1970 was imported, and
part of this was for political reasons. Demand
generated b,y China's growing inventory of petroleum-
consuming equipment will probably be met or exceeded
by the growth of her petroleum industry, which may
even permit the eventual export of petroleum products.
51. The PRC is developing an offshore exploration/
exploitation capability, but progress is handicapped
by inadequate technology and equipment. To overcome
these weaknesses the Chinese have attempted to purchase
(unsuccessfully to date) a Japanese-constructed
offshore drilling platform, designed originally for
use in Indonesian waters.
* About 18 million tons were produced in 1970.
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Initial Exploratory Survys for Oil
52. The UN ECAFE CCOP* survey of the East
China Sea and the Yellow Sea was conducted in
October and November of 1968. This preliminary
geophysical study was the work of scientists from
the United States, Japan, Korea, and Nationalist
China. Geological formations revealed by this
survey strongly suggest that the continental
shelf around the Senkakus could be a potential
petroleum resource area.
53. This discovery prompted the Japanese
to make a more detailed survey in 1969. This
survey was headed by Professor Niino and largely
financed by the Japan Petroleum Development
Corporation. Niino's team of Tokyo University
scientists confirmed the UN survey findings. It
established the existence of marine tertiary
deposits, more than 6,000 feet thick, in the area
surveyed. It also discovered that folding
structures, identified as three large barriers
and numerous small ridges, existed in several
places. This was a significant finding, for it
indicated the possibility that geological formations
exist to entrap the oil-forming elements that are
almost certain to be found in the thick marine
sediments. The report issued by Niino's group
specifically stated that their findings, while
generally optimistic, were not sufficient to
evaluate the presence of oil resources since the
data collected was still inadequate. Niino's
caveat was minimized in the great publicity that
followed the Japanese Prime Minister's press
release in which the presence of vast continental
shelf oil deposits near the Senkakus was announced.
his recommendation that subsequent surveys were
required was acted on, however, and a second
Japanese survey was conducted in the summer of 1970.
I "C
UN ECAFE CCOP -- Committee for Coordinating
Joint Prospecting for Mineral Resources in Asian
Offshore Areas (CCOP), which is an element of the
Economic Commission for Asia and the Far East
(}:CAFE), a United Nations organization.
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54. The second survey, results of which
were also promising, indicated the geological
structure of the continental shelf might be
identical with those of the oil producing
tertiary deposits of western Taiwan as well as
with those near Japan. The Japanese were much
more discreet in revealing data developed by
this exploration, as they wished to avoid
intensification of the sovereignty disputes that
erupted following the release of data supplied
by Niirio's survey. Japan apparently also felt
it unwise to provide free geophysical data,
which only serves to whet the Chinese Communist
interest. A more sophisticated Japanese survey
(the third) is planned for June 1971, prior to
the first actual drilling in the area.
Offshore Concessions
55. Although the Senkaku dispute has had
more publicity, due in part to its having drawn
a reaction from Communist China, serious
continental shelf sovereignty problems had
previously arisen between japan and South Korea.
Both of these nations have granted licenses or
concessions to foreign oil companies to conduct
geophysical research in assigned areas. Con-
flicting claims to an area southwest of Kyushu,
one of the principal islands of Japan proper,
arose in 1970 when South Korea signed an
exploration agreement with a US firm, the
Wendell Phillips Oil Company. The large,
irregular, 25,000-square-mile area. granted to
Phillips partly overlapped a concession
previously granted to the Nippon Oil Company by
Japan. It also overlaps a small portion of a
concession granted by the GRC to Clinton Oil
Company (see Map 500343).*
Although the concession areas indicated on the
map are believed to he accurate they must not be
considered authoritative. For example, the JAPEX
concession as indicated on the map does not in-
clude the Senkakus. Conflicting information,
however, suggests the Senkakus are included in
the JAPEX area.
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56. In October of 1970, Taipei also claimed
part of this area, which is referred to by the
CRC as Zone V.* This claim covers an area
extending from the Chinese Petroleum Corporation
and Clinton zone north to the 32nd parallel and
east to the 128th meridian. Zone V overlaps
much of the Phillips and Nippon Oil concessions,
hut the GRC probably will not grant a concession
in this area as long as the Tripartite Committee
negotiations offer hope for the solution of the
overlapping concession problem. Japan has been
holding in abeyance all applications for
exploration/exploitation rights in disputed areas,
hoping a modus vivendi may be reached.
57. The westernmost boundary of Zone V,
,and all other GRC zones, was defined by the CRC
Hxecutive Yuan as extending to the coastline of
mainland China. The western boundary of the
concessions as defined by the CPC agreements,
however, conform to an approximate median line
drawn between Taiwan and the Ryuk us on one side
and the mainland on the other.
Current Status of Concessionaire Survey Work
58. Actual concessionaire geophysical
survey work in the Senkaku - East China Sea area
started in autumn of 1970. The survey of GRC
,,one 1, undertaken by the United Geophysical
Corporation (See Map 500343), was the first to
,et underway. Operations were delayed
f=requently by bad weather, a condition that has
x CRC concession zones are numbered from south
to north; Amoco has Zone 1, Gulf has Zone II, etc.
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had the same effect on surveys in Zones II and
III which were to have been completed by January
1971. The GRC contract held by Clinton for Zone
IV requires that reconnaissance and detailed
seismic work must be started no later than March
1971 and be completed within 1 year. Nippon Oil
Company was also to have initiated seismic
operations early in 1971. It is considered
unlikely that survey operations will be under-
taken at present in GRC Zone V, the Teikoku, or
Phillips concession areas.
59. Despite ominous warnings from Peking
and muddled sovereignty issues, survey work has
progressed almost according to plan. Present
survey operations, however, are being conducted
at a discreet distance from mainland China, a
circumstance unlikely to change until total
accord is reached. There is little concern on
the part of concessionaires that their work in
areas disputed by GOJ ROK, or GRC may be
harassed or sto ed.
Thus foreign oil firms (mainly US-owned)
willing y accept the risks involved in exploring
these areas of disputed sovereignty. They may
not be willing, however, to accept the heavy
investments required for actual production until
such time as the disputes are solved.
Outlook
60. No oil has yet been produced in the
Senkaku continental shelf area or in any of the
areas of disputed sovereignty in the East China
Sea. Even the step prior to production, the
test drilling of exploratory wells, has yet to
be accomplished. Consequently, the question as
to whether there is recoverable crude oil in
commercially exploitable quantities remains
unanswered.
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61. A great number of profit-motivated
petroleum geologists and geophysicists are
obviously convinced that the data developed by
the preliminary surveys are worthy of further
study. Their professional opinions, in combi-
nation with attractive, or at least acceptable,
host-nation contracts, have caused a scramble
for concessions in the East China Sea. Many
American geologists feel the area could be one
of the ten largest oil deposits in the world.
ur, er, the an areas around the
East China Sea that are presently producing oil
are actually geological extensions of the
submerged basin now being surveyed.
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64. Exploratory wells in the Senkaku area are
quite likely to hit oil, and they will answer the
"crunch" questions of whether commercial quantities
exist. It is uncertain, however, as to whether the
drilling will commence in 1971 as planned. The
Communist Chinese warning is being taken seriously
and has put a definite damper on Tripartite Commit-
tee planning. The member nations of the committee
(GOJ, GRC, ROK), however, may proceed with exploi-
tation of the East China Sea continental shelf
either unilaterally or in concert, should they
determine the rewards are worth the risks. Despite
Peking's record of being adamant on territorial
issues, drilling of exploratory wells would not be
likely to provoke a Chinese Communist military
response. The seaward extension of credible
Chinese Communist military capability is limited,
and the initial test drillings would probably be in
the proximity of the Senkakus, perhaps within the
zone administered by USCAR or close enough thereto
(such as GRC Zone IV) to deter Peking from overt
military action.
65. The decision to proceed with the explor-
atory work in the East China Sea will probably be
made in Tokyo rather than in Taipei or Seoul.
Throughout the period of diplomatic and public
discussions over the Senkakus, the GRC has constantly
expressed concern that the dispute should in no way
jeopardize the good relations existing between it
and Japan or with the United States. The Chinese
Nationalists feel compelled to take a strong public
position, but their true and pragmatic goal is to
obtain a fair share of the economic benefits to be
had from the exploitation of the continental shelf
oil in that part of the East China Sea area to which
they conceivably have a justifiable claim.
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66. For its part, the ROK is unlikely to
antagonize Japan by sanctioning oil exploration
operations in the zone of their overlapping
concessions. Both the ROK and the GRC, however,
may be expected to encourage Japan to push for-
ward with the joint development plan, not so
much for the petroleum, but rather as a means
of drawing Japan into a regional security
grouping, even though they share fears of
Japanese domination.
67. Tokyo is thus left with an obligation
to make an agonizing decision, which may become
more difficult if delayed. The increasing
demand in Japan for petroleum and the desire to
accommodate Taipei and Seoul are being weighed
by Tokyo against the potential economic return
expected from normalization of trade relations
with Peking. Japan will probably proceed,
however, with test drilling in the Senkaku area
or it will tacitly encourage the GRC to do so.
If no commercial quantities of oil are discovered,
the Senkaku issue would disappear and a confronta-
tion with Peking would be avoided. If significantly
large reservoirs are indicated by the test drilling,
Tokyo may feel compelled to accept Peking's wrath
and opt for a joint exploitation venture in which
Japanese interests could be expected to be, or
become, dominant.
68. The cautious and deliberate development
of PRC policy on territorial sea and continental
shelf matters is still continuing. At this point,
the PRC seems to be leaning toward adoption, with
reservations, of the principles of the 1958 Geneva
Convention on the Continental Shelf. This may be
the only way the PRC could effectively argue its
case should it ultimately be presented to an
international court for decision. But to bypass
Article 6, Section I of the Geneva Convention (See
Appendix II), Peking would have to either eliminate
Japan's claim to the Senkakus or their use as
hasepoints in the construction of an equidistant
line dividing the continental shelf. If Japanese
sovereignty over the Senkakus were sustained by an
international judgment, China might be in a
position of having to accept Japanese territorial
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sea boundaries that would result in a division
of the continental shelf that is much more
favorable to Japan.
69. Whatever the turn of events, it is
unlikely that the Senkaku sovereignty issue,
superficially the focal point of dispute, will
actually be taken to an international court or
be resolved by United Nations action. The
Japanese claim to sovereignty over the Senkakus
is strong, and the burden of proof of ownership
would seem to fall on the Chinese.
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Geographic Boundaries of the Ryukyu Islands
Geographical boundaries of the Ryukyu Islands
administered by the United States Civil Administration,
Ryukyus (USCAR):
28?00'N
124?40'E; thence
24?00'N
122?00'E; thence
24?00'N
133?00'E; thence
27?00'N
131?50'E; thence
27?00'N
128?18'E; thence
28?00'N
128?18'E; thence
28?00'N
124?40'E.
NOTE: The curvilinear chain of islands, about 375
miles long, encompassed by the above boundaries,
are to revert to Japan in 1972 (See Map 500343).
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Pertinent Provisions of the 1958 Geneva
Convention on the Continental SH-eTT-_
The most widely accepted international
principles on the division of the continental
shelf are those developed by the 1958 Geneva
Convention on the Continental Shelf. That
convention determined the legal definition of
the continental shelf to be: "... the seabed
and subsoil of the submarine areas adjacent to
the coast but outside the area of the territorial
sea, to a depth of 200 meters, or beyond that
limit, to where the depth of the superjacent
waters admit of the exploitation of the said
areas." The Geneva definition applies to islands
as well as continental mainlands, and it also
recognizes the sovereign right of coastal states
to explore and exploit the natural resources of
their continental shelves.
1. Where the same continental
shelf is adjacent to the territories
of two or'more States whose coasts
are opposite each other, the boundary
of the continental shelf appertaining
to such States shall be determined
by agreement between them. In the
absence of agreement, and unless
another boundary line is justified
by special circumstances, the
boundary is the median line, every
point of which is equidistant from
the nearest points of the baselines
from which the breadth of the terri-
torial sea of each State is measured.
2. Where the same continental shelf
is adjacent to the territories of
two adjacent States, the boundary of
the continental shelf shall be
determined by agreement between them.
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In the absence of agreement, and
unless another boundary line is
justified by-special circumstances,,
the boundary shall be determined
by application of the principle of
equidistance from the nearest
points of the baselines from which
the breadth of the territorial sea
of each State is measured.
Recent international juridical practice has
been to ignore small islands situated near the
center of a semienclosed sea.* This appears to
be an application of the "special circumstances"
clause of paragraph 2 of Article 6 in order to
attain an equitable division of the continental
shelf.
The International Court of Justice, in the
1969 North Sea Case, held that delimitation of
national jurisdictions over the continental shelf
should be by negotiated agreement and that
equitable principles should be applied. But the
court held that the equidistant principle of the
Geneva Convention was not established as customary
international law and, moreover, was not binding
on a nonsignatory to the Continental. Sielf
Convention. Neither Japan, the People', Republic
of China, nor the Republic of Korea are signatories;
the Republic of China signed, but with reservations
(see paragraph 23 of text).
* Agreements between Iran and Saudi Arabia in
the division of the Persian Gulf and between
Italy and Yugoslavia in the division of the
Adriatic Sea disregarded small islands.
SECRET
Approved For Release 2007/05/02 : CIA-RDP79R00967A000300030008-8
 Approved For Release 2007/05/02 : CIA-RDP79R00967A000300030008-8
1:>s
EAST CH" ' SEA
BATHYIIIEETRY
0 ~15
50 100 Neu tical MIes
~~0 1~ Stahl. Miles
Shari hai
P'eng-chic Hsii
Chi-lung
CHEJU-DO;_-
Kitak ahu
JAPAN
Approved For Release 2007/05/02 : CIA-RDP79R00967AO00300030008-8
 Approved For Release 2007/05/02 : CIA-RDP79R00967A000300030008-8
EAST CHINA SEA
PETROLEUM
CONCESSIONS
PHILIPPINE SEA
170 _--'"v 500343 4-71 ... ...............,..,., izo
Approved For Release 2007/05/021: CIA-RDP79R00967AO00300030008-8
Japanese
Iy iw ~o ~~~~~s
-,a.. nrAy alle inalc~ban da
 Approved For Release 2007/05/02 : CIA-RDP79R00967A000300030008-8
Secret
Secret
Approved For Release 2007/05/02 : CIA-RDP79R00967AO00300030008-8