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The Uncertain Status of the Korea-Japan Joint Development Agreement of the

Continental Shelf and Its Prospects

Article in Asia-Pacific Journal of Ocean Law and Policy · December 2022

DOI: 10.1163/24519391-07020003

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 Asia-Pacific Journal of Ocean Law and Policy
7 (2022) 197–215

The Uncertain Status of the Korea-Japan Joint

Development Agreement of the Continental Shelf
and Its Prospects

Suk Kyoon Kim

Professor, Department of Coast Guard Studies, Hanseo University,
Seosan, Korea
[email protected]

Abstract

As the expiration date of the Japan-Korea joint development of the continental shelf in
the East China Sea comes closer, the joint development agreement is becoming a hot
issue between Korea and Japan. The Joint Development Zone (jdz), established under
the joint development agreement, is set to expire in 2028 unless the two countries
agree otherwise. Despite not having any commercially significant discovery of oil and
gas in the jdz, it has served as a provisional arrangement to manage peacefully the
disputed continental shelf in the tri-junction where China also claims jurisdiction.
Given its significant role in the peaceful management of overlapping marine resources
and jurisdiction claims over decades, the two countries need to engage in negotiations
to come up with a solution to the pending issues concerning the development of the
jdz. The jdz area has the potential to become a flashpoint of conflicts in the strained
relations between the two countries, if the agreement expires without any provisional
or permanent arrangements.

Keywords

joint development agreement – joint development zone – Korea – Japan – continental

shelf – East China Sea

© Koninklijke Brill NV, Leiden, 2022 | doi:10.1163/24519391-07020003

198 kim

1 Introduction

As the expiration of the Japan-Korea joint development of the continental

shelf in the East China Sea comes closer, the joint development agreement is
becoming a hot issue between Korea and Japan. The Joint Development Zone
(jdz), established under the joint development agreement between the two
countries, is set to expire in 2028, in accordance with a 50-year duration period
since its entry into force in 1978, unless the two countries agree otherwise.
Regardless of no commercially significant discovery of oil and gas in the jdz,
it has served as a provisional arrangement to peacefully manage the disputed
continental shelf in the tri-junction where China also claims its jurisdiction.
With a few years away from the expiration of the joint development agree-
ment, Korea and Japan appear to have disparate views of the further develop-
ment of the jdz. Furthermore, it is not clear whether the two countries will
terminate or extend the joint development agreement at the end of the dura-
tion of the agreement. Pursuant to the joint agreement, a State party which
is willing to terminate the agreement is required to give three year’s written
notice to the other State party and may terminate anytime thereafter when the
duration date expires.
The joint development agreement in the absence of continental shelf
boundaries in three States’ overlapping claim waters is inherently intercon-
nected to maritime jurisdiction and other maritime issues, such as maritime
security and fisheries.
This article explores aspects of the Korea-Japan joint development of the
continental shelf agreement in terms of its background, creation, implemen-
tation, and prospects. This article also examines the positions of Korea and
Japan with regard to the joint development agreement.

2 The 1968 UN Survey Report

A report of geophysical survey in the Yellow Sea and the East China Sea, con-
ducted by the UN Economic Commission for Asia and the Far East (ECAFE),
presently known as the UN Economic and Social Commission for Asia and the
Pacific (escap) – a parent body of the Coordinating Committee for Geoscience
Programmes in East and Southeast Asia (ccop) – made a tremendous impact
on international relations in East Asia. The undertaking of the survey was
actually led by the U.S. government with participation from Japan, Korea, and
Taiwan.

Asia-Pacific Journal of Ocean Law and Policy 7 (2022) 197–215

the uncertain status of the korea-japan JDA 199

The report made public in early 1969 revealed that “a probability exists that
the continental shelf between Taiwan and Japan may be one of the most pro-
lific oil reservoirs in the world, to the extent of being close to the one existing
in the Persian Gulf” and that “a second most favorable area for oil and gas is
beneath the Yellow Sea.”1 The scientists added that “further detailed seismic
studies were required in the general sedimentary basins in order to obtain
more definitive data on the shapes and extents of these small structures.”2 The
1969 report was reconfirmed later by independent Japanese as well as Chinese
researches.3
These survey results prompted the coastal States of East Asia, including
China, Japan, Korea and Taiwan, to hastily claim their own sovereign rights
over the supposedly oil-rich continental shelf, ushering them into a so-called
“sea-bed oil war.” Their first and foremost attempt to this end was to establish
sea-bed zones on the high seas. By late September 1970, the three coastal States
– Japan, Korea and Taiwan – unilaterally declared their own sea-bed mining
zones in the East China Sea and the Yellow Sea, which are 17 zones in total.
The problem is that most of their claims overlapped, with only four of the 17
zones uncontested. As part of bolstering their claims, they rushed to sign oil
concession contracts with Western oil companies. They hoped that their uni-
lateral claims prior to maritime boundary delimitation between the coastal
States would entitle the claimant with vested rights to the shelf in question
and, consequently strengthen its bargaining position.4

3 Creation of a Joint Development Scheme Between Japan and Korea

In the absence of maritime boundary delimitation, the coastal States of Japan,

Korea and Taiwan sought to agree on a scheme to jointly develop oil, pending
their claims over maritime boundaries. While these three coastal States were
engaged in a joint development scheme, China had remained silent. However,

1 Choon-ho Park, East Asia and the Law of the Sea (Seoul National University Press, Seoul,
1983), p. 127.
2 Ibid.
3 Zhiguo Gao and Wu Jilu, ‘Key Issues in the East China Sea: A Status Report and
Recommended Approaches’, in Selig Harrison, (Ed.), Seabed Petroleum in Northeast Asia:
Conflict or Cooperation? (Washington D.C., Woodrow Wilson International Center for
Scholars, 2005), cited by Monika Chansoria, 1969 Report by UN Economic Commission for
Asia and the Far East: A Turning Point in the Historical Debate over Senkaku Islands, 2(3)
Japan Review (2018).
4 Park, supra note 1 at 129.

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China abruptly lodged strong protests in December 1970 over the three coastal
States’ scheme for joint development, claiming its own sovereignty over the
continental shelf where the joint development was to take place. China’s pro-
tests were believed to come out in consideration of the circumstances: (i) the
1969 survey result was reconfirmed by independent Japanese and Chinese
researches; and (ii) its claim to the ownership of the Senkaku (Diaoyu) islands
would be prejudiced by the Japanese claim of the continental shelf.
In the aftermath of Chinese protests, exploration activities grinded to a halt
mainly because American concessionaires had withdrawn out of fear that they
would be entangled in maritime disputes. Furthermore, Taiwan dropped out
of the joint development scheme due to its particular political relationships
with China. As a result, the three coastal States’ scheme for a trilateral joint
development of oil was not made possible. Japan and Korea, which were hun-
gry for oil, however, were determined to push forward a bilateral joint develop-
ment scheme. While in negotiations late in 1972, the first global oil crisis served
as a decisive stimulus in concluding a joint development agreement between
the two countries, which were in bitter relations out of the Japanese 36 years’
rule over Korea (1910–1945).
The 1969 International Court of Justice’s (icj) ruling based on the natural
prolongation of land territory principle in the 1969 North Sea Continental Self
cases also served as a contributing factor to making the joint development
scheme. Prior to the ruling, the 1958 Geneva Convention on the Continental
Shelf5 providing for the median line principle “in the absence of agreement”
or “special circumstances” was a commonly recognized principle. The icj
came up with the principle of the natural prolongation of the land territory or
domain or land sovereignty of the coastal State into and under the high seas.
According to the icj’s ruling, the rights of the coastal State to its continental
shelf are derived from its sovereignty over the land domain, and the delimita-
tion of the continental shelf is carried out on the basis of geology or geography
of the seabed which is a continuation of the land territory, rather than the
notion of proximity.6

5 1958 Geneva Convention on the Continental Shelf, Art. 6(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
territorial sea of each State is measured.” [emphasis supplied].
6 North Sea Continental Shelf, Judgement, I.C.J. Reports, 1969, p. 31, paras. 43–44.

Asia-Pacific Journal of Ocean Law and Policy 7 (2022) 197–215

the uncertain status of the korea-japan JDA 201

The Korean government granted concessions for the exploration of the con-
tinental shelf in the Yellow Sea and East China Sea to several major foreign oil
companies in accordance with the Submarine Resources Development Law
enacted in 1969. Japan also granted concessions to Japanese oil companies in
the southernmost part of those concession areas extended beyond a hypothet-
ical median line with Korea.7 Korea applied the natural prolongation of land
territory principle in the overlapping continental shelf, as opposed to Japan
which relied on the median line principle.
With dispute over the overlapping continental shelf arising, the two coun-
tries held three consultations between 1970 and 1972 for the delimitation of the
continental shelf. Japan proposed two solutions to the dispute, for which one
is through conciliation and the other is to refer the matter to the icj.8 Finally,
they agreed on a joint development scheme at the ministerial level meeting.
After nine expert meetings, they adopted a draft agreement to jointly develop
the overlapping continental shelf. Japan and Korea signed a historical agree-
ment in 1974, titled ‘The Agreement between the Republic of Korea and Japan
Concerning the Joint Development of the Southern Part of the Continental
Shelf Adjacent to the two Countries.’9
Korea, which was eager to become an oil-producing country, promptly
ratified the agreement in December 1974. However, its entry into force was
not until June 1978 when the Japanese government finally ratified it. Japan’s
delayed ratification was due to political and procedural reasons. Allegedly
there were objections to the agreement, claiming that Japan made greater con-
cessions to Korea for the joint development scheme. For legislative matters, it
was required to legislate a new sea-bed mining law since the land-based min-
ing law could not afford to apply mutatis mutandis to sea-bed mining due to its
unsuitability to the marine circumstances.
In order to address such a legal problem, the Japanese government pro-
posed a bill for ad hoc sea-bed mining to the parliament for its enactment,
along with the joint development agreement for its approval. Recognizing the
objections to the joint development agreement, the Japanese parliament was
slow in deliberating the bill. The agreement was approved in June 1977, but

7 Masahiro Miyoshi, The Joint Development of Offshore Oil and Gas in Relation to Maritime
Boundary Delimitation, 2(5) Maritime Briefing (1999), p.11.
8 Korea Maritime Institute (kmi), “Analysis on Countermeasures to Resuming the Korea-
Japan Joint Continental Shelf Development,” p. 18.
9 “Japan and Republic of Korea Agreement Concerning Joint Development of the Southern
Part of the Continental Shelf Adjacent to the Two Countries,” unts, No. 19778, available at
https://treaties.un.org/doc/Publication/unts/Volume%201225/volume-1225-I-19778-English.
pdf.

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the ad hoc bill for the sea-bed mining finally legislated into law in June 1978.
Subsequently the agreement was ratified in the same year. It took four years
until the agreement became effective in 1978.

4 Principal Provisions of the Joint Development Agreement

The joint development agreement stipulates terms and procedures to manage

joint development in the overlapping claim areas. The key provisions are con-
cerned with the establishment of the joint development zone and conditions
for its exploration and exploitation. The principal regimes of the agreement
are outlined below.

4.1 Establishment of a Joint Development Zone

In accordance with the agreement, a joint development zone (jdz) was cre-
ated in the overlapping claim area between the two countries. The jdz, which
is 24,092 square miles in width, is an area of joint development bounded by
20 straight lines connecting the outer limit of the two countries’ claims to the
continental shelf.10 The jdz is divided into nine subdivisions, each of which is
to be explored and exploited by concessionaries of both countries.11 The sub-
zones of the jdz are identified in the appendix.

4.2 Authorization of Concessionaries and the Operation Agreement

Under the agreement, each party is required to authorize one or more conces-
sionaires to explore and exploit natural resources in each subzone within three
months after entry into force the agreement.12 Concessionaries from both par-
ties are to conclude an operating agreement to undertake joint exploration
and exploitation activities, which includes: details relating to the sharing of
natural resources and expenses; designation of operator; treatment of sole risk
operations; adjustment of fisheries; settlement of disputes.13

4.3 Equal Rights and Obligations

Concessionaries of both parties are entitled to the right to an equal share of
natural resources from the jdz and are to share expenses incurred in equal
proportions.14

10 The Japan-Korea Joint Development Agreement, Art. 2(1).

11 Ibid., Art. 3(1).
12 Ibid., Art. 4(1).
13 Ibid., Art. 5(1).
14 Ibid., Art. 9(1) & (2).

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4.4 Operation of Exploration and Exploitation Rights

The duration of exploration rights is 8 years from the entry into force of the
operating agreement.15 The duration of exploitation rights is 30 years since the
establishment of its rights. When a commercial discovery of natural resources
is made during the exploration period, the concessionaries may apply to the
respective parties for exploitation rights and the State parties are to approve
the application.16 The concessionaries of both State parties are required to drill
a certain number of wells, the minimum of which is two in the first 3-year
period, the following 3-year period and the remaining 2-year period.17

4.5 Sole Risk Operations

Either State party is allowed to cancel exploration or exploitation right of its
concessionaire after consultations with the other State party if the concession-
aire does not carry out the obligations under the agreements of joint devel-
opment and its operation.18 When the right of a concessionaire is unilaterally
released, the remaining concessionaire in the subzone may carry out explora-
tion and exploitation rights under the terms of “sole risk operations clauses”
and other relevant provisions of the operating agreement.19

4.6 Taxes and Other Charges

Each State party is entitled to impose taxes or other charges upon its conces-
sionaries with respect to: exploration or exploitation activities in the jdz; fixed
assets in the jdz necessary carrying out such activities; and subzones with
respect to which such concessionaires authorized.20
A State party is not authorized to impose taxes or other charges upon con-
cessionaries of the other party with respect to the abovementioned activities
or objects.21

4.7 Unitization
What if oil or gas deposits straddling the sub-zones of a jdz or the bounda-
ries of the jdz are discovered after a joint development zone is agreed? Unless
there is agreement on the straddling resources, it is highly likely that this new

15 Ibid., Art. 10(2).

16 Ibid., Art. 10(4.1).
17 Ibid., Art. 11(1).
18 Ibid., Art. 14.
19 Ibid., Art. 15.
20 Ibid., Art. 17(2).
21 Ibid., Art. 17(1).

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discovery would give rise to dispute with respect to contractual problems

between concessionaires of the sub-zones or the ownership of discovered
resources between the State parties. In order to prevent such possible disputes
in relation to potential straddling resources, it is necessary to provide for a uni-
tization clause which provides a consultation obligation of State parties as to
the effective ways of exploiting such resources.
The first such arrangement was conducted between Norway and the United
Kingdom in 1976 concerning the Frigg field straddling their maritime bound-
ary in the North Sea, and most unitization agreements can be found in the
North Sea. However, more recently, Nigeria and Equatorial Guinea completed
a unitization agreement for the Zafiro-Ekanga field in 2002.
The 1974 Korea/Japan Agreement also provides for unitization that in the
event that any single geological structure of field of natural resources extends
across any of lines of the jdz or lines bounding the sub-zones of the jdz, con-
cessionaires need to seek to reach agreement as to the most effective method
of exploiting such structure or field.22

4.8 Establishment of the Joint Commission

Under the agreement, the Korea-Japan Joint Commission was to be estab-
lished to consult matters with regard to its implementation.23 The commis-
sion, composed of two national sections, consists of two members appointed
by the respective State parties.24 The commission is required to meet at least
once each year and whenever requested by either national section.25
The commission performs the functions: (a) to review the operation of
the agreement and deliberate on and recommend to the parties measures to
improve the operation of the agreement; (b) to receive annual technical and
financial reports of concessionaries; (c) to recommend the State parties to set-
tle disputes; (d) to observe operations of operators and installations and other
facilities for exploration or exploitation of natural resources; (e) to examine
problems, including those relating to the application of laws and regulations
of State parties; (f) to receive notices of the promulgation of the laws and reg-
ulations concerned with the exploration and exploitation of natural resources
in the jdz; and (g) to discuss any other matter relating to the implementation
of the agreement.

22 Ibid., Art. 23.

23 Ibid., Art. 24(1 & 2).
24 Ibid., Art. 24(2).
25 Ibid., Art. 24(2).

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4.9 Dispute Settlement

Any dispute between the State parties regarding the interpretation and imple-
mentation of the agreement is to be settled through diplomatic channel.26 If
the dispute fails to be settled through diplomatic channel, it will be referred
to an arbitration board composed of three arbitrators, two of whom are
appointed by the State parties and one of whom is agreed upon by the two
parties or chosen by a third country agreed upon by the parties.27 If the arbi-
trators appointed by each State party fail to agree upon a third arbitrator or a
third country, the State parties are required to request the president of the icj
to appoint the arbitrator who is not a national of any party.28

4.10 Maritime Boundary Delimitation

Nothing in the agreement is to be regarded as determining the question of
sovereignty rights over all or any portion of the Joint Development Zone or
prejudicing the positions of the respective parties with respect to the delimita-
tion of the continental shelf.

4.11 Duration of the Agreement

The agreement is to remain in force for 50 years and continue in force there-
after until terminated by each State party. After the expiration of the 50-year
period, either party may, by giving three years’ written notice to the other party,
terminate the agreement at the end of the first 50-year period or at any time
thereafter.29 Despite these provisions, the State parties may revise or terminate
the agreement by agreement when natural resources are no longer econom-
ically exploitable in the jdz.30 If no agreement is reached as to the revision
or termination of the agreement, the agreement is to remain in force for the
50-year period.31

5 Implementation of the Joint Development Agreement

The implementation of the joint development agreement can be largely classi-

fied into three phases since its entry into force.

26 Ibid., Art. 26(1).

27 Ibid., Art. 26(2).
28 Ibid., Art. 26(3).
29 Ibid., Art. 31(3).
30 Ibid., Art. 31(4).
31 Ibid.

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5.1 1st Exploration Period

The first exploration period was between 1979 and 1987. The two countries
divided the jdz into 9 subdivision zones in the period. Pursuant to the agree-
ment, Korea and Japan authorized concessionaires, as described in Table 1. For
Korea, it authorized Texaco concession to exploit and explore natural resources
in subdivision zones 2, 3, 4, 5, and 6, and koam for subdivision zones 1, 7, 8, and
9. For Japan, it authorized Nippon Oil as a concessionaire for subdivision zones
2, 3, 4, 5, 6 and 7, and Teikoku Oil for subdivision zone 8. It did not authorize a
concession in subdivision zones 1 and 9.
As Texaco released its concession in 1985, the Korean government author-
ized the Korea Petroleum Development Oil Company (pedco) and Kyungin
Energy as replacements. In 1986, as koam and Teikoku Oil released their con-
cession, Korea and Japan did not authorize concession for subdivision zone 8.
In the first period, the two countries drilled 11 exploratory holes in subdivision
zones 1, 7, 8 and 9. However, there were two gas shows in subdivision zones 5
and 7, both of which turned out to be not commercially significant.32

table 1 Status of Concessionaries in the First Exploration Period

First Half Second Half

Subdivision Subdivision
Korea Japan Korea Japan
zone zone

1 koam Non-authorization 1 koam Non-authorization

2 Texaco Nippon Oil 2 pedco and Nippon Oil
3 Texaco Nippon Oil 3 Kyungin
4 Texaco Nippon Oil 4 Energy
5 Texaco Nippon Oil 5
6 Texaco Nippon Oil 6
7 koam Nippon Oil 7 koam Nippon Oil
8 koam Teikoku Oil 8 koam Teikoku Oil
(release of (release of conces-
concessionary sionary in 1986)
in 1986)
9 koam Non-authorization 9 koam Non-authorization
source: adapted from kmi, “analysis on countermeasures to resuming the
korea-japan joint continental shelf development”

32 kmi, supra note 8.

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the uncertain status of the korea-japan JDA 207

5.2 2nd Exploration Period

The second exploration period started in 1991 and ended in 1993 and the two
countries agreed to re-divide 9 subdivision zones into 6 zones. In addition,
they agreed to reduce the number of drilling holes required to 7 in order to
facilitate concessionaries’ application.33 In 1989, the Korean government
authorized British Petroleum (bp) and pedco as concessionaries in subdivi-
sion zones 2 and 4. Japan authorized the Nippon Oil Exploration Company as
the concessionaire in 1991.34 An operating agreement was made among these
concessionaries which entered into force in September 1991. The three conces-
sionaries undertook a 2-year geological and geophysical research survey using
the data from collected in the first exploration period.35 Based on the survey
results, they concluded that there was no commercially exploitable oil and gas
in subdivision zones 2 and 4, given the low oil prices at the time.36
They released the subdivision zones in September 1993, 2 years after the
start of the operating agreement.37 However, the two countries agreed that it
was not desirable to terminate the joint development agreement. They also
agreed that they would reengage in development by agreement when new
concessionaries are available, with the improvement of the development situ-
ation, such as increase in oil prices.38

5.3 The 3rd Exploration Period

In the 2000s, oil was found in the Pinghu deposit located in the Jeju basin
where the Japan Korea Joint Development Zone belongs. With a higher prob-
ability of oil deposits in the jdz, the Korea National Oil Corporation (knoc)
and Shell jointly reviewed the exploration data.39 As they concluded a higher
probability of oil deposits, the knoc proposed a joint survey.40 At the gov-
ernment level, Japan and Korea signed a memorandum of understanding for
a joint exploration for oil and gas. Under the jdz agreement, the Korean and
Japanese governments designated both the knoc and the Japan National Oil
Corporation as operators for each.41

33 Ibid.
34 Jee-hyun Choi, Korea-Japan JDZ to End in Deadlock?: The Potential for Unilateral Korean
Exploration and Exploitation, 51(2) Ocean Development and International Law 165–174
(2020).
35 Ibid.
36 Ibid.
37 Ibid.
38 National Archive, CA001240, cited in Choi, supra note 34.
39 knoc, “25 Years of knoc History,” cited in kmi, supra note 8.
40 Ibid.
41 Ibid.

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In August 2002, the two public entities from both countries signed a Joint
Seismic Survey Operating Arrangement (jsoa) and agreed to conduct a
three-dimensional (3D) seismic survey in an identified promising area.42 In
accordance with the jsoa, the two sides conducted a joint survey in subdivi-
sion zone 2, obtained 3D survey data, did computer processing, and analyzed
the results.43 In March 2004, the knoc and the Japan National Oil Corporation
(jnoc) held an expert meeting at which they concluded that there are five
prospects and several leads and furthermore 36 million tons of oil deposits are
likely to exist.44 However, in terms of profitability, Japan and Korea have differ-
ent views. Japan unilaterally declared the suspension of exploration activities
on account of low economic prospects.45
Between 2004 and 2010, Japan and Korea engaged in a joint research, based
on the results of the previous surveys. For Korea, the knoc was a participating
party, but private companies were for Japan. The conclusions of the two coun-
tries after joint researches were quite disparate. In March 2010, Japan declared
its withdrawal from joint researches on account of low probability of oil depos-
its, as opposed to Korea which concluded positive prospects for them.46

5.4 Developments in Recent Years

Since 2010, there have been no measures from Japan for the implementation
of the jdz agreement. In the period between 2009 and 2017, Korea authorized
the knoc as a concessionaire of subdivision zone 1, but Japan has not author-
ized a concessionaire in any subdivision zones.47 While Japan has remained
negative toward the further development of the jdz, Korea has insisted that
the two countries should reengage in the oil development of the jdz, with
highly advanced oil exploration technologies before the expiration of the jdz
agreement.
To this end, in January 2020, the Korean government declared its resump-
tion of exploration and exploitation in the jdz and authorized the knoc as a
concessionaire in subdivision zones 2 and 4.48 Korea has informed Japan of its
decision and requested Japan to authorize its concessionaire(s), pursuant to
the provision of the jdz agreement.49

42 Choi, supra note 34.

43 kmi, supra note 8.
44 Ibid.
45 Ibid.
46 Ibid.
47 Choi, supra note 34.
48 “Resumption of Development in 34 Years… The Last Bid,”19 March 2020, KBS News.
49 Ibid.

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the uncertain status of the korea-japan JDA 209

6 Issues at Stake

As examined above, there exist a number of issues with respect to the imple-
mentation of the jdz agreement. This section examines the issues arising from
its implementation and prospects for the joint development of the jdz from a
legal, political and practical perspective as well as the positions of Japan and
Korea thereof.

6.1 Estimation of Oil and Gas Reserves

The most notable disparity between Korea and Japan relates to the estima-
tion of commercially significant oil and gas reserves. The jdz arrangement was
spurred by a 1968 UN seismic survey report, concluding that the East China Sea
and the Yellow Sea contain immensely promising oil reserves, equivalent to
that of the Persian Gulf. China also put forward similar estimates in the middle
of disputes with Japan over the development of the continental shelf in the
East China Sea. According to Chinese estimates, based on the known geologi-
cal facts, potential East China Sea gas reserves on the entire continental shelf
range from 175 trillion to 210 trillion cubic feet in volume (Saudi Arabia has
“proven and probable” gas reserves of 21.9 trillion cubic feet).50 Foreign esti-
mates of potential oil reserves on the same continental shelf have gone as high
as 100 billion barrels (Saudi Arabia has “proven and probable” oil reserves of
261.7 billion barrels).51
Against these estimates, however, Japan has concluded that the probabil-
ity of oil reserves which are commercially significant is very low, based on
its assessment of the data obtained from seismic surveys. In September 1993,
Japan invoked “a low oil price for commercial exploitation” for its release of the
right to authorize concessionaires in its entirety, while “recognizing a certain
extent of value to develop.”52 Japan has been negative toward the development
of the jdz since the completion of the 2nd exploration activity and has not
responded to Korea’s claims to resume exploration and exploitation in the jdz
afterward.
However, Korea has held a positive position toward the probability of oil
deposits in the jdz, although it is not exactly certain about its assessment of
economic feasibility. Korea has insisted on the resumption of exploration and

50 Selig S. Harrison, Seabed Petroleum in Northeast Asia: Conflict or Cooperation? (Woodrow

Wilson International Center for Scholars, Washington, D.C).
51 Ibid.
52 kmi, supra note 8.

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exploitation in subdivision zones 2 and 4. Korea claims that there have been
only 7 exploratory drillings in the 1980s and that the 3D survey in 2004 was
undertaken in parts which covered only 503 square kilometers, and thus there
are still many areas that need to be explored.53
The rationale for Korea’s position are outlined: (i) there is a higher possi-
bility of oil reserves in subdivision zones 2 and 4 on the grounds that they are
within the same geological structure with Longjin and Pinghu deposits in the
immediate vicinity, where China has been producing gas and oil; (ii) low eco-
nomic feasibility is no longer problem because oil prices at present are higher
than in the 1990s; and (iii) there have been substantial technological advances
in oil exploration and exploitation over the decades.

6.2 Obligation of Joint Development

The jdz agreement between Japan and Korea is an international arrangement
designed to jointly develop natural resources in the overlapping continen-
tal shelf. It aims to ensure mutual interest by jointly developing petroleum
resources in the disputed continental area.54 For the purpose, Article 3 of the
agreement provides that “The Joint Development Zone… shall be explored and
exploited by concessionaires of both Parties.” Under the agreement, State par-
ties are obliged to jointly explore and exploit the jdz. Allegedly, the obligation
of joint development was a reflection of Korea’s intention to prevent Japan
from unilaterally developing the continental shelf with advanced technolo-
gies.55 In accordance with the provision of joint development, any unilateral
exploration and one party’s exploration without the other party’s consent vio-
lates the agreement. Under the terms, Korea’s recent move to resume explo-
ration and exploitation in the jdz, with the authorization of the knoc as a
concessionaire and without Japan’s corresponding authorization, is likely to be
a violation of the jdz agreement.
In this regard, some from the Korean side argue that Japan’s refusal to
authorize concessionaries violates an obligation under Article 4 stating that
“Each party shall authorize one or more concessionaries with respect to each
subzone….”56 They also argue that Japan has violated the drilling obligation
in Article 11(1) stating that “Concessionaires of both Parties shall be required
to drill a certain number of wells….”57 Furthermore, they claim that Japan’s

53 Ibid.
54 The Japan-Korea Joint Development Agreement, Preamble.
55 kbs News, supra note 48.
56 kmi, supra note 8.
57 Ibid.

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the uncertain status of the korea-japan JDA 211

possible argument that it is not able to authorize concessionaires since no pri-

vate company has applied for concession on account of the lack of economic
feasibility does not constitute a fundamental circumstantial change of the
terms under the Vienna Convention on the Law of Treaties.58

6.3 Dispute Settlement

Japan has not been corresponding to Korea’s claim to resume exploration and
exploitation in the jdz. The problem could be referred to the dispute settle-
ment process unless settled through consultations between the State parties.
Under the agreement, disputes with regard to the interpretation and imple-
mentation of the agreement can be settled by the proceedings which include:
(i) recommendation of the joint commission; (ii) consultation through diplo-
matic channels; and (iii) decision of an arbitration board. Even if Korea and
Japan have divergent views of the probability of oil deposits in the jdz and the
economic feasibility thereof, they have not been engaged in a dispute at the
State party level. Although Korea has authorized a concessionaire to resume
exploration and exploitation in the jdz, it has not unilaterally engaged in
such activities in violation of the jdz agreement. Korea has called on Japan
to authorize a concessionaire in response to its authorization. Even if Korea
claims that Japan has violated an obligation to authorize one or more conces-
sionaries, Korea’s legal basis appears to be weak, if Japan continues to invoke
the absence of applicants on account of low economic feasibility.

6.4 Duration of the Joint Development Agreement

The agreement is to continue for 50 years since the date of its entry into force,
unless State parties agree to terminate earlier for lack of economically exploit-
able natural resources. As Korea intends to reengage in the development of
the jdz, there is little possibility that the agreement will be terminated earlier
than the 50-year period by agreement. Thus, the agreement is likely to remain
in force until 2028. Under the agreement, a State party may terminate by giving
three-years’ written notice at the expiration of a 50-year period or any time
thereafter.

58 The Vienna Convention on the Law of Treaties provides the terms for supervening
impossibility of performance (Art. 61) as “the permanent disappearance or destruction of
an object indispensable for the execution of the treaty” as well as fundamental change of
circumstances as “fundamental change of circumstances which has occurred with regard
to those existing at the time of the conclusion of a treaty” (Art. 62).

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212 kim

6.5 Maritime Boundary Delimitation

The joint development arrangement of the jdz was devised to prevent dispute
over the boundary delimitation of the continental shelf in the overlapping
claim areas. By a non-prejudicing clause, the agreement makes it clear that
it does not affect the position of each party with regard to the delimitation of
the continental shelf. While the agreement has been in force, the issue of the
delimitation of the continental shelf between Japan and Korea has continued
to simmer under the surface of the two States’ relationship. When the agree-
ment is terminated without a prior delimitation of the continental shelf, how-
ever, the dispute over the continental shelf boundary is likely to resurface and
to be an extremely contentious issue between the two countries.

7 Assessments of and Prospects for the Joint Development Scheme

7.1 Assessments
As noted above, the joint development of the jdz has been in deadlock for
years. In the wake of China’s gas and oil developments in the East China Sea in
recent years, Korea has endeavored to reengage in the development of the jdz
with Japan. However, as discussed earlier, Japan has maintained its negative
position toward the resumption of exploration and exploitation, invoking low
economic feasibility of oil deposits in the jdz, and accordingly not shown any
sign that it will follow Korea’s lead.
Despite no discovery of commercially exploitable oil and gas yet, the jdz
agreement has played a vital role in addressing dispute arising from the absence
of a maritime boundary delimitation between Japan and Korea for decades. Its
role in and contribution to the peaceful management of the disputed conti-
nental shelf between the two countries, which have been in strained political
relationships, should be highly regarded.
The agreement represents a venture model for jointly developing oil and
gas in overlapping claim areas. Under the model, each State party is entitled
to nominate its own concessionaries to undertake development activities.
Having each nominated one or more concessionaries to develop a specific part
of the zone, the State parties are required to ensure that their concessionar-
ies enter into a joint operating agreement with each other. This form of joint
development structure allows each State party to grant development contracts
under its own legislative framework and development regime. The recipients
(contractors) thereof from each state party must enter into joint operating
agreements between/among them to proceed with development operations in

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the uncertain status of the korea-japan JDA 213

the designated zone.59 The concessionaires will have to divide the petroleum
recovered by the joint venture in the shares that have been agreed upon by the
states. The arrangement sounds quite simple. However, the question arises as
to which laws and regulations – both in relation to petroleum activities and
otherwise – will apply to the zone.

7.2 Prospects
As of this writing (2022), the agreement’s expiration date is six years away.
At that point, termination without first creating further arrangements to
peacefully manage the disputed shelf will likely give rise to new conflicts
between the two countries. However, the two sides are not expected to reach
an agreement to the boundary delimitation of the exclusive economic zone
and the continental shelf, as they invoke disparate principles. Their submis-
sions to the Commission on the Limits of the Continental Shelf regarding
their claims may well demonstrate the differences of their positions. Some
Korean experts doubt that Japan won’t explore and exploit potential reserves
the jdz in response to Korea’s move before the agreement expires,60 and that
Japan instead intends to unilaterally develop the jdz after its expiration. Their
suspicion may stem from the rulings of the International Court of Justice in
maritime boundary delimitation cases, invoking the principle of equidistance
from the coasts of States in dispute where the coasts of the States are less
than 400 miles. With the adoption of unclos, which emphasizes an “equi-
table solution” of boundary delimitation, the principle of the natural pro-
longation of land territory has receded, although unclos incorporated the
land based entitlement of continental shelf into the definition of the con-
tinental shelf.61 If the equidistance criterion is applied after the agreement
expires, large portions of the present jdz would fall within the jurisdiction of
Japan.

59 Hazel Fox, ‘Joint Development and the Institute’s Model Agreement: Summary of
Conference Discussion and the Research Team’s Response’, in Hazel Fox (Ed.), Joint
Development of Offshore Oil and Gas (British Institute of International and Comparative
Law, London, 1990).
60 ‘The 7th Mining Block, The Last Game between Korea and Japan’, 21 March 2020, Korean
Broadcasting System (kbs); Some Korean experts on the program interviewed that
“Japan is not likely to respond to Korea’s calling for the resumption of exploitation and
exploration in the jdz.”
61 unclos, Art. 76.

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214 kim

8 Conclusion

While Korea has been eager to reengage in exploration activities, calling for
Japan’s participation, Japan has not shown its willingness. As the expiration
of the agreement comes closer, at this point, it is not easy to figure out Japan’s
intent in relation to the delimitation of continental shelf. Their disparate posi-
tions are inherently linked to the boundary delimitation in the jdz area. The
jdz is claimed by China, Japan and Korea. In case the joint development agree-
ment is terminated without an arrangement to manage the disputed area, the
jdz area is likely to become a source of intense maritime dispute.
In conclusion, I put forward some suggestions for provisional arrangements
to prevent or mitigate negative impacts that could be incurred by the termina-
tion of the joint development agreement without any follow-up measures to
address disputes in the tri-junctional claim area.
First, Japan and Korea need to agree to extend the duration of the joint
development agreement, regardless of oil and gas reserves in the jdz. The
extension of the joint development agreement, varying with the agreed period
and depending on the delimitation of the continental shelf, will be a way to
peacefully manage the disputed area within the framework of the existing
agreement. The primary objective of this option is to maintain the status quo
in the disputed area, given that the joint development agreement has effec-
tively worked as a mechanism that has mitigated and moderately managed the
disputed continental shelf claims.
Second, the two countries need to decide to reengage in the exploration
and exploitation activity, being mindful of the extension of the agreement
unless they are able to complete before it expires. As discussed above, the
Korean government requests Japan to resume the exploration activity with
advanced seismic technology in the areas of higher probability of oil and gas
reserves.
Third, Korea, Japan and China agree to conduct a trilateral joint develop-
ment in the jdz area, given that China is another claimant to the jdz area
and is expected to claim more strongly its right over the continental shelf in
the jdz after the expiration of the Japan-Korea joint development agreement.
In the overlapping claimed continental shelf by the three countries, in which
its boundary delimitation is not expected to be negotiated in the near future,
this option is likely to be a way to use sea-bed resources in the disputed area
in a collaborative way among the disputants as well as peacefully manage the
dispute.
Under the circumstances, the two countries need to engage in negotiations
to come up with a solution to the pending issues concerning the development

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 the uncertain status of the korea-japan JDA 215

of the jdz and the delimitation of the continental shelf. What is apparent is
that the jdz area has the potential to become another source of conflicts in the
strained relations between the two countries, if the agreement expires without
any provisional or permanent arrangements.

Asia-Pacific Journal of Ocean Law and Policy 7 (2022) 197–215

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