Japan and India have agreed to jointly develop natural gas resources near the Andaman islands, with initial surveys possible as early as this summer, the Nihon Keizai Shimbun said on Saturday. The move would allow Japan, which relies on imports for virtually all of its energy needs, to both diversify its energy sources and strengthen ties with India in an effort to counter China's growing influence in Asia, it said.
According to the Nihon Keizai Shimbun (Nikkei), the basic agreement was reached in a meeting on March 22 between Shinzo Abe, a senior official in Japan's ruling Liberal Democratic Party, and Indian Prime Minister Manmohan Singh.
Negotiations on the issue are set to take place prior to the late April visit to India of Japanese Prime Minister Junichiro Koizumi, with initial surveys possibly starting as early as this summer.
Officials at Japan's Trade Ministry, which oversees energy policy, were not available for comment on the report.
A private company would be chosen to oversee the actual production. The natural gas would be carried to India via a pipeline as well as exported to Japan, the Nikkei said.
Indonesia, Malaysia and Australia are currently Japan's major natural gas suppliers.
Competition for energy resources has intensified between Japan and China, which is stepping up efforts to develop resources to meet the demands of its booming economy.
The two nations have been engaged since last year in a dispute over natural gas exploration in the East China Sea.
Japan has repeatedly expressed concern that natural gas explorations being carried out by China are in or near Japan's exclusive economic zone.
Friction over energy has added fuel to a dispute over a group of islands known as the Senkakus in Japan and the Diaoyu islands in China, one of several issues that have put Japan-China relations under pressure recently.
Ties have been further strained by Koizumi's annual visits to Tokyo's Yasukuni Shrine, which honours several convicted war criminals along with other war dead.