Pechino/Tokio - China has drilled a gas field in the East China Sea in violation of a June agreement, a Japanese newspaper reported on Sunday, a charge Beijing dismissed because it said the area does not lie in disputed waters.

The Japanese newspaper, the Sankei, said it learned on Saturday that China was drilling the Tianwaitian gas field and that Tokyo had lodged a complaint with Beijing.

Japanese government officials were not available for comment.

In June, both countries agreed to jointly develop gas fields and share profits in disputed areas of the East China Sea.

Beijing said, however, that developing the field was an “inherent sovereign right of China”, according to a statement on the Foreign Ministry’s website (www.mfa.gov.cn)

China may have already completed the development and could have entered the production stage, the Japanese daily said.

Sankei said that this was the first time that drilling by China was confirmed in the Tianwaitian field after the agreement in June.

It was not clear from the Foreign Ministry’s statement if China had unilaterally developed the field since June.

Estimated net known reserves in the disputed fields are a modest 92 million barrels of oil equivalent, but both countries have pursued the issue as there may be larger hidden reserves.

Chinese operator CNOOC Ltd said in April 2007 it had begun producing gas at the Tianwaitian field despite objections from Japan.

Gas output from the Tianwaitian field in 2007 was equivalent to a relatively modest 4 million cubic feet per day according to the state-controlled CNOOC. But an industry source said in June the actual output was running at 500,000 cubic metres a day (17.65 million cubic feet). (Reporting by Chikafumi Hodo and Kirby Chien; Editing by Alex Richardson)

Reuters, January 4, 2009

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