The Wall Street Journal said Thursday CNOOC, China's largest offshore oil producer, started pumping gas ahead of schedule from an East China Sea field.

"We've not yet confirmed the validity of the report," Sugiyama said in Tokyo.

CNOOC confirmed development work at the Chunxiao field natural gas field is progressing as planned, but declined to comment on the report that it had started producing.

"All we can say is that the project is progressing normally," said Liu Xianzhong, an investor relations official for CNOOC. "Nothing has changed since we said in our annual strategic review that the fields are due for operation in the first half of this year."

ADVERTISEMENT

Liu said CNOOC has completed the production facilities and laid the pipelines, but declined to give details.

The Chunxiao field is one of four where Japan asked China to halt development, saying it will siphon gas from Japanese territory.

Asia's biggest oil consumers are quarreling over the areas because they disagree on their sea border. China claims its territory extends to the end of the continental shelf, while Japan says the sea border is the median line, or halfway between the countries' shores. CNOOC began producing gas from the Chunxiao field on January 28, after a company spokesman had said output was to start later in the first half of this year, the newspaper said. The start of production was kept secret to keep it from undermining talks to resolve an ownership dispute, it said.

Japan is still waiting for a reply to a previous request to China for information about the area CNOOC is developing, Sugiyama said.

Japan rejected a Chinese proposal for joint development of two areas near the four fields already under development by China after a fourth-round of talks ended in Beijing on March 7. The two countries have yet to decide on a date for further talks, Sugiyama said.

BLOOMBERG, REUTERS