China Begins Production in Disputed Border Zone

China's state-owned CNOOC Ltd. has begun pumping natural gas ahead of schedule from a field it shares with Japan, sources said.

Cnooc did not announce that pumping began at the Chunxiao field Jan. 28 because it did not want to undermine sensitive talks with Japan at the time on the longstanding border dispute, a source said.

At issue are energy deposits in the Xihu Trench, a 14,000-square-mile undersea natural gas field located east of Shanghai in an economic zone claimed by both China and Japan. Japan accused China last April of drilling in the trench in areas under Japanese control in preparation for pumping gas last summer -- allegations that China disputes.

The Chinese have refused to stop their exploration of the field, granting Chinese companies oil and gas exploration rights to 12 plots in the area that belong to Japan. Some observers believe the dispute has damaged Japan's bid to gain a permanent seat on the U.N. Security Council (Greenwire, March 6).

Japan had no comment on the drilling because it had not confirmed that actual production had started (Wall Street Journal).

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