UPDATE 1-China, Japan see progress in gas row, no deal yet

BEIJING/TOKYO, June 17 (Reuters) - China and Japan have achieved important progress in resolving a dispute over gas fields under disputed seas, the Chinese Foreign Ministry said, adding that the two Asian powers were still negotiating details.

Japanese media say a deal has been done to jointly develop and share profits from the fields in the East China Sea, although Tokyo's trade minister, Akira Amari, would only say on Tuesday that talks were in the final stages. [ID:nT40401]

The reported accord follows a May summit between Japanese Prime Minister Yasuo Fukuda and Chinese President Hu Jintao at which the two leaders agreed to settle the long-running gas feud.

"China and Japan have achieved important progress in consultations on the East China Sea issue," Chinese Foreign Ministry spokeswoman Jiang Yu said in a statement.

"Both sides are now engaged in consultations on the details, and after an accord is reached, the governments of both countries will make a public announcement at the appropriate time."

Estimated known reserves in the disputed fields are a modest 92 million barrels of oil equivalent -- around three weeks of energy demand in Japan.

Both countries have pursued the issue, lured by the possibility of much bigger deposits being found, although Amari played down these hopes on Tuesday.

"I don't hold high expectations for the estimated reserves," he told a news conference.

The dispute has come to symbolise more than an argument over maritime gas rights by the two energy-hungry countries, because it concerns matters of territory and sovereignty. (Reporting by Chris Buckley and Osamu Tsukimori; Editing by Nick Macfie and Rodney Joyce)