Oil Report

Japan says gas talks could affect PM's China visit

TOKYO, Nov 14 (Reuters) - Japanese Prime Minister Yasuo Fukuda’s plans to visit China could be affected by a lack of progress in talks about resources in disputed waters between the two countries, the top government spokesman said on Wednesday.

The 11th round of talks about natural gas in the East China Sea ended earlier in the day with no sign of progress, though the two sides had said in April they would agree a plan for joint development by the autumn.

“It is very worrying that even though we had agreed to reach a deal on the East China Sea by this autumn, no progress has been made at all,” Chief Cabinet Secretary Nobutaka Machimura told reporters.

“If the situation continues, I am concerned it may affect the plan for Prime Minister Fukuda to visit China,” said Machimura, the top government spokesman.

“I feel this is an urgent problem and I want the Chinese side to share that sense of urgency.”

Japan’s negotiators have asked that a further round of talks be held in Beijing before the end of November. Foreign Minister Masahiko Komura is also set to make the issue a priority on a visit to China in December.

China's CNOOC Ltd 0883.HK said in April it had begun producing gas from the Tianwaitian field and was ready to begin producing from the larger Chunxiao field.

Resource-poor Japan is concerned that Chinese production in the area could siphon off gas from what Japan sees as its own exclusive economic zone. The two countries disagree over the boundary between their respective zones.

Fukuda, who came to office in September, has been considering making his first visit to China at the end of this year or early in 2008, media reports have said.

Bilateral ties between the Asian giants have long been dogged by a range of problems, many relating to Japan’s wartime invasion and occupation of parts of China.

Fukuda’s predecessor, Shinzo Abe, succeeded in warming ties, partly by staying away from a controversial war shrine in Tokyo seen by many in Asia as a symbol of Japan’s past militarism, but the gas issue has remained intractable. (Reporting by Isabel Reynolds, Editing by Michael Watson)