CNOOC chief financial officer Yang Hua said at Friday’s presentation of first 2005 quarter business results that all exploration and production projects were being undertaken well away from the disputed area.

CNOOC’s Chunxiao gas field project, scheduled to start production in August, is near the median line used by Japan to separate the two countries' exclusive economic zones, but China does not recognised this boundary.

Japan recently decided to start granting concessions to Japanese firms to drill for oil and gas and oil in the disputed waters and has demanded China provide information on the Chunxiao project as it may straddle the boundary. But CNOOC says the oil fields are located west of the median line and has so far not provided any information to Japan.

CNOOC announced oil and gas income of 11.42 billion yuan (US$1.38 billion) for the first quarter of 2005, 48.1% higher than the same period in 2004.

CNOOC total net crude output was 411,424 barrels of oil per day (bopd), 13.4% more than for the same 2004 period. Offshore crude and liquids production increased by 20% to 327,755 bopd, largely due to increases of production volume from Bohai Bay and Eastern South China Sea. Offshore gas production increased by 7.7% to 266mmscf/d.