China claims sovereignty over almost the entire South China Sea -- a strategic waterway through which trillions of dollars in trade pass annually -- despite an international court ruling that Beijing's assertion has no legal basis.

The Philippines, Vietnam, Malaysia and Brunei all have overlapping claims in the sea, while the United States sends naval vessels through it to assert freedom of navigation in international waters.

Anwar -- who was on a visit to Beijing recently -- said the "sensitive" issue was raised at a meeting with Chinese President Xi Jinping as Malaysia's state energy firm Petronas has its largest oil platform in the disputed area, as well as several exploration projects.

"I said, as a small country we need the resources, (like) oil and gas, we have to continue (exploration projects)," Anwar said during a monthly speech to staff at the Prime Minister's Office. 

"But if the condition is that there must be negotiations, then we are ready to negotiate."

The premier did not provide further details on the conversation with Xi. 

While asserting their claims in the South China Sea, Chinese authorities in recent years have ramped up its development of artificial islands, including outfitting some with military facilities and runways.

Regional nations have also accused Chinese vessels of harassing their fishing boats. 

In 2021, Malaysia summoned Beijing's envoy to the Southeast Asian country in protest after Chinese vessels entered its maritime economic zone in the disputed sea.

Earlier that year, it scrambled fighter jets to intercept 16 Chinese military aircraft that appeared off Kalimantan over the South China Sea.