- The international community has a watchful eye on China's military in the South China Sea.
- China's presence there is all about oil.
While it’s no secret that China has been intensifying its building frenzy, including military installations on islands, reefs and inlets in the heavily disputed South China Sea, it is also becoming increasingly clear that Beijing is not afraid to draw a line in the sand over these mostly dubious claims.
Late last week, while downplaying his country’s geopolitical ambitions, China's foreign minister Wang Yi still couldn’t resist plugging the party line.
“Beijing's resolve to protect the peace and the stability of the South China Sea cannot be shaken," Wang said, adding that the problems in the region are due to "foreign forces" which "have sent fully armed warships and fighters to the South China Sea to flaunt their military might.”
His reference to so-called foreign forces include increased freedom of navigation voyages by the U.S. Navy in the South China Sea, which is for all intent and purposes, an U.N.-mandated international waterway. Lately, Australia and even the U.K. have started to challenge Beijing’s claims in the troubled water way. China, which has over-lapping territorial claims in the South China Sea with the Philippines, Vietnam, Taiwan, Malaysia and Brunei, claims nearly 90 percent of the sea in what is commonly referred to as its nine-dash line.
Taking a step back from the constant rhetoric and even at times sabre rattling over the matter, it’s fair to ask why would the world’s newest super power and second largest economy be willing to jeopardize its reputation and standing with not only its neighbors in the Asia-Pacific region, but also its image before an increasingly alarmed and watching international community? The answer, as is often the case in geopolitical power plays, is oil, and likely, plenty of it.
How much oil?
One older Chinese estimate places potential oil resources in the South China Sea as high as 213 billion barrels, though many Western analysts have repeatedly claimed that this estimate seems extremely high. A conservative 1993/1994 US Geological Survey (USGS) report estimated the sum total of discovered reserves and undiscovered resources in the offshore basins of the South China Sea at 28 billion barrels – yet, this estimate, for its part, seems particularly low.
Moreover, the 1993/1994 USGS estimate states that natural gas is actually more abundant in the area than oil. According to the USGS, about 60 percent-70 percent of the area’s hydrocarbon resources are gas while the sum total of discovered reserves and undiscovered resources in the offshore basins of the South China Sea is estimated at 266 trillion cubic feet (tcf).
State-owned oil major China National Offshore Oil Company (CNOOC), responsible for most of China’s offshore oil and gas production, claims that the area holds around 125 billion barrels of oil and 500 tcf of gas in undiscovered areas, although the figures have not been confirmed by independent studies.
Perhaps that’s why CNOOC spent over a billion dollars to build its Hai Yang Shi You 981 (HYSY 981) deep sea drilling rig. When it was launched in 2014, Chinese authorities claimed that the rig was actually considered Chinese “sovereign territory.”
Since then the rig has been used for various purposes, including a controversial deployment in mid-2014 off Vietnam’s coast in the country’s U.N. mandated Exclusive Economic Zone (EEZ).
The Vietnamese responded in turn, protesting and burning Chinese owned-factories in the country, eventually forcing Beijing to evacuate Chinese nationals and also forcing the early withdrawal of rig HYSY 981. The standoff was regarded by analysts as the most serious development in the territorial disputes between China and Vietnam since the Johnson South Reef Skirmish in 1988, which saw 64 Vietnamese soldiers killed.
According to a newer USGS study in 2010, there is a 95 percent chance that there is at least 750 million barrels of oil in the South China Sea Platform, a median chance of around 2,000 million barrels, and a low probability (5 percent) of over 5,000 million barrels. Geologists have recently stated that the South China Sea Platform is an area rich with source carbon and has the perfect geological conditions necessary for hydrocarbon development, particularly oil.
While Western geologists seem to only recently appreciate the area’s oil and gas potential, the Chinese have known it for years. Perhaps, that’s why they even refer to the South China Sea as a Second Persian Gulf and will undoubtedly continue to not only build there but defend it with rhetoric and if push comes to shove, by force.
