tensions rise in south china sea as china seeks oil gas in disputed waters

Friday, May 30, 2014

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Simmering tensions in the South China Sea were brought to the surface in early May after a drilling rig deployed by China National Offshore Oil Corp. (CNOOC) arrived on site near the Paracel Islands to explore for petroleum resources.

While China was busy fending off Vietnam’s attempts to disrupt drilling operations in the contested area, violent protests erupted against China’s economic interests in Vietnam, resulting in injuries and deaths to Chinese citizens in the Southeast Asian country. This latest incident further strained an already tense relationship between China and rival claimants in the South China Sea territorial spat.

CNOOC’S DRILLING TRIGGERS ROW

China’s exploration drilling in the disputed area came in the wake of U.S. President Barack Obama’s trip to Asia last month. Obama assured American allies in the region of U.S. support as they deal with a more assertive China, whose military capabilities have been strengthened in recent years. The addition of an aircraft carrier to the Chinese navy was viewed apprehensively among littoral states in Southeast Asia and East Asia.

During his Asian tour, Obama stated in an April 23 joint press conference with Japanese Prime Minister Shinzo Abe that the U.S.-Japan security treaty covers the islands – known as Senkaku in Japan and Diaoyu in China – that laid at the heart of the Sino-Japanese territorial dispute. Even so, Obama emphasized the need for both countries to resolve the dispute peacefully.

The Philippines, which has an ongoing territorial spat with China in the South China Sea, inked a new defense pact with the United States April 28 ahead of Obama’s visit. The agreement called for greater cooperation between the two military forces and allowed the U.S. to establish a temporary, “rotational” presence at Philippines bases around the country, the Wall Street Journal reported.

Prior to signing of the new defense pact, both countries were allies under a 1951 mutual defense treaty. However opposition in the Philippines led the U.S. military to depart from the Subic Naval Base and the Clark Air Base when leases for these bases expired in 1991.

On May 2, CNOOC deployed the Hai Yang Shi You 981 (UDW semisub) near the Paracel Islands, whose sovereignty is being contested by China and Vietnam. In a May 3 announcement on its website, the Maritime Safety Administration of China (MSAC) informed all vessels to stay a mile away from the semisub.

 

Rig at the Center of the Latest Territorial Spat: Hai Yang Shi You 981

Vietnam Oil and Gas Group (PetroVietnam) protested against the activities of Hai Yang Shi You 981 (HYSY981) as it is drilling around 120 nautical miles from Vietnam’s coast. PetroVietnam pointed out that the drilling had violated Vietnam’s sovereignty as it is located within the country’s 200-mile exclusive economic zone (EEZ) which has been provided for under the United Nations Convention on the Law of the Sea, the company said in a press release.

PetroVietnam also informed CNOOC’s CEO in a letter dated May 4 that it strongly opposed “the action and resolutely demanding that the Corporation cease the illegal actions immediately and move the HYSY981 out of Vietnam’s waters.” CNOOC ignored the Vietnamese demand as the MSAC extended the prohibited zone around the semisub to a 3-mile radius.

The HYSY981 was operating “completely within the waters of China’s Paracel Islands,” Chinese Foreign Ministry spokeswoman Hua Chunying said, as quoted by Reuters. China has occupied the islands since 1974 after seizing it from the South Vietnamese forces.

China’s semisub deployment to the disputed area was intended to “expose the gap between Obama’s rhetoric and U.S. capability to respond to China’s assertion of its sovereignty claims … China manufactured the oil rig crisis to demonstrate to regional states that the U.S. is a ‘paper tiger’,” Carl Thayer, Emeritus professor at The University of New South Wales in Australia commented in the May 12 edition of The Diplomat.

Still, overlapping claims for control of South China Sea has remained a source of tension as the region is believed to contain abundant energy and fisheries resources, besides being home to one of the world’s major shipping lanes.

South China Sea has an estimated 11 billion barrels of oil and 190 trillion cubic feet (Tcf) of natural gas. The volumes are equivalent to the amount of proved oil reserves in Mexico and around two-thirds of the proved natural gas reserves in Europe, excluding Russia, according to the U.S. Energy Information Administration.

“For China, it’s purely an economic issue. Very little to do with sovereignty as the Paracel Islands have already been under effective Chinese control … so this is purely a resource issue,” Dr. Li Ming Jiang, associate professor at S. Rajaratnam School of International Relations in the Nanyang Technological University in Singapore told Rigzone.

CNOOC CONTINUES DRILLING DESPITE TENSIONS

To prevent disruption to CNOOC’s exploration drilling, HYSY 981 was accompanied by up to 80 vessels, including 7 People’s Liberation Army Navy warships. So far, attempts by the Vietnamese Coast Guard vessels to defend the country’s sovereign jurisdiction have been met with a forceful response from China. Vietnam claimed Chinese ships used water cannons and rammed its vessels, but China argued otherwise.

“Our aim, our only aim, is to guarantee our reasonable, legal, normal drilling operations, Yi Xianliang, deputy director-general at the Department of Boundary and Ocean Affairs in the Chinese Ministry of Foreign Affairs said, Reuters reported May 8.

Perhaps China had “underestimated the reactions of Vietnam and the international community over the rig deployment … Vietnam can make a fuss, but it can’t compel China to back down,” Dr. Li added.

The rig issue has led to anti-China riots in Vietnam, with at least 6 deaths and over 200 injured reported by Reuters. With the HYSY981 expected to continue exploration drilling in the disputed area until mid-August, tensions may escalate further in the days ahead.

Already, both countries had traded accusations over the May 27 sinking of a Vietnamese fishing vessel around 17 nautical miles from HYSY981 – the first such incident since the latest dispute began earlier this month, according to Reuters. Still, CNOOC continues with its operations in the contested region as planned, with the semisub moved to another site in the area for further exploration work after completing drilling at the first well earlier this week.

“This is the first time China has placed one of its oil rigs in the EEZ of another state without prior permission … Vietnam has reiterated its determination to respond to Chinese tactics of ramming its vessels. The current stand-off between Chinese and Vietnamese vessels in the waters around the CNOOC oil rig therefore holds the potential for an accident, a miscalculation, or the use of deadly force,” Thayer commented.

With CNOOC expected to analyze data from HYSY981’s drilling to determine the viability of commercial hydrocarbon development in the area, this latest incident “may give momentum to both sides to seriously consider joint development of resources in the disputed areas,” Dr. Li said May 19 in The Straits Times.

TENSIONS REMAIN ELSEWHERE IN THE REGION

Even as China and Vietnam continue their standoff in the South China Sea, Philippines has taken steps to bolster its claims in the contested region. Forum Energy plc, a unit of Philippine company Philex Petroleum Corp., revealed plans May 21 to drill two appraisal wells at Sampaguita gas field –located in Reed Bank – or Recto Bank as known in the Philippines – in Service Contract (SC) 72 – in early 2016.

“That’s the plan of Philex Petroleum, subject to Philippine government approval … of course we do not know how China would react,” Philex Chairman Manuel Pangilinan told Reuters.

Ongoing territorial spat between China and the Philippines has disrupted Forum’s plan to drill at least two appraisal wells in SC 72, which Manila awarded to the firm in 2010. Chinese patrol vessels threatened to ram a survey ship chartered by Philex for its Reed Bank project in 2011, leading the company to halt its exploration work.

Forum risked further antagonizing China after indicating that it plans to invite other potential partners to jointly develop the Sampaguita field, which it estimated to contain contingent resources of 2.6 Tcf of gas in place. This followed the failure of similar talks with CNOOC. Meanwhile, tensions between the two countries could escalate after Manila launched a tender May 9 inviting bids for 11 oil and gas exploration blocks, including one in the contested area – Area 7 in the Reed Bank.

“China law enforcement vessels will sail around the exploration areas [in the disputed areas] and stop exploration activities … no international companies would want to operate in such a situation,” Dr. Li said in his comments on the Philippine tender.

Strained ties between China and Japan together with recent incidents in the South China Sea may have prompted Tokyo to consider deploying 350 troops on Nansei Islands, near the hotly-contested Senkaku/Diaoyu Islands, Japan News reported May 19. A month ago, Japan commence construction of a military radar installation on nearby island on Yognaguni.

With its attention currently diverted to the south of East China Sea, there appears little need for China to further intensify its differences with Japan.

“China has already achieved its goals. Chinese boats can go there now and it exercised de facto joint control of Diaoyu/Senkaka … so no further intensification of the spat with Japan is likely for now,” Dr. Li said.

 

sumber : www.rigzone.com