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South China Sea

August 2, 2010
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The South China Sea is bordered by Vietnam, China, The Philippines, Borneo and Malaya and covers an area of 1.4 million square miles which, is roughly twice the area of Alaska or five times the area of Texas.

The US Energy Information Agency (EIA) estimates that the South China Sea has proven oil reserves of around 7 billion barrels, while the US Geological Survey estimates there is an additional 20 billion barrels of undiscovered oil.

There are numerous reefs, rocks and small islands in the South China Sea, especially around the Paracel and Spratly island chains.

China has long considered the South China Sea as one of the “near seas” which form a core strategic interest.

Quoting from a US Naval Institute article, “In the 1930s China’s Republican government formed the Land and Water Maps Inspection Committee. … The committee reported in 1935 that in the South China Sea, China’s southernmost territorial feature is the James Bank, which sits about 50 nautical miles off the coast of Borneo, and that China’s maritime boundary should therefore extend south to 4 degrees North latitude. By 1947, the government of the Republic of China began to publish maps with a U-shaped series of lines in the South China Sea to delineate its maritime boundaries.

“The Chinese government repeated this cartographic feature after the Communist party came to power on the mainland in 1949, and today it remains depicted on every map published in China and Taiwan.”

China has said that each of these rocks, reefs and small islands are a part of China and that the 200 mile area surrounding them is part of China’s exclusive economic zone.

In addition to China’s strategic interest, there is now the issue of who owns the oil.

In 2008 China warned Exxon Mobile to not enter into an agreement with PetroVietnam to explore for oil in the South China Sea. Similarly, BP was deterred from entering into a natural gas project with Vietnam.

China’s confrontation with a U.S. reconnaissance plane in 2001 and the harassment of a U.S. Navy surveillance vessel in 2010 probably are a result of China’s claim to the South China Sea.

It’s reasonable to assume that China views the oil resources in the South China Sea as belonging to them, though the other nations bordering the South China Sea have also laid claim to portions of the same area.

China lacks the naval forces to enforce their sovereignty over the area, but that may not be the case twenty years from now. In their view, they have established a rationale for why they should have sovereignty over the area.

China has undertaken a worldwide approach to securing ownership or commercial interests in vital oil and natural gas fields. The South China Sea represents another effort by China to secure the oil and natural gas it needs.

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