South China Sea may hold 213 billion barrels of oil

Bloomberg- The South China Sea may hold 213 billion barrels of oil, or 80 percent of Saudi Arabia’s reserves, according to Chinese studies cited in 2008 by the U.S. Energy Information Agency. The world’s second-largest economy claims “indisputable sovereignty” over most of the sea, including blocks off Vietnam that Exxon Mobil Corp. (XOM) and Russia’s Gazprom OAO (GAZP) are exploring.

The sea lies south of mainland China at the western extreme of the Pacific Ocean, and while it borders several nations China claims a huge expanse. That’s based largely on a historical map that predates the founding of the People’s Republic in 1949. There are hundreds of islands, many disputed.

The vast amounts of oil and gas indicate the stakes and motivation for conflict over the South China Sea.

For Vietnam and the Philippines, the revenue and energy security from offshore hydrocarbon reserves would help boost economic growth. For China, delays to a final resolution of territorial claims may prove more fruitful in the longer term.

“Time will only make China much stronger, both economically and militarily, and increase its chances of grabbing a bigger share of the pie,” Lin said. “We all know when the elephant moves, it shakes the room.”

The oil and gas could cover any energy shortfall for China for the 2020-2050 timeframe.

Vietnam and the Philippines reject China’s map as a basis for joint development of oil and gas resources, and have pushed forward oil and gas exploration projects in blocks which also lie within areas claimed by China. In March, Chinese ships chased away a vessel off the Philippines. Chinese vessels in June rammed the cables of a survey ship doing work for Vietnam, the second such incident in a month.

The region may hold 2 quadrillion cubic feet of natural gas. That’s more than five times the 350.8 trillion cubic feet of gas held in North America, according to BP.

The Chinese numbers dwarf a 2010 United States Geological Survey assessment of the entire Southeast Asia region which calculated a mean undiscovered reserves estimate of 21.6 billion barrels of oil and 299 trillion cubic feet of gas, including onshore deposits.

Wikipedia reviews the South China Sea situation

Several countries have made competing territorial claims over the South China Sea. Such disputes have been regarded as Asia’s most potentially dangerous point of conflict. Both People’s Republic of China (PRC) and the Republic of China (ROC) claim almost the entire body as their own, demarking their claims within what is known as the nine-dotted line, which claims overlap with virtually every other country in the region. Competing claims include:

Indonesia, China, and Taiwan over waters NE of the Natuna Islands
The Philippines, China, and Taiwan over the Malampaya and Camago gas fields.
The Philippines, China, and Taiwan over Scarborough Shoal.
Vietnam, China, and Taiwan over waters west of the Spratly Islands. Some or all of the islands themselves are also disputed between Vietnam, China, Taiwan, Brunei, Malaysia, and the Philippines.
The Paracel Islands are disputed between the PRC/ROC and Vietnam.
Malaysia, Cambodia, Thailand and Vietnam over areas in the Gulf of Thailand.
Singapore and Malaysia along the Strait of Johore and the Strait of Singapore.

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