GGP: The South China Sea Disputes: The Energy Dimensions
The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.
This is an excerpt from an article originally published by the Rajaratnam School of International Studies (RSIS), Nanyang Technological University on May 4, 2017.
The regional oil and gas reserves in the South China Sea have become economically and geopolitically less important due to oversupply in the global oil and gas markets, new diversification options and low oil and gas prices. Beijing’s deepwater projects in the South China Sea are not exclusively or primarily driven by commercial factors.
In light of previous forecasts of “peak-oil” assumptions and the resulting worldwide increase in resource competition, the presumed large offshore oil and gas fields in the South China Sea had sometimes been labelled as the “new Persian Gulf”. But according to the US Energy Information Administration (EIA) and its estimate for 2013, the presumed 11 billion barrels of oil (comparable with Mexico’s) and 190 trillion cubic feet (tcf) of gas (comparable with Europe’s without Russia) under the South China Sea appear much more marginal.
However, many Chinese estimates, such as the one by the state-owned oil company China National Offshore Oil Corporation (CNOOC), assume that the South China Sea deposits are much larger (at 125 bn barrels of oil and 500 tcf) – up to one third of China’s total oil and gas resources. As perceptions often matter more than facts, the situation is complicated by other factors.
Frank Umbach PhD is Research Director at the European Centre for Energy and Resource Security (EUCERS), King's College, London (www.eucers.eu) and Senior Associate at the Centre for European Security Strategies (CESS GmbH), Munich (www.cess-net.eu). He was previously also a Co-Chair of CSCAP-Europe. He contributed this to RSIS Commentary.
The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.