Disputes Freeze Hopes for South China Sea Oil Gas Development

Despite being a potentially hydrocarbon-rich region, the prospects of developing oil and gas resources in the South China Sea have often fluctuated with the state of relations among protagonists in the territorial dispute. The latest flare-up in the spat resulted from growing concerns among key players to China’s reclamation program in the region.

The reclamation work – which Rigzone reported earlier citing U.S. estimates provided by The Wall Street Journal – comprised an expansion of artificial reefs in the Spratly Islands to 2,000 acres of land compared to 500 acres in 2014. The island-building program in the South China Sea has become a major regional concern as it transformed “semi-submerged reefs into forward bases with airfields fit for military use” by China.

Bloomberg reported Nov. 22 that the reclamation program was focused primarily on the Spratly islands “within waters that carry about 30 percent of global trade. China is building as many as three airstrips there, prompting concern in the U.S. that its actions will provide it with military bases and risk hindering the free movement of shipping.”

“The island construction work that is creating vast amounts of new acreage … with buildings, harbors and, most importantly, runways appearing in recent months ... The bases could have a ‘significant impact on the local balance of power’ by helping bolster the forward presence of Chinese coast guard and navy forces,” Euan Graham, director of the International Security Program at the Lowy Institute in Sydney, Australia told Associated Press in an article published in Indonesian daily Jakarta Post Dec. 6.