China SignPost™ (洞察中国) #31–China Aims to More Than Triple Its Oil & Gas Production in the South China Sea over the Next 10 years
Gabriel B. Collins and Andrew S. Erickson, “China Aims to More Than Triple Its Oil & Gas Production in the South China Sea over the Next 10 Years,” China SignPost™ (洞察中国) 31 (3 April 2011).
China SignPost™ 洞察中国–“Clear, high-impact China analysis.”©
New deepwater oil & gas exploration and production will likely complicate the South China Sea maritime security environment.
- China is aiming for oil & gas production of 500,000 barrels of oil equivalent (boe) per day by 2015 and 1 million boe per day by 2020 in deepwater areas of the South China, according to China 5e. CNOOC, China’s dominant offshore producer, had total output of roughly 290,000 boe per day from the South China Sea during 2010.
- Shanghai Waigaoqiao Shipyard has built the HYSY 981 drilling rig, which can drill in 3,000 m of water to a total well depth of 12,000 meters.
- The HYSY 981 deepwater rig gives China the physical capacity to drill virtually anywhere in the South China Sea apart from the deepest parts of the abyssal plain.
- Greater Chinese oil & gas production in portions of China’s EEZ in the South China Sea near major international sea lanes could exacerbate Chinese sensitivities regarding freedom of navigation in the area.
- Although China’s sovereign deepwater drilling capabilities are set to rise, we believe Beijing will exercise restraint in unilaterally exploiting energy resources further than 200 nautical miles from the Chinese Coast. Even the benefits of a large new oil or gas field would not outweigh the negative implications of catalyzing more formal anti-China regional security alignments. … … …
