07 June 2012

Like it or Not: State Oil Company Becomes ‘Flag’ in South China Sea

Gabe Collins and Andrew Erickson, Like it or Not: State Oil Company Becomes ‘Flag’ in South China Sea,” China Real Time Report (中国事实报), Wall Street Journal, 7 June 2012.

Update: “Long Tao” is apparently a pseudonym, most likely for Dai Xu. Dai is a People’s Liberation Army Air Force (PLAAF) colonel (not a senior colonel) and hence not the most senior of PLA officers.

Sometimes oil companies follow the flag, sometimes the flag follows them — and sometimes they themselves become the flag.

The third scenario has come to pass in the highly contested South China Sea with the recent launch of a new deepwater rig by China’s state-run China National Offshore Oil Corporation (CNOOC) roughly 320 kilometers south of Hong Kong.

On May 9, CNOOC Chairman Wang Yilin described the company’s new rig in terms befitting of an aircraft carrier, calling it “mobile sovereign territory” and a “strategic weapon” for developing South China Sea energy resources – a statement that has led many to wonder whether CNOOC is in effect serving as a tool of state policy in the South China Sea. …