China Discovers New Oil Field in South China Sea

What Happened?

China National Offshore Oil Corporation announced the discovery of a new oil field in the South China Sea this week. According to Chinese officials, the new oilfield reportedly holds up to one hundred million tons of untapped oil. 

Named Huizhou 19-6, the newly discovered oilfield is located in a part of the South China Sea that is within China’s Exclusive Economic Zone.

Reuters reported that the new oilfield is located roughly one hundred miles off the coast of Shenzhen and is situated in waters approximately three hundred feet deep. 

Why it Matters

Beijing has long sought to reduce China’s dependency on oil imports, and the new oilfield could help accomplish that goal in a couple of ways. First, if the oil can be safely extracted from its depths it will provide a new source of crude that is owned and operated by China. 

Second, the discovery and successful development of the oilfield could increase China’s confidence in its ability to locate and utilize offshore resources. This could in turn lead to more exploration. 

The South China Sea has long been an area where simmering tensions with neighboring countries have brought China close to open conflict. In particular, China has been involved in long running disputes with Vietnam, Taiwan, the Philippines, Malaysia, and Brunei.

Most of this is over ownership of the Spratly Islands and the resources which may lie nearby beneath the sea floor. 

Vietnam and the Philippines have rejected China’s claim of ownership. Efforts by various countries to build outposts in the area for military use has often led to increased tensions among the south Pacific neighbors. 

The discovery of a major oil field in the South China Sea could lead to other countries stepping up their own efforts to locate new resources in the area. This would intensify an already precarious race to find them and claim ownership. 

The United States often conducts freedom of navigation exercises near the South China Sea with other Pacific nations. These activities often draw the ire of Beijing. 

Under maritime law, international waters may be used by any country for commercial or military naval activity. But Beijing claims some parts of the South China Sea as its sovereign territory.

Meanwhile, other countries believe it is international waters, resulting in military exercises often putting American and Chinese warships within firing range of each other. 

If south Pacific nations send even more ships and personnel into the South China Sea in search of new oil deposits, the likelihood of a major incident will increase.

How it Affects You

The Trump Administration has shifted its focus to China as a key component of its national security strategy. 

The contest to find and develop resources in the South China Sea alongside the competing geopolitical interest of the U.S. and China make the area a potential flashpoint for a conflict to break out.