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Thayer South China Sea: China's Deep Sea Oil Rig

Thayer South China Sea: China's Deep Sea Oil Rig

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Published by Carlyle Alan Thayer
This brief explores the implication of China's new deep water drilling rig and its operations in the South China Sea, China's relatively peaceful approach to sovereignty disputes this year, and Chinese pressures on Russia and India to stop oil exploration activities in the South China Sea.
This brief explores the implication of China's new deep water drilling rig and its operations in the South China Sea, China's relatively peaceful approach to sovereignty disputes this year, and Chinese pressures on Russia and India to stop oil exploration activities in the South China Sea.

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Published by: Carlyle Alan Thayer on May 19, 2012
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07/12/2012

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Thayer Consultancy

ABN # 65 648 097 123

Background Briefing: South China Sea: China’s Deep Sea Oil Rig Carlyle A. Thayer May 15, 2012

[client name deleted] 1- Immediately after launching its first deep-water drilling rig CNOOC 981 in the South China Sea, China announced it would enforce its annual unilateral fishing ban in the South China Sea. China has protested new Russian involvement in cooperating with Vietnam to explore for oil. Is China carrying out a strategic plan in the South China Sea to make its u-shaped line a reality? ANSWER: China is acting on the basis of its self-proclaimed “indisputable sovereignty” over the islands and adjacent waters in the South China Sea enclosed within the 9 dash lines. This applies to China’s unilateral annual fishing ban and protests against Russian and Indian cooperation with Vietnam to explore and produce oil and gas. It also applies to Chinese actions at Scarborough Shoal. But the CNOOC 981 deep water rig is operating within China’s Exclusive Economic Zone in the mouth of the Pearl River. This is an important area containing about onethird of China’s oil and gas reserves. This is not contested by any Southeast Asian state. 2 – How do you view the manner in which China is asserting its sovereignty claims? Specifically, this year China has been relatively peaceful; there have been no reports of aggressive behaviour of its vessels in disputed waters unlike previous years. Is China’s use of peaceful methods designed to disarm its critics? ANSWER: China is using civilian ships belonging to the China Marine Surveillance force and the Fishery Law Enforcement Command. This strategy takes advantage of the comparative weakness of the civilian agencies belonging to Vietnam (Canh Sat Bien) and the Philippines (Coast Guard). China has already embarked on a massive ship building program to expand its civilian enforcement agencies. China’s use of civilian agencies is premised on its claim to have sovereignty over the islands and waters in the South China Sea. These ships are therefore merely enforcing Chinese jurisdiction. China is using its interpretation of law to achieve its ends – control over the resources in the South China Sea. 3 – The media reported that India will pull out of its oil block in Vietnam. Is this the result of Chinese pressure?

2 ANSWER: It is impossible to prove a negative. That is, it is impossible to prove that China’s pressure on India had no effect on the decision of ONGC to withdraw. India has been operating in Vietnam since the 1980s. China has not applied any new pressure than previously. ONGC Videsh argues its decision was made on technical grounds because the oil blocks were not yielding commercial results. 4 – It appears that Vietnam has gone silent on South China Sea disputes especially compared to the Philippines. What are the consequences of Vietnam’s low key approach? ANSWER: Vietnam has been able to uses its comprehensive strategic partnership with China to good effect. It has used special envoys, and high-level visits by party, state and military leaders to deal directly with China. One result was the October 2010 agreement on fundamental principles to guide the settlement of maritime disputes. So far Vietnam has been able to compartmentalize its disputes in the South China Sea from its bilateral relations with China. Vietnam must be wary, however, if China succeeds in intimidating the Philippines. Any concessions made by the Philippines will affect Vietnam’s own bargaining position with China. Vietnam can lend its support to the Philippines within ASEAN and by pushing for a strong Code of Conduct in the South China Sea. Suggested citation: Carlyle A. Thayer, “South China Sea: China’s Deep Sea Oil Rig,” Thayer Consultancy Background Briefing, May 15, 2012.

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Academic Papers 2012 on the South China Sea/Maritime Security by Carlyle A. Thayer Available at http://www.scribd.com/carlthayer “Positioning ASEAN between Global Powers,” Presentation to the 14th Regional Outlook Forum, Institute of Southeast Asian Studies, Shangri-la Hotel, Singapore, January 5, 2012. “The South China Sea Disputes and Their Impact on the Security Environment of Southeast Asia: What Lies Ahead?”, Presentation to the International Conference on the Political and Security Implications of the South China Sea Dispute,” co-sponsored by the Center for AsiaPacific Area Studies and the East-West Center, Academia Sinica, Taipei, Taiwan, January 1213, 2012. “Vietnam’s Security Outlook,” Presentation to International Workshop on Asia-Pacific Security, National Institute for Defense Studies, Tokyo, Japan, January 17-18, 2012. “Strategic Relations in Asia: An Overview,” Presentation to 4th East Asia Security Outlook Seminar, Sultan Haji Hassanal Bolkiah Institute of Defence and Strategic Studies, Ministry of Defence, Bandar Seri Begawan, Brunei Darussalam, February 2, 2012. "The Rise of China and Maritime Security in South East Asia," Presentation to 11th IDE Forum, Institute of Developing Economies, Japan External Trade Organization (JETRO) Headquarters, Ark Building, Akasaka, Tokyo, February 9, 2012. “Efforts to Ensure Maritime Security,” Presentation to 2nd Tokyo Defense Forum Seminar, organized by the Ministry of Defense, Galaxy, Chinzan-so, Tokyo, March 16, 2012. “Do Confidence Building Measures Really Address the Major Challenges to Maritime Security?,” Presentation to Joint Meeting of the 36th Australia Council for Security Cooperation in Asia and the Pacific (AUS CSCAP) Meeting and The Australian National University Centre of Excellence in Policing and Security (ANU-CEPS) Maritime Expert Networks Meeting, The Common Room, University House, The Australian National University, Canberra, March 22-23, 2012. “Sovereignty Disputes in the South China Sea: Diplomacy, Legal Regimes and Realpolitik,” Presentation to International Conference on Topical Regional Security Issues in East Asia, cosponsored by the Faculty of Asian and African Studies and the Ho Chi Minh Institute, St. Petersburg State University, St. Petersburg, Russian Federation, April 6-7, 2012.

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