China oil firm to cash in on West Philippine Sea

[lastlid]

This oil related news is a little different as it looks like China are offering drilling rights (blocks) for oil companies to drill in what is really Vietnamese waters. WOW. It isn't really theirs to offer the rights. No wonder Vietnam are pithed off.

"One of China's 3 largest state-owned oil companies is looking to cash in on vast energy reserves underneath the disputed waters of the West Philippine Sea.

China National Offshore Oil Corp. (CNOCC) has announced that it is offering 9 offshore blocks covering an area of more than 160,124 square kilometers for joint exploration and development with foreign companies.

CNOCC announced the auction in its website, which shows maps of the blocs being offered.

The areas eyed for exploration are closer to the shores of Vietnam than the Philippines.

CNOOC said foreign companies interested in the project will be allowed to access and buy the company's current data on the blocks.

The auction has triggered protests from Vietnam, which called the project "illegal."

The Vietnamese foreign ministry said in a statement Tuesday that the blocks "lie entirely within Vietnam's 200-mile exclusive economic zone."

China, however, is unfazed.

Chinese Foreign Ministry spokesman Hong Lei described the project as a "normal business activity" that allegedly follows "Chinese laws and international practices.""





http://www.abs-cbnnews.com/business/...philippine-sea

[lastlid]

From the Financial Times:

"Some of the world’s biggest energy companies, including ExxonMobil and Gazprom, have been thrust into the deteriorating territorial dispute between China and Vietnam in the resource-rich South China Sea.
Vietnam on Wednesday accused China of acting “illegally” after state-owned China National Offshore Oil Corporation (Cnooc) invited foreign companies to tender for exploration rights in an area that Hanoi says infringes on blocks that it has already licensed to America’s ExxonMobil and Russia’s Gazprom."

http://www.ft.com/cms/s/0/1e597a9e-c...#axzz1z1AS4tWO

And the BBC.....

http://www.bbc.co.uk/news/world-asia-18610886

[CBM]

Production platforms in war zones are a Really Bad Idea, so Big Oil will take its time, I fancy.

Did you spot that the US Navy is back in Cam Ranh Bay as well as sending ships to Subic? I count two SSNs popping up in Subic recently... hint hint...

Interestingly the Indian Navy, who are really pithed off with the PLA Navy opening bases in Pakistan and Sri Lanka, are running annual cruises into the South China Sea calling at Camh Ranh Bay and at Subic

[lastlid]

Production platforms in war zones are a Really Bad Idea, so Big Oil will take its time, I fancy.

Did you spot that the US Navy is back in Cam Ranh Bay as well as sending ships to Subic? I count two SSNs popping up in Subic recently... hint hint...

Interestingly the Indian Navy, who are really pithed off with the PLA Navy opening bases in Pakistan and Sri Lanka, are running annual cruises into the South China Sea calling at Camh Ranh Bay and at Subic

They could use Chinese drilling contractors and equipment. And in the first instance it would be mobile drilling vessels, potentially supported by the Chinese military forces......

More on the Vietnamese responses below....looking for support from the US....

http://www.radioaustralia.net.au/int...ina-sea/969456

[lastlid]

Looks like both China and Vietnam are offering up the same or similar blocks for exploration / developement. At least this might divert Chinese focus away from the Philippines.

"The Foreign Ministry has protested a Chinese state-owned oil company’s move to offer for exploration nine blocks in a disputed area of the South China Sea. Vietnamese officials say the area is inside Vietnam’s exclusive economic zone and is not part of China. The Chinese government has laid claim to much of the South China Sea, areas of which are believed to be rich in oil, gas and fish. The blocks were put up for bids from foreign companies last week by China National Offshore Oil Corporation, or Cnooc. Some of the blocks overlap with ones that PetroVietnam, a state-owned enterprise, has already delineated as areas under contract for exploration by foreign companies. An executive at PetroVietnam has said it will proceed with the contracts. China said this week that Cnooc had the right to offer the blocks."

http://www.nytimes.com/2012/06/29/wo...-disputed.html

[CBM]

This looks interesting:

http://taylorfravel.com/2012/06/the-...-sea-oil-card/.

as do the linked articles

[lastlid]

Unless foreign companies sign producing-sharing contracts with CNOOC and begin exploration activities in these blocs, CNNOC’s announcement remains more symbolic than substantive. Nevertheless, it’s likely to increase tensions and complicate efforts by all states to manage claims in the region.

Yes. That last paragraph seems to imply that the exploration etc cannot be carried out solely with Chinese hardware and expertise etc. But I believe they have both. If so then they can just go in and do the work, supported by their own military.

http://news.xinhuanet.com/english/bu..._131573325.htm

[lastlid]

Heres a writeup on Chinese ultra deepwater oil technology.

"Chinese energy experts say Beijing will eventually move its first ultra-deepwater rig to explore in deeper and more oil-rich waters further south in the South China Sea, where China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei have overlapping territorial claims
China has spent nearly USD 1 billion on an ultra-deepwater rig that appears intended to explore disputed areas of the South China Sea, according to reports.

The area is one of Asia's most volatile hotspots and where the US is strengthening ties with Beijing's rival claimants.

For now, the locally built Haiyang Shiyou (Offshore Oil) 981 rig owned by China's state-run CNOOC oil company is drilling south of Hong Kong in an area within Beijing's ambit.

"With Chinese offshore drilling technology improving, it is just a matter of time for them to enter the central and southern part of the South China Sea," said Liu Feng, senior researcher at the state-backed National Institute for South China Sea Studies."

http://www.oilandgastechnology.net/u...er-exploration

[lastlid]

China sends patrol to South China Sea as tensions with Vietnam rise

"CNOOC plans to kickstart deepwater exploration this year. It started drilling its first independently operated deepwater well in the South China Sea last month with its newly commissioned Haiyang Shiyou 981 semi-submersible rig. Two other deepwater wells will be drilled by the rig later this year".

This implies that they have the technology....

http://www.platts.com/RSSFeedDetaile...ed/Oil/8458546