Paracel Islands

Uneasy calm

PUBLISHED : Tuesday, 12 April, 2011, 12:00am
UPDATED : Tuesday, 12 April, 2011, 12:00am


Related topics

In April, the waters of the South China Sea are unusually calm. The northern monsoon has all but died and the turbulence of typhoon season is yet to start. It is, among other things, a good time to drill for oil. Before the end of the month, exploratory drilling is due to start in waters off Danang on Vietnam's central coast as part of an agreement between US oil giant ExxonMobil and the Vietnamese government, according to Vietnamese media.

There, any sense of seasonal calm ends. The drilling serves as a reminder that, despite an easing - in public at least - of the diplomatic tensions surrounding South China Sea disputes, key issues remain unresolved and potential flashpoints loom.

The activities off Danang are particularly interesting. The world's largest oil firm, Exxon is a symbol of ongoing US interests in an otherwise regional dispute - interests that saw Washington raise Beijing's ire by leading a diplomatic charge during regional meetings last year.

ExxonMobil is one of the reasons the strategic South China Sea - for decades a source of potential tension - started pinging again on Washington's radars. Shortly after Exxon struck a preliminary exploration deal with Hanoi in 2008 over two blocks off its southern and central coast, it emerged that Chinese envoys had privately but repeatedly warned the company to pull out of the contract or risk hampering its China business. Similar threats had been made to other international firms courting Hanoi, including British, Australian and Japanese operations.

Within days of the South China Morning Post revealing the warnings in July 2008, foreign ministry spokesmen confirmed that China had warned 'relevant parties' of its 'clear and consistent' position on the South China Sea. 'China opposes any behaviour that undermines China's sovereignty and jurisdiction in the South China Sea,' a ministry spokesman said at the time.

China claims the entire Paracel and Spratly archipelagoes that straddle the important waterway. Vietnam is the only other nation to claim both island groups, while the Philippines, Brunei and Malaysia claim them in part. Taipei's claim mirrors that of Beijing.

Beijing officials have yet to comment on the upcoming drilling but, make no mistake, various arms of the government are watching developments closely. And, in return, government and military analysts in countries across East Asia and beyond are watching how China will react, particularly for hints of any evolving military-diplomatic strategy or signs of military or oil industry involvement in foreign policy.

Chinese government and People's Liberation Army officials complain privately that the Vietnamese are effectively internationalising the dispute by involving foreign oil firms as strategic partners. Hanoi officials, meanwhile, claim their own sovereignty and insist that such drilling has been a long-standing policy, pointing to their cold-war-era agreement with then-Soviet joint venture partners that is still responsible for the bulk of its exports of crude oil.

The oil is a reminder, too, that the dispute is not just about sovereignty as some obscure legal concept. The islands that dot the sea are highly strategic and the mineral reserves highly prized. Several senior PLA officials have warned in recent years that members of the Association of Southeast Asian Nations are stealing the march on China by exploiting South China Sea assets - a theme expanded upon in more crudely nationalistic terms in online chat rooms. Not surprisingly, then, foreign oil firms are also watching developments closely.

Washington's more direct involvement in South China Sea issues last year has spurred oil giants to update worst-case scenarios and try to discreetly figure out which country has the strongest claims in the unlikely event that the dispute ever comes to a world court. Part of that interest also reflects the fact that changes in technology have made fractured South China Sea oilfields easier and cheaper to exploit.

The region is watching as drilling begins. The sea itself will be calm, but everything else that surrounds it remains turbulent.

Greg Torode is the Post's chief Asia correspondent