South China Sea joint energy deals will fail in face of maritime disputes, study finds

Chinese scholar Song Xue examined 19 joint development projects worldwide between 1958 and 2008 and found territorial disputes that hurt bilateral ties often caused pacts to fail

She cited the Philippines-China venture as an example where both sides had set aside claims for ‘mutual economic gains’

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China’s Liaoning aircraft carrier with accompanying fleet conducts a drill in an area of South China Sea. Photo: Reuters

Published: 12:30pm, 20 Dec 2019Updated: 10:07pm, 20 Dec 2019

Joint development of oil and gas resources in the disputed South China Sea between claimant states that simultaneously are seeking maritime delimitation with one another are likely to end in failure, a new study based on historical analysis of similar projects indicates.

The peer-reviewed qualitative study by Song Xue of Fudan University in Shanghai found that in 19 joint development projects worldwide between 1958 and 2008, the “necessary condition” for failure was a deterioration of bilateral ties between the partner countries – often over their maritime disputes.

In contrast, there were no consistent correlations between failure of such bilateral pacts and five other factors: an absence of economic incentives, high energy independence of countries involved, domestic politics, “third-party” interference and disagreements over the details of the venture.

Writing in the latest edition of the Contemporary Southeast Asia journal published by Singapore’s ISEAS-Yusof Ishak think tank, Song wrote that for the claimant countries to cash in on the energy bounty of the South China Sea, the best approach would be to “shelve their territorial disputes to pursue joint development”.

The waters – claimed by China, Vietnam, the Philippines, Brunei, Malaysia and the self-ruled island of Taiwan – have 200 oil- and gas-bearing structures and 180 hydrocarbon resource fields, Song said, adding that some Chinese researchers call the area a “second Persian Gulf”.

The study of past joint ventures showed “improved bilateral relations is the prerequisite for the effective implementation of joint development ventures, and not the other way around” said Song, an assistant professor at the Institute of International Studies.

“Littoral states should also not pursue joint development agreements as a false pretext to secretly consolidate their maritime boundary claims, or to confirm the status of a ‘dispute’.”

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