South China Sea tensions deter oil exploration

Pagasa (Hope) Island is part of the disputed Spratly group of islands in the South China Sea. (Reuters)


Pagasa (Hope) Island is part of the disputed Spratly group of islands in the South China Sea. (Reuters)

An energy analyst said exploring for oil and gas near disputed islands in the South China Sea is too much of a gamble for international energy companies because of the tensions in the region and unconfirmed estimates of the size of the oil and gas deposits.

China has been reclaiming land and building port and military facilities on disputed islands and reefs in the South China Sea, which stretches from Singapore to Taiwan.

Last year, there were skirmishes between China and Vietnam after a Chinese oil rig started drilling in waters claimed by both countries.

The South China Sea is claimed by countries including China, Vietnam, Malaysia, Taiwan and the Philippines.

The seabed beneath the disputed islands and reefs is often described as rich in oil and gas.

However, Christopher Len from the Energy Studies Institute at the National University of Singapore said studies forecasting the size of the resources were not accurate.

"What we have are essentially what I would describe as guesstimates," he said in an interview with the ABC in Singapore.

"The problem is that no party can conduct proper exploration of the region because of the ongoing tensions.

"It's not worth the gamble in my opinion."

Several international energy companies, including US giant Exxon Mobil, have exploration rights in disputed areas of the South China Sea.

Read more

By national resources reporter Sue Lannin