Asean Members Try To Forge Agreement On Oil And Gas Rich Spratly Islands

By Timothy Daiss

China has been seeking bilateral agreements with individual Asean members (the Association of Southeast Asian Nations) on oil exploration projects in the resource rich but hotly contested Spratly Islands in the South China Sea. In April, meeting in Hanoi, Vietnam for their annual meeting, Asean members agreed to only negotiate as one body to avoid being placed in a weakened bargaining position with stronger-China.

At the sidelines of the summit, Philippine President Gloria Macapagal-Arroyo attended bilateral talks with Malaysian Primer Minister Dato' Sri Mohd Najib bin Tun Abdul Razak and Vietnamese Prime Minister Nguyen Tan Dung, where the Philippine president expressed hope that Vietnam, Malaysia and the Philippines could negotiate a solution to the territorial dispute in the oil and gas rich Spratly Islands.

The Spratly Islands consist of more than 100 small islands or reefs in the South China Sea between the Philippines, Malaysia, Brunei, Vietnam and China. They are surrounded by oil and gas deposits.

The islands are claimed in their entirety by China, Taiwan and Vietnam, while portions are claimed by Malaysia and the Philippines. Brunei too threw its hat in the ring, by claiming a fishing zone that extends to incorporate one of the Spratly Islands.

Approximately 45 of these islands are garrisoned by small numbers of military troops from the claimant nations: China, Malaysia, Taiwan, Vietnam and the Philippines respectively.

Chinese estimates of oil and gas reserves, considered inflated by most experts, and spurring considerable competition in the area, place potential oil reserves (not proven reserves) of the Spratly's as high as 105 billion barrels of oil.

However, a 1993-94 estimate by the U.S. Geological Survey (USGS) places the sum total of discovered resources and undiscovered resources in the offshore basins of the South China Sea at 28 billion barrels of oil.

Natural gas, according to the USGS, is more abundant in this area than oil. USGS estimates indicate that about 60% - 70% of the area's hydrocarbon resources are gas.

At the Asean summit the Philippines also urged China and Asean members to enter into a joint agreement to facilitate private sector investments in the area and to continue to address legal and sovereignty issues between claimant countries.

Historically, the area has been ripe for conflict. In 1988, 80 Vietnamese sailors died in a battle with Chinese forces in the area. Last August and October, China seized several Vietnamese fishing boats and their crews when they tried to shelter in the nearby Paracel Islands, just north of the Spratlys, during storms.

In the days leading up to the summit, the area remained problematic between competing nations, particularly since several claims overlap. On Feb. 2, a Vietnamese fishing boat owner reported that a Chinese patrol had stopped and boarded his boat and seized 500 kilograms of fish and equipment.

And finally, on March 22, Chinese naval forces seized a Vietnamese fishing boat in the area and held both boat and crew for several days, sparking vehement protest from Vietnam.