In 2018, Vietnam halted the project after losing billions of dollars in losses from stealing oil fro

Mondo Social Updated on 2024-02-29

The South China Sea region not only has significant geopolitical value in the Asia-Pacific seas, but also contains rich oil and gas resources, and is known as the "second Persian Gulf".

As a result, the oil and gas resources in the South China Sea have become the focus of competing interests among neighboring countries. Among them, Vietnam is one of the most important countries that illegally exploit oil and gas resources in the South China Sea, and cooperates with a number of multinational oil companies to continue to illegally exploit oil in the waters under China's jurisdiction, causing huge economic losses to China.

As China's maritime power has grown, China has put pressure on Vietnam and other countries to express its determination to safeguard its territorial sovereignty. Under pressure, Vietnam had to halt a number of oil production projects, and the loss of liquidated damages alone amounted to billions of yuan.

However, China advocates the concept of a maritime community with a shared future with a broad mind, providing a complementary and win-win vision for international cooperation between China and Vietnam in the field of offshore oil and gas.

On the territory of the People's Republic of China, a U-shaped line composed of nine broken lines is depicted on the border of the South China Sea, which is known as the nine-dash line.

The nine-dash line is regarded as the boundary of China's maritime frontier in the South China Sea, and all the territory within it is sacred and inviolable territory that has belonged to the Chinese people since ancient times.

However, in order to maintain its hegemony in the Pacific Ocean and curb China's rise, the United States has secretly instigated countries around the South China Sea in an attempt to challenge and erase the demarcation of the nine-dash line, causing frequent conflicts with China in the South China Sea.

In 1948, the "nine-dash line" was officially demarcated, which is a reasonable and legal product of China's inheritance of historical sovereignty areas. China's sovereignty over islands and related waters in the South China Sea and its historical rights within the nine-dash line have been widely recognized by the international community.

After the founding of the People's Republic of China, the "nine-dash line" was also confirmed and inherited by China. With the increase of China's national strength, the United States is wary of China becoming a maritime military power in the new century and challenging the air and sea hegemony dominated by the United States in the maritime domain in the Asia-Pacific region after World War II.

In order to achieve this goal, the United States has used its superpower status and strength to narrow its interpretation of the United Nations Convention on the Law of the Sea in an attempt to sow discord between China and its neighboring countries by negating China's "nine-dash line" in the South China Sea, which has led to the deterioration of the situation in the South China Sea.

Although China has frequent territorial disputes with Vietnam, the Philippines and other countries in the South China Sea, the deep-seated reason behind it is that these countries covet the rich oil and gas resources in the South China Sea.

The South China Sea is a marginal sea, and its splitting, evolution and formation process are very similar to those of the Atlantic Ocean in terms of oil and gas genesis, so it has extremely rich oil and gas resources.

The thickness of Cenozoic strata on the entire South China Sea shelf has reached 2,000 to 3,000 meters, and the thickest place can even reach 6,000 to 7,000 meters.

The Tertiary sedimentary of these strata includes marine facies, continental facies and marine-continental interlocutary facies, and has very good oil-producing and oil-storing rock systems, including deltas, biological reefs, paleoburied hills and other oil storage types.

According to the analysis of foreign energy experts, the oil reserves in the Nansha Sea are expected to exceed 21.8 billion tons, and the South China Sea is likely to become the world's fourth largest oil and gas resource gathering place after the Persian Gulf and the North Sea.

As early as 10 years ago, China's Ministry of Land and Resources conducted a geological survey of the South China Sea, and the data showed that China's nine-dash line is expected to contain between 23 billion and 30 billion tons of petroleum geological resources, and about 16 trillion cubic meters of natural gas geological resources, accounting for one-third of China's total oil and gas resources, equivalent to 12% of the world's total.

Such abundant oil and gas resources will undoubtedly arouse the strong desire of neighboring countries.

Since the 60s of the 20th century, some countries surrounding the South China Sea have illegally occupied islands and reefs that belong to China, and at the same time have continued to intensify their plundering of oil and gas resources in the South China Sea, in an attempt to assert their sovereignty and show their presence through the development of oil and gas resources, which has seriously violated China's legitimate rights and interests.

Of these countries, Vietnam made the most moves and gained the most benefits. Vietnam has been illegally exploring and exploiting oil and gas resources in the South China Sea for quite some time. In 1968, the Joint Exploration and Coordination Committee for Maritime Mineral Resources under the United Nations Economic Commission for Asia and the Far East released an exploration report revealing the prospect of oil reserves in the South China Sea.

In disregard of the basic principles of international law, Vietnam has illegally occupied some islands and reefs of the Nansha Islands and demarcated its own exclusive economic zone in China's waters, in an attempt to create an established fact of substantial development.

In the South China Sea, most of the oil and gas resources lie dormant on the deep seabed, which is undoubtedly a huge challenge for Vietnam, which is relatively weak in technology. In order to exploit these valuable resources, Vietnam has chosen to cooperate with international oil companies.

To this end, Vietnam has also divided a separate oil bidding block and established the Vietnam National Oil Company. In 1978, Vietnam signed a cooperation agreement with Japan, which was also Vietnam's first attempt to cooperate in the development of oil in the South China Sea.

Over the next 30 years, Vietnam has signed 37 production sharing contracts, 1 commercial cooperation contract and 7 joint development contracts with more than 50 international oil and gas companies.

In order to extract oil illegally in the South China Sea more effectively, Vietnam** has been actively adjusting its policies to attract foreign investment. In 2000, Vietnam amended the Petroleum Law to raise the maximum share of foreign ownership in joint ventures to about 80 percent.

This liberal policy has attracted many international oil giants to set up joint ventures in Vietnam to extract oil in the South China Sea. At present, Vietnam has illegally set aside more than 120 oil bidding blocks in the South China Sea.

Among them, there are many oil fields that are exploited directly in China's nine-dash line, and some oil fields in Vietnamese waters near the nine-dash line have even extended their deep-sea drilling to China's continental shelf, illegally plundering China's oil and gas resources.

Through large-scale illegal oil extraction, Vietnam, once an oil-poor country, has now become an oil exporter, with an annual oil production of more than 20 million tons, and oil has also become Vietnam's largest foreign exchange earner, accounting for more than 30% of Vietnam's GDP.

China firmly opposes the illegal occupation of China's oil and gas resources by neighboring countries in the South China Sea, which seriously violates China's sovereignty and jurisdiction over territorial waters, violates China's laws and regulations, and violates international practice and the basic principles of the Declaration on the Conduct of Parties in the South China Sea.

China** absolutely cannot tolerate such a situation. For example, Vietnam's oil and gas rigs built in cooperation with international oil companies in the waters within the nine-dash line have not been approved by China**, and have repeatedly evaded the constraints of Chinese law and the supervision of law enforcement authorities.

Such behavior not only undermines China's maritime rights and interests, but also causes damage to the resource system of the South China Sea, posing a real and potential threat to the marine environment of the South China Sea.

With the continuous advancement of China's national defense construction and the acceleration of the pace of naval construction, China has established a special coast guard team and successfully possessed maritime law enforcement capabilities in the South China Sea.

In recent years, China's maritime patrol vessels have stepped up their control and law enforcement patrols of all islands, reefs, shoals, sands and waters within the nine-dash line of the Nansha Islands, ensuring China's rights and interests in the South China Sea.

At the same time, the Chinese People's Liberation Army has also carried out regular and irregular military exercises in the South China Sea, enhancing its ability to defend China's sovereignty in the South China Sea through actual combat drills, and having a deterrent effect on relevant countries that attempt to violate China's sovereignty in the South China Sea.

In 2014, China and Vietnam clashed over oil rigs in the South China Sea, and China's successful operation of the offshore oil "981" drilling rig near Chinese waters on Zhongjian Island in the Paracel Islands provoked attacks and provocations from Vietnam.

In the face of provocation, China dispatched a large number of well-equipped coast guard vessels and successfully drove the Vietnamese provocative vessels out of Chinese waters. Seeing that it was not an adversary, Vietnam could only give up its obstruction of the "981" drilling platform, and the United States, as the master behind Vietnam, also personally intervened.

In 2015, U.S. Secretary of Defense Jimmy Carter claimed to have "freedom of navigation and overflight" within a 12-nautical-mile zone of China's islands and reefs.

China has conducted a series of military exercises near the South China Sea to demonstrate its naval might. Under these circumstances, Vietnam has had to reconsider its layout in the South China Sea, and the international oil companies that had been working with Vietnam have also felt unprecedented pressure to start withdrawing from the South China Sea under Vietnam's notice.

The Spanish company has a large presence in the South China Sea and has signed cooperation agreements with countries such as Vietnam to acquire the right to explore and exploit at least 13 oil development blocks.

However, it should be noted that some of the oil fields owned by Petroleos are located on the edge of Vietnam's exclusive economic zone, and in fact these fields have gone beyond Vietnam's exclusive economic zone and into the territory of China's nine-dash line.

Between 2017 and 2018, PENEC received a notice from PetroVietnam to stop drilling in Block 135 135 03 and Block 07 03 in the South China Sea.

Exploration and exploitation of oil fields in deepwater areas requires a lot of time and money. Although the Spanish national oil company was ready, it was naturally dissatisfied when it suddenly received a notice from the Vietnamese side that it would stop work.

As a result, they immediately sent a representative to negotiate with their original partner, PetroVietnam. PetroVietnam is also in trouble, having wanted to continue drilling within the nine-dash line despite warnings from China in order to achieve the established fact of oil and gas extraction.

What they didn't expect, however, was that China had amassed at least 40 ships in the South China Sea, ready to travel to the disputed area to stop illegal oil extraction.

Under intense pressure, Vietnam had to ask its joint venture company, Spanish National Oil Company, to halt drilling, while the UAE's Abu Dhabi Mubadala Group, a leading Middle Eastern oil company, received a similar suspension at the same time.

Not to be outdone, the Middle Easterners demanded huge reparations from Vietnam.

Vietnam has not publicly paid the exact amount of compensation, but industry estimates say that it will have to buy mining rights from Petrosin and Abu Dhabi Mubadala Ji ** because the oil fields cannot be exploited, which is expected to cost around US$800 million.

In addition, there is a need to pay for the cost of compensating for the loss of the upfront investment, which will require at least $200 million. As a result, Vietnam's losses totaled about $1 billion, which is equivalent to billions of yuan.

In addition, it is not only these two Russian and Japanese oil companies that have stopped the production of oil wells within the nine-dash line, which undoubtedly caused huge direct and indirect losses to Vietnam.

For Vietnam, the breakdown of this cooperation is undoubtedly a painful experience of "stealing chickens does not lead to rice".

The enhancement of China's naval strength has greatly improved China's security environment in the South China Sea and provided a more stable security guarantee for China's exploration of oil and gas resources in the South China Sea.

Although Vietnam and other countries have been hit hard by stealing oil from the South China Sea, this does not mean that they are willing to give up oil and gas resources in the South China Sea easily, but they may have the support of the United States behind them.

Therefore, the future security situation in the South China Sea still requires us to remain vigilant.

It is reasonable for all countries to want to benefit from the exploitation of oil and gas resources, but it must not come at the expense of infringing on the sovereignty and jurisdiction of other countries.

Taking into account the complex geographical conditions of the maritime region, China suggests that the countries surrounding the South China Sea should jointly develop the oil and gas resources of the South China Sea and maximize their interests under the guidance of the concept of a maritime community with a shared future on the premise of respecting the territorial waters of the nine-dash line.

Now, in the face of China's strong military power, Vietnam has stopped oil exploration in China's territorial waters and has taken stock of the situation and joined the ranks of joint development of oil in the South China Sea with China.

Although Vietnam has exploited abundant oil and gas resources, due to the lack of refining capacity, the products exported are mainly **, and the output of high value-added products is limited.

China, on the other hand, is ahead of Vietnam in refining technology, and the two sides have reached a consensus to cooperate in oil extraction and petroleum product refining technology to improve the quality and quality of Vietnam's petroleum products.

China's rapid progress in deep-sea oil extraction technology, and the completion of a joint project by China's Ministry of Science and Technology and the State Oceanic Administration demonstrates China's ability to allow manned equipment to reach most of the world's deep seas.

This achievement has laid a solid technical foundation for deep-sea oil and gas exploration and development and scientific research in the South China Sea.

China's sixth-generation deepwater semi-submersible drilling platform, designed and built in-house, is an international leader in its 3,000-meter deep-sea mining technology, providing countries around the South China Sea with technical support unmatched by other international companies.

Driven by these technical supports, countries such as Vietnam have realized the benefits of co-development with China. Today, the number of oil rigs illegally built by other countries in the South China Sea has gradually decreased, and the number of oil and gas exploration cooperation projects between China and neighboring countries is also increasing.

1.Vietnam has suffered huge economic losses in the face of increasing external pressure in the South China Sea, and the situation in the South China Sea is becoming more tense. According to China.com on July 17, 2020, the situation threatens China's energy development and economic interests.

2.Policy adjustment for the exploration and development of oil and gas resources in the South China Sea is an important means for China to actively seek international cooperation and win-win results while safeguarding its own interests.

According to a November 2014 report by the Journal of International Studies, this policy will not only contribute to China's energy security, but also have a positive effect on the economic development of neighboring countries such as Vietnam.

3.In the context of the Belt and Road Initiative, there are broad prospects for energy cooperation between China and Vietnam. According to a July 2021 report by the Journal of Shanghai Electric Power University, the two sides can achieve mutual benefit and win-win results through cooperation in the development of oil and gas resources in the South China Sea, and jointly promote the economic prosperity of the South China Sea region.

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