It is not so much that China’s largest offshore oil company, CNOOC, has started drilling for oil and gas with the country’s first home-developed deep-sea rig, it is more where it is doing so–in the South China Sea. This is Beijing dropping a big marker, so to speak, for its claim to sovereignty over waters to which many nations lay claim.
The rig, CNOOC 981 (above), is able to drill to 3,000 meters; previously, China could only drill up to 500 meters. It is operating some 300 kilometers southeast of Hong Kong between the Paracel Islands, claimed by China and Vietnam, and the Macclesfield Bank, claimed by China and Taiwan. Not too far away lies the Scarborough Shoal, scene of a month-long stand-off between China and the Philippines.
While Chinese fishing fleets have been plying the disputed waters, and sparking diplomatic spats, for years, Beijing has been slow to start exploration for the energy and mineral riches that lie beneath the South China Sea, in part to stop the fisheries tiffs, and the bombastic claims of sovereignty that invariably accompany them, from getting out of hand. That drilling has now started for the 23 billion-30 billion tonnes of oil and 16 trillion cubic meters of natural gas believed to lie beneath the South China Sea–equivalent to one half of China’s existing onshore oil and gas reserves–suggests that the hawks are playing a stronger hand as well as talking one.