Jul 18, 2011 02:12 PM

Blue Waters, Black Oil in the South China Sea

No Asian country with territorial claims in the blue waters of the South China Sea – and claims to the black oil far beneath the waves – has installed a single oil drill in the heart of the disputed region.

To date, only the sea's continental shelves and coasts of sea-bordering countries have been explored and exploited for oil and natural gas. These sites can be found off the eastern shores of Vietnam, east of Malaysia, north of Indonesia and Brunei, west of the Philippines, and south of China.

International oil giants dominate oil and gas production contracts signed with Southeast Asian countries around the South China Sea. The most radical development has been in Vietnam, where the former Mobil Oil Corp. was the first to discover oil off the southern coast in 1975.

Over the next decade, the country's oil major PetroVietnam and the Soviet concern Zarubezhneft formed Vietsovpetro to jointly develop an oil field called White Tiger.

Today, PetroVietnam remains the country's largest oil company in a sector considered a national economic pillar and a key provider of foreign exchange.

Another country keen on South China Sea oil development is the Philippines, which has a relatively small oil industry. Several exploratory wells drilled in cooperation with international companies have failed to bear fruit.

Nevertheless, the Philippines in late June announced that it would hold international tenders for exploration rights in several blocks in parts of the South China Sea that China claims.

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