China Hunts for Energy in Stormy Waters

From Al Jazeera

By Colin Shek

China’s hunt for energy to keep the world’s second-largest economy humming is increasingly leading to the deep waters of the South China Sea, where bitter territorial spats are likely to surge.

The country’s dominant offshore oil and natural gas producer, China National Offshore Oil Corporation (CNOOC), is expanding its deepwater drilling capability to meet booming Chinese demand for energy.

Last month, the state-run company sealed a blockbuster takeover of Nexen, a Canadian explorer with deepwater assets stretching from the United States’ Gulf of Mexico to West Africa. CNOOC paid $15.1bn for Nexen, making it China’s largest foreign business takeover to date.

The Nexen deal came less than a year after CNOOC took delivery of an ultra-deepwater drilling platform that cost nearly $1bn to build in Shanghai.

Both moves suggest CNOOC intends to begin exploring deeper, potentially resource-rich waters of the South China Sea – where China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei have overlapping territorial claims.

China’s oft-stated position is that it has indisputable sovereignty over the entire South China Sea, encompassed by its controversial “nine-dash line” map.

For the first time a Chinese Navy task force has been deployed 1,800 kilometres to the southernmost area of the South China Sea that Beijing claims – about 80 kilometres off the coast of Malaysia.

Naval manoeuvres were being carried out to “defend the South China Sea, maintain national sovereignty and strive towards the dream of a strong China”, the state-run Xinhua news agency reported.

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