Sat, Feb 09, 2013 page1

• US report touts South China Sea riches

  BIG BOUNTY: The undersea reserves of oil and natural gas in disputed areas are far higher than previously estimated, a US report said, and could prove to be even higher

  • By William Lowther / Staff reporter in Washington
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  There are about 11 billion barrels of oil and 190 trillion cubic feet of natural gas under the South China Sea, according to a US government report released on Thursday.

  The reported oil reserves are higher than the proven oil reserves of Mexico, Angola and Azerbaijan, slightly less than the proven 14.8 billion barrels of oil in China and about half of the US’ proven oil reserves of 20.6 billion barrels, according to the CIA’s World Factbook.

  The numbers — based on estimates by the US Energy Information Administration (EIA) — are significantly higher than the previously issued private US estimates of 2.5 billion barrels of oil.

  “It is difficult to determine the amount of oil and natural gas in the South China Sea because of under-exploration and territorial disputes,” the EIA report says.

  The estimates include both proven and probable reserves, and the report says there may be additional hydrocarbons in underexplored areas.

  In November, the Chinese National Offshore Oil Corp (中國海洋石油), estimated the area held about 125 billion barrels of oil and 500 trillion cubic feet of natural gas in undiscovered resources. US experts believe these figures to be far too high.

  “Stretching from Singapore and the Strait of Malacca in the southwest to the Strait of Taiwan in the northeast, the South China Sea is one of the most important trade routes in the world,” the report says.

  It notes that the area includes several hundred small islands, rocks and reefs, with the majority in the Paracel (Xisha Islands, 西沙群島) and Spratly (Nansha Islands, 南沙群島) island chains.

  “Several of the countries bordering the sea declare ownership of the islands to claim the surrounding sea and its resources,” the report says.

  The EIA estimates the region around the Spratly Islands to have virtually no proven or probable oil reserves.

  However, the US Geological Survey estimates there could be 2.5 billion barrels of oil and 25.5 trillion cubic feet of natural gas in undiscovered resources.

  According to the new report, evidence suggests that most of these resources are likely located in the contested Reed Bank (Lile Bank, 禮樂灘) at the northeast end of the Spratlys, which is claimed by Taiwan, China and the Philippines.

  The Paracel Island territory does not have significant discovered conventional oil and gas fields and has no proven or probable reserves.

  “EIA estimates the South China Sea to be more viable as a source of natural gas than as a source of oil,” the report says.

  It says producers would have to construct expensive undersea pipelines to carry the gas to processing facilities.

  Submarine valleys and strong currents also present formidable geological problems to effective deepwater gas infrastructure.

  “The region is also prone to typhoons and tropical storms, precluding cheaper rigid drilling and production platforms,” the report says.

  It says that Taiwan, like China, asserts “historic” sovereignty over all features drawn within the dashes originally shown on a map published by the Chinese Nationalist Party (KMT) government in 1947 — including the Spratly Islands, the Paracel Islands, the Pratas Islands (Dongsha Islands, 東沙群島) and the Scarborough Shoal (Huangyan Island, 黃岩島).
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