U.S. report details rich resources in South China Sea
There are approximately 11 billion barrels of oil reserves and 190 trillion cubic feet of natural gas reserves in the South China Sea, according to the report by the U.S. Energy Information Administration (EIA) dated Feb. 7.
It also cited a report by the Chinese National Offshore Oil Company in November 2012 that said there are around 125 billion barrels of oil and 500 trillion cubic feet of natural gas in undiscovered resources in the area, but the EIA added that independent studies have not confirmed that estimate.
The region, stretching from Singapore and the Strait of Malacca in the southwest to the Strait of Taiwan in the northeast, is one the most important trade routes in the world. It is home to rich resources and is of significant strategic and political importance, said the EIA, the statistical and analytical agency within the U.S. Department of Energy.
It said natural gas consumption in Asian countries outside the Organization for Economic Cooperation and Development increases by 3.9 percent annually and is expected to grow from 10 percent of world gas consumption in 2008 to 19 percent by 2035.
China is projected to account for 43 percent of the growth, particularly with its ambitious goal of "increasing the share of natural gas in its energy mix from 3 percent to 10 percent by 2020," the report said.
The Spratly Islands, known as Nansha Islands in Taiwan, are estimated to "have virtually no proved or probable oil reserves. Industry sources suggest less than 100 billion cubic feet in currently economically viable natural gas reserves exist in surrounding fields," according to the report.
The U.S. Geological Survey, however, estimates that there are some 2.5 billion barrels of oil and 25.5 trillion cubic feet of natural gas in undiscovered resources.
The report also said evidence reveals that most of these resources are likely located in the contested Reed Bank at the northeast end of the Spratlys, which are claimed by China, Taiwan, and Vietnam.
The Paracel island territory, meanwhile, does not have significant discovered conventional oil and gas fields and therefore has no proved or probable reserves, according to the report.
The South China Sea is estimated to be "more viable as a source of natural gas than as a source of oil, so producers would have to construct expensive subsea pipelines to carry the gas to processing facilities," the report said.
It also said that Taiwan, like China, "asserts 'historic' sovereignty over all features drawn within the dashes originally shown on a map published by the Kuomintang government in 1947 -- including the Spratly Islands, Paracel Islands, Pratas Island, and Scarborough Reef."
Taiwan occupies several of the Spratly Islands, including Taiping Island -- the largest islet in the Spratlys -- and administers the Pratas Islands, also known as the Dongsha Islands in Taiwan.
The South China Sea region is claimed either entirely or in part by Brunei, China, Malaysia, Taiwan, Vietnam and the Philippines.