Spratly Islands Will be Quiet in 2008


Chinese oil companies are unlikely to pursue any significant hydrocarbon exploration in the disputed region around the Spratly Islands in 2008, as Chinese national oil companies have slowed activities there to ensure the success of the Beijing Olympics.

The central government doesn’t want the intensifying Spratly sovereignty dispute to heat up, especially with Vietnam, and it has asked the Chinese NOCs to avoid any conflict in the contested waters. As a result, PetroChina has canceled a plan to drill its first wildcat well in the Spratlys.

Last year, Vietnam announced it would explore oil fields off the Spratlys with BP to set up natural gas supply pipelines. Vietnam has also decided to hold elections for parliament members representing 24 of the total 48 islands, which it occupies. In response, China established the city of Sansha, which is part of Hainan Province and encompasses all of the islands on waters spanning 2.6 million square kilometers. In early December, a Vietnamese group protested in front of the Chinese embassy in Hanoi.


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