China Sea Oil and Gas Resources
The South China Sea oil and gas resource issue is one of the key factors triggering disputes in the South China Sea. If one acknowledges that the sovereignty and demarcation of islands, shoals and atolls in the Nansha Islands and elsewhere represent the heart of the current disputes in the South China Sea, then one can clearly recognize that the South China Sea oil and gas resource issue is the strategic center of the conflict for relevant parties. Since the 1960s, some countries in the South China Sea region, while continuing to illegally occupy islands and reefs originally belonging to China, have increased their efforts to grab oil and gas from the South China Sea, attempting to declare sovereignty and demonstrate their claims. As result, China’s legitimate rights and interests have been seriously undermined. In view of the surging trend of countries snatching oil and gas from the South China Sea, it is imperative that China conducts thorough examination and research regarding its policy on South China Sea oil and gas survey and development.
Basic Facts about the South China Sea
Oil and Gas Reserves
The South China Sea covers a maritime area of 3.5 million square kilometers. The maritime area within China’s dotted line is just over 2 million square kilometers, of which shallow water area comprises 480,000 square kilometers, deep water area comprises 310,000 square kilometers and super deep area make up 1.22 million square kilometers. It has been proven that the South China Sea consists of 48 Mesozoic and Cenozoic sedimentary basins, of which the central and southern part of the South China Sea boasts 14 medium-large sedimentary basins with an area of 750,000 square kilometers. Results from a China Geological Survey study released in February 2011, show that the northern deep-water area of the South China Sea possesses relatively thick Mesozoic and Cenozoic sedimentary stratum. In sum, the area of sedimentary basin within China’s dotted line is 581,000 square kilometers with 350 proven oil and gas fields or tectonics. The central and southern part of the South China Sea, also the disputed area, has an area of 141.9 million square kilometers, occupying 71 percent of the area within China’s dotted line.
Data assessment by various parties concerning oil and gas reserves in the South China Sea diverges slightly due to a lack of adequate prospecting. According to some expert estimates from Hainan province, oil and gas reserves of the main basins in the South China Sea amount to 70.78 billion tons, of which petroleum deposits comprise 29.19 billion tons (with proven extractable deposits reaching up to 2 billion tons), natural gas deposits comprise 58 trillion cubic meters (with proven extractable deposits totaling 4 trillion cubic meters). Some oil company reports suggest that petroleum reserves from the central and austral part – also within China’s dotted line – amount to 25.53 billion tons, natural gas reserves total 2.085 billion cubic meters, and proven petroleum reserves are 4.2 billion tons and natural gas 580 million cubic meters. One study revealed that China’s neighbors have already identified oil and gas reserves in the South China Sea of 26.8 billion tons, of which petroleum reserves within China’s dotted line total 827 million tons and natural gas reserves amount to 4.0985 billion cubic meters.
The United States Geological Survey estimates that the proven and unproven petroleum reserves in the South China Sea are equivalent to 5 billion tons, with confirmed petroleum reserves amounting to no more than 1 billion tons. These estimates hold that 60 percent to 70 percent of the hydrocarbon in the South China Sea is natural gas. The “Oil and Gas Analysis Report on the South China Sea” released by the United States Energy Information Administration in February 2014 took an even more optimistic view. It estimated that the South China Sea contains approximately 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proven and probable reserves, also claiming that the South China Sea is a potential source for hydrocarbons, particularly natural gas.
The geological census data of China’s Ministry of Land and Resources show that petroleum geological resources falling under China’s jurisdiction in the South China Sea equal roughly 23-30 billion tons and natural gas geological resources total 16 trillion cubic meters, making up one third of China’s total oil and gas resources, and equaling 12 percent of the world total. The petroleum reserves of Zengmu Basin, Sabah Basin and Wanan Basin, which fall roughly half within China’s claimed area, alone are close to 20 billion tons, being one of the remaining large-scale undeveloped oil reserves in the world.
Although various parties hold disparate estimates on the oil and gas reserves in the South China Sea, it is true that the South China Sea is endowed with great oil and gas resources, being one of the world’s four big oil and gas maritime areas. Because of this, the area garners the sustained attention of various countries worldwide and has become the focus of energy development and energy security.
The Ongoing Status of South China Sea Oil and Gas
Extraction by China’s Neighboring Countries
In fact, illegal surveying and extraction of oil and gas resources in the South China Sea within China’s dotted line have been occurring for considerable time. In 1968, the Committee for the Coordination for Joint Prospecting for the Mineral Resources in Asian Offshore Areas, under the UN Economic and Social Commission for Asia and the Pacific, unveiled a report on oil prospecting in the South China Sea. After that, some of the countries in the South China Sea region not only illegally occupied some of the islands and reefs of the Nansha Islands, but also plundered oil and gas resources from China’s area, thereby contravening the basic norms of international law, attempting to take action even before the ownership of the Nansha Islands and the demarcation of the maritime boundaries of the South China Sea had been resolved. Still, some countries arbitrarily drew their exclusive economic zones and unilaterally marked oil bidding areas, all while trying to sign prospecting and extracting agreements with third party oil companies outside the region, carrying out substantial oil and gas development.
For example, since the signing of a joint exploration of oil in the South China Sea between Vietnam and Japan in 1978, the Vietnamese state oil company Petro Vietnam has concluded 37 production and interest-sharing contracts, 1 commercial cooperation contract and 7 joint exploration contracts with more than 50 international oil and gas companies.
Soon after the Vietnamese oilfield “White Tiger” went into operation in the South China Sea in 1986, three other oilfields – “Big Bear”, “Dragon” and “Blue Dragon” – were also activated. The “White Tiger” oilfield is located 150 kilometers southeast of Vietnam and was built in cooperation with the Soviet Union. In 1992, “White Tiger” oilfield produced 5.40 million tons of oil. At present, the “White Tiger” oilfield alone has produced more than 20 million tons of crude oil and generated income of 25 billion USD. The “Big Bear” oilfield sits in the South China Sea region dotted line with a production capacity of over 5 million tons. The “Blue Dragon” oilfield is situated on the Wanan shoal with a projected oil reserve of 68 million tons. In order to expedite the extraction of oil in the South China Sea, Vietnam went to great lengths to adjust its policies regarding foreign investment. Vietnam revised its laws on petroleum in 2000 and lifted the ratio of foreign shares to 80 percent. Vietnam was previously a country that lacked oil, but now it has become an oil exporting country with annual production of 20 million tons. Today, oil is Vietnam’s largest foreign currency earning product, making up more than 30 percent of its GDP.
Similar to Vietnam, the Philippines has also expanded its efforts to entice foreign oil companies to engage in prospecting and development in controversial areas of the South China Sea. Starting in 1976, the Philippines engaged the American Amoco Company to prospect and explore oil reserves in the Lile shoal, unilaterally authorized Western oil companies to extract and develop in the Lile shoal and continuously expanded oil blocks and tendering to foreign companies. In 2003, the country’s Energy Minister announced 46 prospecting and exploitation areas for open bidding, and companies from the United States, the United Kingdom, Canada and Australia attended the bidding. In June 2011, the Philippine Ministry of Energy set in motion the fourth round of energy contracting projects, allowing foreign capital to prospect and exploit the third, fourth and fifth blocks of 15 oil and gas resource areas, with the third and the fourth being located within China’s dotted line. In July 2012, the Philippine Ministry of Energy announced the start of bidding over the three above-mentioned oil and gas blocks.
Malaysia is the third largest oil-producing country in Southeast Asia. It is also the country with the lion’s share of oil resources from the Nansha Islands, with total production much higher than Vietnam, the Philippines and Brunei. Malaysia’s key area of extraction focuses on Sarawak and Sabah, roughly concentrated in the maritime areas between Nantong Atoll and Zenmu Reef. Since the 1960s, Malaysia’s annual oil production has exceeded 30 million tons, and South China Sea oil and gas production has accounted for 70 percent of Malaysia’s total oil and gas production. Brunei has also struck gold through the exploitation of oil and gas resources, with an annual crude oil production of 7 million tons and natural gas production of 9 billion cubic meters from the South China Sea. Of ten oil and gas fields currently under way, eight are offshore and located within China’s dotted line.
In recent years, while ignoring the approach of “shelving differences and seeking joint development,” certain South China Sea claimants have intensified their efforts to prospect and exploit oil and gas resources in the South China Sea. Data from 2009 shows that China’s neighboring countries in the South China Sea region drilled over 1000 oil rigs, completed seismic prospecting of 130 kilometers and identified the equivalent 26.8 billion tons of oil. In addition, 97 oilfields and oil-bearing tectonics have been found, as well as 75 gas fields and gas-bearing tectonics, of which 30 oilfields and 25 gas fields are situated within China’s dotted line. In accordance with relevant data from foreign institutions, by August 2011, China’s neighboring countries in the South China Sea region have 1511 drilling oil wells and 1871 developing oil wells, and discovered 308 oilfields, of which 556 oil wells and 133 oilfields are within China’s dotted line. By the end of 2010, China’s neighboring countries were producing an average of 179 thousand tons of oil every day, which amounts to 65 million tons of oil and 75 billion cubic meters of natural gas yearly. Since the 1970s, China’s neighboring countries in the South China Sea region have signed 428 cooperative agreements with third party oil companies in the South China Sea, with 188 of these agreements being partially or totally within China’s dotted line. As a result, the equivalent of 5,000 tons of oil have been plundered from China’s dotted line every year. This trend is unabatedly gaining momentum.
Attracted by generous profit-sharing ratios offered by some claimant countries in the South China Sea, numerous foreign oil companies have entered the business of prospecting and extracting oil and gas in the South China Sea by virtue of their capital and technological advantages. Presently, roughly 200 international oil companies are contracted to explore and develop oil and gas in the South China Sea area, including Shell, Exxon, British Petroleum, Japex, Inpex, Nissho Iwai, AOC, TOTAL, Canoxy, BHP, Nestro, ONGC, Statoil and PEDCO, among other companies. It can be said that almost all big transnational enterprises have become involved in the prospecting and extraction of oil and gas in the South China Sea. Since the 1980s, third party oil companies from other regions have invested more than 100 billion USD.
Evidently, there is a dynamic taking shape in which scrambling over resources, accelerated extraction and more involvement from third parties are all coalescing. Some claimant countries are not only seeking to claim strategic resources, but also making their illegal occupation of China’s islands and reefs legitimate through oil and gas exploration. From a legal standpoint, only by obtaining sovereignty over an island can one have the right to extract and develop the relevant maritime areas. Consequently, for a quite long time, China’s neighboring countries in the South China Sea area have been trying to occupy the Nansha Islands and grab oil and gas resources in a bid to declare sovereignty, demonstrate their factual existence and further challenge China with the support of external forces while acquiring economic benefits. It is worth mentioning that some countries in the South China Sea area and certain foreign oil corporations are becoming parties of vested interests.
China’s Oil and Gas Exploitation and Utilization
in the South China Sea
Maritime oil exploitation is an industry with high risk, high technology barriers and high levels of investment. It is estimated that about 4 to 5 billion RMB are necessary to build a medium-sized maritime oilfield. Even before the formal start, hundreds of millions or even billions of RMB are needed to engage in preparatory work.
For a long period, oil and gas extraction and exploitation were hindered by three factors: funding, limitations of deep water prospecting technology and the regional security environment. Because of these factors, China’s oil and gas extraction in the South China Sea has mainly been focused on the northern continental slope, namely the Chinese maritime areas along the Beibu Bay, Hainan Island and the Leizhou Penisular areas free of controversy.
In order to safeguard the peace and stability of the South China Sea, China has exercised restraint when extracting and exploiting oil and gas in the South China Sea, not engaging in activities to expand or complicate the situation. China refrains from engaging in any extraction or development of oil and gas in the deep-water areas of the South China Sea and has put forward the principle of shelving differences and pursuing joint development. The basic spirit of this principle is also enshrined in the “Declaration on the Conduct of Parties in the South China Sea,” signed in 2002, and the “Implementation of the Declaration on the Conduct of Parties in the South China Sea Guidelines,” which was inked in 2011. In 2005, a “Joint Maritime Seismic Undertaking Tripartite Agreement” was secured between China, Vietnam and the Philippines. In line with this agreement, oil companies from China, Vietnam and the Philippines have carried out maritime geological research over an area of 143,000 square kilometers between 2005 and 2008 and obtained some initial results. Regrettably, the principle of seeking joint development has not been implemented effectively due to a lack of sincerity on the part of some countries. China’s restraint has not weakened the illegal extraction undertaken by some neighboring countries, and the agreement was not renewed and eventually terminated.
Unlike Vietnam and the Philippines, who both aggressively grabbed oil and gas resources in the South China Sea as early as the 1970s, China has been exercising restraint all along regarding its territorial disputes. The China National Offshore Oil Corporation (CNOOC) was only established in 1982. At the time, facing a lack of capital and technology, CNOOC decided to team up with foreign-funded oil corporations in shallow water areas. Exchanging market for technology, CNOOC acquired a 51 percent share in an oilfield, as well as some technology. In 1986, CNOOC started to build its first oilrig in the South China Sea. Three years later, China’s first oilfield in the South China Sea went into operation. From 1996 until the present, oil production of CNOOC’s Shenzhen branch company has exceeded ten million cubic meters for ten consecutive years. CNOOCs prospecting and extraction are focused in the shallow waters of Beibu Bay and the Pearl Estuary. In July 2004, China’s Ministry of Land and Resources issued a license to the China National Petroleum Corporation to survey and explore 18 deep-water oil blocks in the southern part of the South China Sea, including areas around the Nansha Islands. In 2005, CNOOC revamped its strategy on South China Sea development, planning to move to deep-water in five years and make necessary preparations for the development of the southern part of the South China Sea by expanding development funding and attracting foreign capital.
On the issue of seeking joint development, CNOOC took its first tentative step in 1992 and signed an oil development contract with Crestone, an American company. The total area covered by the contract is 25,155 square kilometers, and it earmarked an area of 5,076 square kilometers in the east as a reservation. Because of Vietnamese obstruction, however, this contract was never carried out. In 2010, Crestone Company was merged into another American company. Though the contract is still valid, it has been put on hold.
In June 2012, CNOOC announced that it would open nine maritime blocks in the South China Sea for prospecting and development with foreign companies. The depth of these nine maritime areas is between 300 and 4000 meters and the total area is 160.1 million square kilometers, of which seven are in Zhongjiannan Basin, and two are in the area between Wanan Basin and Nanweixi Basin. This measure not only sent an important message to the international community that China was developing oil and gas in the South China Sea, but also further declared China’s sovereignty and showed that China was taking a positive posture on the issue of oil and gas development and utilization in the South China Sea. Between May and July 2014, CNOOC Oil Rig No. 981 started prospecting in the waters around Zhongjian Island, successfully completing its first phase and obtaining related data and oil and gas signs. Though this project met strong opposition from Vietnam, the Chinese government took effective countermeasures to ensure that work proceeded as scheduled. This incident demonstrated the will and determination of China in safeguarding its maritime rights and steadily pushing forward oil and gas prospecting and development in the South China Sea.
In addition, it is worth mentioning that due to the proximity of China’s neighboring countries to oil-rich areas, China has landed in a comparatively disadvantageous position, facing serious security menaces. Regionally speaking, among the three big oil and gas basins in the austral part of the South China Sea – namely, the Wanan Basin, Zengmu Basin and Sabah Basin – China already faces challenges from Vietnam, Malaysia and the Philippines.
China’s Policy Adjustments Concerning Oil and Gas
Extraction and Utilization
Oil and gas resources are non-renewable. Strategic energy security is an unavoidable topic in today’s world. The complexity of the South China Seas issue lies in the overlapping factors of sovereignty disputes and energy aspirations, as well as intertwining links between political and economic interests of neighboring countries and the strategic involvement of external countries. Seen from the perspective of state economic security and energy development strategy, or from the angle of sovereignty in the South China Sea, it is imperative for China to make necessary adjustments to its policy.
Joint development and independent development should be given equal importance
As early as the 1980s, the Chinese government put forth the principle of shelving differences and seeking joint development. Although this principle has encountered a host of obstacles and difficulties, there is no denying that it has played a positive role in maintaining peace and stability in the South China Sea region. Notwithstanding the exclusiveness of oil and gas resource interests, there is still space and room to proceed with joint development. So long as neighboring countries in the South China Sea are sincere and trust one another, they will be able to reach consensus on the development of South China Sea resources. At present, maintaining this principle of shelving differences and seeking joint development is of unique value in safeguarding peace and stability in the South China Sea. Certainly, South China Sea waters are already being carved up by various claimant countries. Given this reality, the possibility of oil and gas development by China – as well as equal sharing of oil and gas utilization – is getting dimmer with each passing day.
Advocating joint development does not mean that China needs to renounce independent development, and this is something that China will not consider. Joint development and independent development are not contradictory, but rather supplementary to one another. The preliminary goal of joint development is to bring about resource sharing between neighboring countries in the South China Sea region while the larger goal is to develop mutual understanding, create positive conditions and lay the ground for final resolution of these disputes. The goal of independent development lies in the maximization of interests among the sovereign states in the South China Sea, safeguarding their rights and interests and exhibiting their respective existences. Proceeding with independent development is therefore conducive to joint development.
Upholding joint development in the South China Sea is China’s inevitable choice as a responsible major power, displaying China’s sincerity to its neighboring countries. Meanwhile, China’s implementation of independent development is an inevitable demonstration of its sovereignty, jurisdiction and maritime rights. In recent years, with the deepening of China’s reform and opening and the elevation of China’s overall national strength, the three big obstacles of capital, technology and security guarantees are being overcome, laying a foundation for the implementation of China’s independent development of oil and gas in the South China Sea.
Just as China’s fast development of social and economic areas has led to growing national strength, China’s maritime petroleum industry has also made considerable headway. The capital problem for the development of oil and gas has fundamentally been solved. Take CNOOC for instance – the total capital turnover in 2013 was reportedly 590.1 billion RMB, with profits totaling 101.4 billion RMB, net profits of 72 billion RMB and total assets reaching approximately 1 trillion RMB. It is evident that China is rapidly upgrading the comprehensive power and social impact of its oil corporations.
In August 2010, the Ministry of Science and Technology and the State Oceanic Administration jointly declared that the Jiaolong manned submersible successfully reached a depth of 3000 meters during a test dive, becoming the fifth country to master submersible technology at a depth of over 3,500 meters, following the United States, France, Russia and Japan. In June 2012, Jiaolong reached a depth of 7,000 meters, meaning that Jiaolong could reach over 99.8 percent of the ocean’s seabed. In 2011, the sixth generation of deep-water oilrig self-designed and built by China was successfully completed. This laid a solid technological foundation for the prospecting and exploitation of oil and gas in the South China Sea.
It is now expected that deep-water oil and gas output in the South China Sea will reach 25 million tons in 2015 and 50 million tons in 2020, thus realizing China’s goal of building a deep-water version of Daqing. This estimate, however, was done solely with consideration to technology. It remains to be seen whether this goal can be achieved on account of the complexity and unpredictability of oil and gas development in the South China Sea.
In line with the acceleration of national defense construction and naval build-up, China’s security environment in the South China Sea could be notably improved. In addition, the introduction of Chinese maritime police forces is going to further enhance China’s maritime law enforcement capabilities, offering safer and more secure safeguards for oil and gas resource development.
In sum, in terms of oil and gas resource development, some things can be done regarding policy adjustments and technological upgrading. First, the prospecting and development of oil and gas in the South China Sea should be incorporated into China’s state energy strategy, and joint development and independent development should be carried out concurrently by carefully balancing domestic and foreign factors.
Adopting independent development as a guide, China should map out a policy of exploration and development, innovate upon related systems and institutions and clarify management rights regarding oil and gas development in the South China Sea. Second, the capability and level of deep-water prospecting and extraction should be continually stepped up by fully utilizing the breakthroughs in deep-diving technology achieved by Jiaolong, as well as the advantages of deep ocean extraction technology achieved by Oil Rig No. 981. Third, efforts should be made to turn Hainan province into a base for resource prospecting and exploitation, as well as crude oil processing. Lastly, a pilot study should be launched in the Xisha and Nansha Islands, setting in motion a substantive oil and gas prospecting and extraction program at an appropriate time. This will effectively alter the China’s passive situation in which it lags behind in oil and gas development in the South China Sea.
Countermeasures aimed at third parties engaging in illegal extraction and development of resources
Since the 1980s, the Chinese government has successively unveiled a series of laws and decrees that govern offshore oil and gas prospecting and exploitation, security management, environmental protection, as well as oil and gas tax and fees. These include the “Regulations on the Exploitation of Offshore Petroleum Resources in Cooperation with Foreign Enterprises” and “Regulations on the Administration of Environment Protection in the Exploration and Development of Offshore Petroleum.”
For example, Article 2 of Chapter One in the “Regulations on the Exploitation of Offshore Petroleum Resources in Cooperation with Foreign Enterprises” stipulates that “all petroleum resources in the internal waters, territorial sea and continental shelf of the People’s Republic of China and in all sea areas within the limits of national jurisdiction over the maritime resources of the People’s Republic of China are owned by the People’s Republic of China.” In such sea areas, all construction, structures and vessels operating to exploit petroleum, as well as the corresponding onshore oil (gas) terminals and bases, shall be under the jurisdiction of the People’s Republic of China. The second article of the “Regulations on the Administration of Environment Protection in the Exploration and Development of Offshore Petroleum” states that “these regulations are applicable to enterprises, institutions, operators and individuals engaged in the exploration and development of petroleum in the sea areas under the jurisdiction of the People’s Republic of China, and the stationary and mobile platforms and other relevant facilities they use.”
Evidently, foreign oilrigs operating in the South China Sea did not obtain the approval of the Chinese government, nor were they put under the supervision and administration of Chinese laws. While encroaching upon China’s maritime rights and interests, they caused damage to resource systems, and posed a potential and realistic threat to the South China Sea maritime environment. Without a doubt, the foreign oil rigs operating in the South China Sea seriously infringe upon China’s sovereignty, as well as its rights of administration, violate China’s related laws and regulations, and run counter to prevailing international practices and the “Declaration on the Conduct of Parties in the South China Seas.”
It is quite understandable that oil corporations seek to profit from oil and gas development, but such profit should not be at the expense of China’s sovereignty or administrative rights. Nor should such corporations ignore China’s legitimate rights and interests because of generous economic benefits offered by neighboring countries in the South China Sea.
Although third party oil corporations engage in cooperative exploration with neighboring countries in the form of bidding, such activities violate China’s sovereignty once their cooperative jurisdiction enters into China’s dotted lines. In line with the Charter of the United Nations and international practice, as well as Chinese laws and decrees, China is entitled to adopt non-military mandatory sanction measures. A third party oil corporation will bear all the consequences arising from illegal exploration and extraction activities that infringe upon China’s maritime rights and interests. Importantly, only by strengthening its monitoring of foreign enterprises involved in South China Sea oil exploitation and making warnings, punishments and sanctions can China’s oil and gas rights and interests in the South China Sea be safeguarded. This will help shift the momentum of illegal exploration and exploitation by China’s neighboring countries in the South China Sea.
South China Sea policy: comprehensive planning, scientific coordination and positive progress
Under the unified leadership, thorough study and research on oil and gas resource surveying and exploration in the South China Sea must be pushed forward. From the perspective of policy, institutions and legislation, efforts should be focused on registering areas and blocks in the South China Sea, perfecting the oil and gas exploration licensing system, and coordinating and safeguarding mechanisms through a state center of basic data on the South China Sea. Meanwhile, private capital must also be involved in oil and gas development. China’s three big oil corporations – China National Petroleum Corporation, CNOOC and China Petroleum and Chemical Corporation – should advance their operations by carefully dividing work and areas and blocks, selecting key areas for two-dimensional or three-dimensional seismic work and arranging oil rigs and related drillings. At the same time, it is imperative for China to integrate oil and gas exploitation in the South China Sea with its efforts to safeguard its stability and rights, and to coordinate between oil and gas development and the development of fisheries. If fishing boats are mobile rights-safeguarding sentries, then oilrigs are front line bulwarks. Oil and gas exploration can be used to demonstrate China’s presence in the South China Sea. While carrying out substantial and sustainable maritime oil and gas exploitation, the development of fishing, safeguarding of the traditional fishing areas and cultivation of warm water fishing resources in the Nansha Islands and Xisha Islands should be strengthened. Furthermore, the pace of such work needs to be accelerated to construct large-scale comprehensive supporting bases for China’s farmers to engage in fishing production supported by China’s preferential terms. In this vein, a new approach of combining safeguarding stability with safeguarding rights could be blazed by linking oil and gas development with fishing resource development, thus effectively safeguarding China’s sovereignty in the South China Sea.
As far as the prevailing situation in the South China Sea is concerned, neighboring claimant countries benefit greatly by China’s difficulties in exploiting oil and gas in the South China Sea. While safeguarding peace and stability and seeking effective ways to resolve sovereignty disputes, policy adjustments should be employed to push forward China’s oil and gas exploitation and development in the South China Sea. In a sense, China’s resource exploration and development in the South China Sea is not only an inevitable requirement for it to safeguard its maritime rights and interests and strengthen its energy security strategy. It is also an inevitable requirement for getting things done and blazing a new strategy to resolve disputes in the South China Sea.