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Background Brief South China Sea: Chinese & American Scientists Cooperate to Explore for Oil Resources Carlyle A. Thayer February 6, 2014

[client name deleted] Chinese and American scientists and others are on a scientific ocean drilling expedition in the South China Sea, which is expected to pave the way to map oil and gas fields in the area. See: http://www.scmp.com/news/china/article/1414557/chinese-led-internationalmission-explore-south-china-sea-oil Particularly, they will do the drilling in disputed areas. According to the report, the scientists have got permission from the Philippines and China but are awaiting a response from Vietnam. We request your assessment of the following issues: Q1. Why do you think China and the Philippines gave a quick decision on this matter but not Vietnam? Do you think it is part of China's efforts to push for joint development in disputed areas in the South China Sea? How do you expect Vietnam will respond? ANSWER: China has always promoted joint development in principle, but in October last year it really revived its push for joint development during visits to the region by President Xi Jinping and Premier Li Keqiang. The Philippines too has given some support to joint development but outside of Recto (Reed) Bank. While the Philippines has been mainly confrontational in its stance towards China it has always kept the door open to this form of cooperation. A scientific expeditions may be viewed as an activity approved under the 2002 Declaration on Conduct of Parties in the South China Sea. The Philippines actions may also help deflect some criticism within ASEAN. China and Vietnam reached agreement last year to step up cooperation with priority to waters outside the mouth of the Gulf of Tonkin. But Vietnam has preferred to engage in only low-level tangential cooperation up to now. The two sides extended cooperation in the Gulf of Tonkin. Vietnam is taking so long to make up its mind because of the extreme sensitivity of joint cooperation in disputed areas. This was an area of contention in the first half of the 1990s around Wan Anbei/Tu Chinh reef off Vietnams southeast coast.

2 Q2. Through this research, do you think China and the United States are cooperating closely with each other to jointly explore for energy resources in the South China Sea, though they seem to compete against each other in political and military terms in the region? We believe that China and the US have reached an initial compromise over the South China Sea issues, at least in energy search in the area. ANSWER: The Obama Administration since it first came to office has been at pains to protect U.S. oil companies against Chinese pressures. That is why unimpeded lawful commerce is included in the paragraph of U.S. interests alongside freedom of navigation and overflight. The U.S. government views cooperation for joint development as contributing positively to the regional security environment. U.S.China cooperation add a special bonus because it contributes a degree to lowering friction in their bilateral relations. The U.S. government also sees an economic interest in having U.S. oil companies engaged with China and Vietnam. The current efforts should be viewed as a revival of a long-standing program that began before tensions over territorial disputes really heated up (2009 and after). The climate is more conducive today than before. China and ASEAN will resume their consultations on a Code of Conduct in April.

Suggested citation: Carlyle A. Thayer, South China Sea: Chinese & American Scientists Cooperate to Explore for Oil Resources, Thayer Consultancy Background Brief, February 6, 2014. All background briefs are posted on Scribd.com (search for Thayer). To remove yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key. Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. Thayer Consultancy was officially registered as a small business in Australia in 2002.

Thayer Consultancy
ABN # 65 648 097 123

Background Brief South China Sea: Multinational Scientific Expedition Sets Sail Carlyle A. Thayer February 9, 2014

[client name deleted] WE have an issue that needs to seek your expertise regarding the recent incident in which China sponsored a US ocean research ship called "Joides Resolution" to explore and do scientific drilling research in the South China Sea from 26/01 to 04/04/2014. This is a matter of concern to us even though according to the U.S the drill venues are outside Vietnam's Exclusive Economic Zone (EEZ). The U.S asked permission from Vietnam and invited Vietnam to dispatch officers to join the research. Could you please provide us your evaluation of the incident of joint-research carried by the US and China? Should Vietnam send staff to join this research expedition? How should Vietnam react to this development? ANSWER: The International Ocean Discovery Programme (IDOP) is a long-standing one set up by the United States and dating back to the 1960s; IDOP was particularly active in the 1980s. IDOP is funded by scientific research organisations that are in turn funded by their governments. The Australian contributions come from many leading universities and research institutes. The research vessels used by IDOP have been provided by the U.S. National Science Foundation; Japans Ministry of Education, Culture, Sports, Science and Technology; and the European Consortium for Ocean Research Drilling (representing the EU countries). Other major contributors include the Interim Asian Consortium, represented by the Korea Institute of Geoscience and Mineral Resources (KIGAM), Australian-New Zealand IODP Consortium (ANZIC), India Ministry of Earth Science (MoES), Coordination for Improvement of Higher Education Personnel (CAPES) and since 1998 the People's Republic of China Ministry of Science and Technology (MOST). The area of current exploration is shown below. The map was taken from the IDOP homepage. The current expedition was proposed by Chinese scientists in 2008 and approved when the Chinese government offered to provide seventy percent of the costs (US $6 million). The media report that dozens of proposals were submitted for the 2013-

2 2023 research program and that the current program did not receive the most votes. It was approved because of Chinese funding. The reports you are referring to are about the commencement of a scientific expedition and are not an incident. The current expedition involves thirty-one scientists (primarily geologists) from ten countries, with China providing the largest number, thirteen (plus one for Taiwan) and the United States providing nine. The Philippines has one observer. The scientists will be based on and conduct their research from the JOIDES Resolution drilling ship, provided by the United States National Science Foundation.

Scientists will conduct drilling at three sites to obtain rock and sediment samples. The locations are shown on the map above (primary sites, backup primary sites, and alternate sites). The samples will be taken onl in areas where the governments concerned have given permission. The data from this expedition will be used to reconstruct the evolution of the sea bed (tectonic plates) in the South China Sea and will be shared globally. Research from this expedition will provide a basis for locating oil and natural gas deposits. A previous IDOP scientific expedition was conducted in the South China Sea in 1999. It gathered data on climate and environmental changes and information useful for locating oil fields in the northern part of the South China Sea. In 2013 China submitted a proposed for more research in this area. Vietnam should make institutions is without China have agreed in development) Vietnam clear that any form of participation by its scientists or prejudice to its sovereignty claims. Because Vietnam and principle to cooperate for mutual development (joint could welcome this expedition as a confidence building

3 measures in the spirit of the Declaration on Conducts of Parties in the South China Sea. In this regard, it should be recalled that Vietnam first objected to the ChinaPhilippines Joint Marine Survey Undertaking (JMSU) but later permitted PetroVietnam to participate (2005-2008). My recommendation is that Vietnam should pick a pertinent organisation, a government department, research institute or university and become an affiliate member according to Vietnams financial means. It is probab ly too late for Vietnam to join this particular expedition although enquiries could be made to have a scientists on stand-by should a vacancy occur. Vietnam should then provide observers for future expeditions to monitor the research activities and report back on the findings. This would demonstrate Vietnams willingness to engage in cooperative activities that have a regional benefit.

Suggested citation: Carlyle A. Thayer, South China Sea: Multinational Scientific Expedition Sets Sail, Thayer Consultancy Background Brief, February 9, 2014. All background briefs are posted on Scribd.com (search for Thayer). To remove yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key. Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. Thayer Consultancy was officially registered as a small business in Australia in 2002.