FOCUS ON CHINA : JURISDICTIONAL CLAIMS, CURRENT PETROLEUM DEVELOPMENT

Abstract

China has made extensive claims to the offshore resources in the Yellow Sea, the East China Sea and the South China Sea. In the East China Sea, China claims sovereignty over the entire continental shelf. South Korea, Japan and Taiwan also claim seabed rights on the continental shelf. These claims overlap particularly in the prospective oil-bearing area west of the Okinawa Trough. The relevant principles of international law advanced by these countries in support of their respective claims are also examined. The disputes involve a complex mix of political, economic, legal, historical and cultural factors. In the South China Sea the disputes mainly concern the ownership of islands as distinct from competing claims to the continental shelf in the East China Sea. The most significant of these disputes is between China and Vietnam and particularly concerns the Parace and Spratly Islands.

The People's Republic of China is determined to become a major world oil producer. The technology and huge finance required to achieve this objective must be obtained by co-operating with foreign sources. In order to co-ordinate this activity, the Chinese have established a complex petroleum administration. Examination of China's recent production history and ambitions demonstrates the need for China to seek foreign assistance to obtain production targets. China has recently concluded geophysical agreements with foreign entities in eight offshore areas. In addition, it has concluded an ambitious exploration/development agreement with Japan National Oil Corporation. The experience of industry in dealing with Chinese authorities with special emphasis on negotiating techniques is briefly described.