Legal Committee - World Model United Nations

useful guidance on how to proceed. The acceptance of such
documents, such as the ratification of the Law of the Sea
Convention in Beijing, is an important step toward achieving
a negotiated settlement in the Spratly Islands dispute. The
South China Sea has received an increasing level of attention
in direct proportion to the increase in estimates of the
area’s resource development potential. There had been little
attention granted to the region until the 1960s and 1970s,
when international oil companies began prospecting the
region. 84 Along with increasing speculation about possible
hydrocarbon resources, claimants have grown increasingly
anxious to reinforce their claims, leading to heightened
tensions and periodic conflict. Although hydrocarbon
potential has been a main focus of the claimants, fisheries
and other marine resources, navigational safety, and strategic
and environmental concerns are also critical issues.
Natural Resources
The most attention regarding the South China Sea has
centered on its oil and natural gas reserves. Most of the
sea’s adjacent countries have been found to have oil deposits.
The South China Sea region is estimated to have about 7.5
billion barrels of oil. 85 Current oil production totals to over
1.3 million barrels per day, half of which is accounted for by
Malaysia, and the past few years have seen a gradual rise in
total South China Sea production. 86 The rich oil deposits of
the surrounding areas have contributed to speculation that
the Spratly Islands may be an untapped oil-bearing province.
As they are close to some of the world’s greatest future
energy consuming countries, this would prove invaluable in
controlling the rising cost of oil and helping to alleviate the
energy crisis. While, there is little evidence outside of Chinese
claims to support these speculations, the possible strategic
value of the islands has fueled conflict over their ownership.
Due to all the conflict surrounding the area, exploratory
drilling has not been feasible. Therefore, there are no proven
oil reserve estimates or discovered commercial oil or gas in
the Spratly and Paracel Islands. Interest in the area has been
primarily encouraged by the optimistic Chinese estimates of
the area’s oil potential, the most optimistic suggesting that
potential oil resources of the Spratly and Paracel Islands
could be as high as 105 billion barrels of oil, and that the
total for the South China Sea could be as high as 213 billion
barrels. 87 However, non-Chinese analysts have estimations
far from these figures. The most optimistic Western estimates
are 1-2 billion barrels. 88 If all of this was economically
recoverable, this would yield a peak oil production level for
the Spratly Islands of 180,000 - 370,000 barrels per day, as
high as the current production levels in Brunei or Vietnam,
yet realistically the total could be significantly less. 89
Despite all the attention on the South China Sea’s oil reserves,
most of the hydrocarbon fields explored in the regions of
Brunei, Indonesia, Malaysia, Thailand, Vietnam, and the
Philippines contain natural gas, not oil. Studies by the USGS,
as well as other research, indicate that about 60-70% of the
region’s hydrocarbon resources are gas. 90 This would prove
extremely important as natural gas usage in the region is
projected to increase by 5% over the next two decades,
getting as high as 20 trillion cubic feet (tcf) per year, which
could become even greater if additional infrastructure is
established. 91
Malaysia is both a dominant oil producer and gas producer
in the region. 92 While outside countries have lagged in their
gas production due to a lack of infrastructure, natural gas
exploration activity has also thrived elsewhere, especially
in the Gulf of Thailand, claimed by Cambodia, where five
companies signed conditional exploration agreements.
China has intensified its development of offshore fields such
as Yacheng. Indonesia has discovered the large Natuna gas
field. Malaysia has found the Lawit field in June 1997, and
Vietnam has made a series of discoveries in the Nam Con
Son basin southeast of Vietnam that were expected to greatly
increase its reserves. 93
The natural gas resources of the South China Sea also vary
greatly. Estimates of one China report hold that there are
225 billion barrels oil equivalent of hydrocarbons in the
Spratly Islands alone. If 70% of these hydrocarbons is gas,
total gas resources would be almost 900 Tcf, which would
imply potential production levels for the Spratly Islands to
be almost 1.8 Tcf annually. Another Chinese report estimates
that the entire South China Sea contains more than 2,000 Tcf
of natural gas resources. The most optimistic non-Chinese
report has estimated total gas resources in the Spratly Islands
at 24 Tcf. The USGS has estimated the discovered reserves
and undiscovered resources in the offshore basins of the
South China Sea to total in at 266 Tcf. 94
Oil and Gas in the South China Sea Region
Asia’s shooting energy demands places a great importance
in the South China Sea area’s resources. Energy
consumption is expected to double by 2030, with China
accounting for half of this increase. 95 With the energy crisis
worsening and gas prices booming, the South China Sea will
prove an important indicator of the surrounding nations’
economic strength. China’s adamant claims to sovereignty
Harvard WorldMUN 2012 Legal 21