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Second Workshop on the Geology and Hydrocarbon Potential of the South China Sea and Possibilities of Joint Development*

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Second Workshop on the Geology and Hydrocarbon Potential of the South China Sea and Possibilities of Joint Development* Second Workshop on the Geology and Hydrocarbon Potential of the South China Sea and Possibilities of Joint Development* Workshop Report by C.Y. Li and Mark J. Valencia October 1983 sdat the East-West Center, Honolulu, Hawaii, 22-26 August 1983; organized by theEnvi- ind Policy Institute of the East-West Center, cosponsored by the ASEAN Council on Pe• ine Committee for Co-ordination of Joint Prospecting for Mineral Resources in Asian ffshore Areas (CCOP), and the Intergovernmental Oceanographic Commission. CONTENTS Foreword 1 Introduction 3 Workshop Conclusions and Recommendations 5 Offshore Oil and Gas Development and Potential in Areas Related to the South China Sea .5 Marine Geology and Geophysics of the South China Sea 6 Implementation of the SEATAR Program 6 Joint Development 7 Cooperation among ASCOPE, CCOP, IOC, and EAPI/EWC 8 Summary of Presentations and Discussions 9 List of Contributed Papers 9 Update on Offshore Hydrocarbon Development and Potential in Countries Bordering the South China Sea 10 Geology and Geophysics of the South China Sea Area 16 Assessment of Undiscovered Recoverable Hydrocarbon Resources 20 Joint Studies, Research, and Investigation of the South China Sea Area 21 Environmental Aspects of Offshore Hydrocarbon Exploration and Exploitation . 22 Changes in the Oil Market 25 Joint Development 26 Appendices Appendix 1. List of Participants 29 Appendix 2. Workshop Agenda 32 FOREWORD The Environment and Policy Institute vironment and Extended Maritime Jurisdic• (EAPI) of the East-West Center was established tions to study critical transnational resource in October 1977 to conduct research and edu• and environment issues in Southeast Asian seas. cation programs through multinational collab• In the early stages of this project, it was de• oration on environmental aspects of policy and termined that future oil exploration and devel• decision making in the East-West Center re• opment in the South China Sea could have gion. The program of the Institute emphasizes significant implications for international rela• (1) analysis of various policies (e.g., economic tions and for environmental quality and the development, maritime jurisdiction) to illumi• productivity of aquatic resources. Trying to as• nate their dependence and impacts on natural sess these implications, it became clear that systems and thus on the objectives of the poli• more had to be learned about the geology and cies, and (2) assessment of scientific and tech• hydrocarbon potential of the South China Sea nical information about natural systems for in order to project activities that might occur more coherent policy formulation and imple• in the coming years. EAPI was fortunate in at• mentation through planning and manage• tracting Dr. C.Y. Li to the Center as a Fellow to ment. This systematic approach avoids the po• develop activities to address these questions. larization of environmental values versus In 1980, a first international Workshop was sectoral goals. held on this subject. The results were widely The marine environment represents a major disseminated and many recommendations resource for the countries of the world as they were acted upon. As a follow-up, Dr. Li orga• strive to meet a variety of needs on a sustained nized the second Workshop in August 1983. basis. Concerns such as environmental quality, This Workshop was attended by 50 leading viability offish stocks, and orderly exploitation authorities and experts drawn from govern• of hydrocarbons are important priorities as mental and intergovernmental organizations, countries consider individual and collective multinational oil companies, and academic in• strategies for effective utilization of the oceans. stitutions in 12 countries. Persons attended EAPI has undertaken a project on Marine En• and participated in the meetings in their indi- 1 vidual capacities and did not represent or subscribes to every statement, although a speak for their organizations or countries. The broad consensus was reached on most major blend of perspectives and expertise at this in• points. formal meeting resulted in an exchange of in• Through this and future publications and in formation that is generally not possible among follow-up meetings, we anticipate that the such groups, who rarely meet in a neutral ex• work begun will continue and reach a wider ploratory setting. audience. In this way, we hope we are contrib• This report of the Workshop's findings, con• uting to a creative resolution of issues that are clusions, and recommendations presents the vital to the national and international interests spectrum of views expressed at the meeting. It of countries in the region. should not be assumed that every participant William H. Matthews, Director Environment and Policy Institute East-West Center 2 INTRODUCTION The East-Wesi Center lias a mandate lor the since then, the Environment and Policy Insti• exchange of cultural and technical knowledge tute (EAPI) of the East-West Center (EWC), af• between the East and West. Its Environment ter consultation with participants in the first and Policy Institute (EAPI) has a program area Workshop, decided to convene the second on Marine Policy and Environment, which has Workshop at the East-West Center in Honolulu focused primarily on the Southeast Asian Seas on 22-26 August 1983. in recent years. This program area explores In addition to the Committee for Co-ordina• the precedents and possibilities lor joint devel• tion ofjoint Prospecting for Mineral Resources opment of hydrocarbon potential in the South in Asian Offshore Areas (CCOP), which was China Sea in areas of overlapping claims, the cosponsor of the first Workshop, the through research, exchange of information, ASEAN Council on Petroleum (ASCOPE) and and the provision of a neutral forum for rele• the Intergovernmental Oceanographic Com• vant discussions. The two Workshops on Geol• mission (IOC) joined ascosponsors for the sec• ogy and Hydrocarbon Potential of the South ond Workshop. This active role was welcome, China Sea and Possibilities of Joint Develop• because ASCOPE consists of five member ment were organized for this purpose. countries bordering the sea and IOC has long The First Workshop on t he Geology and Hy• been interested in the marine geology and drocarbon Potential of the South China Sea geophysics of the area, an interest reinforced and Possibilities of Joint Development was held by IOC's new programs on ocean science in re• in August 1980. Some 50 leading authorities lation to nonliving resources. and experts from countries bordering the EAPI has also joined ASCOPE and CCOP in South China Sea, academic institutes, and na• convening two workshops on offshore oil and tional and multinational companies partici• gas environmental guidelines. Two booklets, pated. The proceedings were published as a one on environmental planning guidelines and special issue of Energy (v. 6, n. 11) and as a the other on technical guidelines, were pub• book by Pergamon Press (Oxford, 1981). That lished by EAPI. A joint workshop was also or• Workshop recommended that a series of fol• ganized by the ASCOPE Indonesian Technical low-up meetings be convened on the geologi• Committee and EAPI. Close cooperation cal, technological, environmental, economic, among ASCOPE, CCOP, IOC, and EAPI has and legal aspects of exploration and exploita• been established and should be used for fur• tion of hydrocarbons in the South China Sea. ther research, information exchange, and Since the first Workshop, hydrocarbon explo• workshops. ration by national and multinational oil com• The South China Sea and its margins are a panies in the South China Sea has reached its frontier in the search for hydrocarbon re• highest level, yielding new information about sources. The second Workshop provided the the petroleum geology and potential in the re• forum for a mutual exchange of updated in• gion. Because of these recommendations and formation. The Workshop not only considered the new developments that have taken place the hydrocarbon potential of the area in gen- 3 eral terms but also delineated particular areas Then the technology and investment of mul• with potential. Further, the meeting identified tinational oil companies could play an impor• areas where exploration could take place un• tant role. Under mutually acceptable condi• der current oil prices and existing technology, tions, the countries bordering the sea welcome and areas that could be developed when econo• the participation of foreign companies in as• mies and technology advance. sessing, exploring, and producing offshore hy• Present offshore oil production in the region drocarbon resources. In many areas of the sea is from water less than 200 meters deep (conti• with hydrocarbon potential, jurisdictional nental shelf), and there are still a large number claims of countries overlap. For these areas of sedimentary basins under the continental more geological and geophysical data are re• shelves waiting to be explored. Thus even un• quired, and joint studies, research, and investi• der current oil prices, prospecting and explo• gations would be desirable — for some areas, ration will not be seriously affected. Technol• essential. There are several examples of agree• ogy is advancing rapidly; elsewhere, drilling is ments on joint exploration and development taking place under water depths of over 2,000 between states in such situations, including meters. Economics permitting, there is little that between Malaysia and Thailand, and these doubt that drilling in the
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