China, Philippines stoke island tensions

The Philippines stirred a diplomat hornet’s nest with China and others when it passed a new law this month that defines its national maritime boundaries to include the long-disputed and potentially fuel-rich Spratly islands in the South China Sea.

The contested islands are believed to contain significant oil and gas deposits, though estimates vary. The first major Philippine oil discovery within the Spratly Islands occurred just off the coast of Palawan in 1976.
China’s Geology and Mineral Resources Ministry has predicted that the Spratly area holds oil and natural gas reserves of 17.7 billion tons, which if compared to the 13 billion tons held by Kuwait, would make the islands the fourth-largest reserve bed in the world.

The competing claimants to sovereignty have not awarded offshore production concessions in the islands, for fear of provoking possible military clashes.

One former Philippine government official told Asia Times Online that the Galoc gas field in Palawan, which was tentatively to be managed by a consortium of British investors, was recently challenged by Beijing, which warned Manila against granting any legally binding concessions or permits.

Asia Times