Map of the competing territorial claims in the South China Sea

The South China Sea’s energy dimension

  • The global energy paradigm has changed, making “deepwater” investments less profitable
  • Nevertheless, China is still pursuing oil and gas projects in the South China Sea
  • It uses these projects to justify territorial claims
  • If Beijing succeeds, nearly all its neighbors’ oil and LNG imports will become dependent on Chinese policy

The world has entered a new era of oil and gas oversupply, reducing competition for energy resources and making many deepwater projects in the South China Sea unprofitable. But China remains committed to asserting its territorial claims in the region by expanding civilian and military infrastructure and promoting deepwater projects, regardless of profitability or international law. The result could be a regional order increasingly defined by Beijing. In July 2016, the Permanent Court of Arbitration (PCA) in The Hague rejected China’s “historical” territorial claims in the South China Sea. That posed a critical question to Chinese maritime policy, which is reexamining long-held principles over the country’s military presence abroad, spheres of influence, buffer zones and security alliances.

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Dr. Frank Umbach
A scenario where demand for oil peaks within the next 15 years can no longer be considered impossible
read more about it in the report
What's inside
  • The global energy paradigm has changed, making “deepwater” investments less profitable
  • Nevertheless, China is still pursuing oil and gas projects in the South China Sea
  • It uses these projects to justify territorial claims
  • If Beijing succeeds, nearly all its neighbors’ oil and LNG imports will become dependent on Chinese policy
Who will benefit?
  • Report is targeted to the decision makers in cross country manufacturing – suppliers, manufacturers, logistics.
  • Also considered useful for the administrative university facilities, to better understand the possibe effects of current decisions.
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