China tests troubled waters with $1B rig for S.China Sea (spartlys, scarbourough)

[timrev]

http://www.abs-cbnnews.com/-depth/06...rig-schina-sea
State oil firm dubs rig "mobile national territory"

HONG KONG - China has spent nearly $1 billion on an ultra-deepwater rig that appears intended to explore disputed areas of the South China Sea, one of Asia's most volatile hotspots and where the United States is strengthening ties with Beijing's rival claimants.

For now, the locally built Haiyang Shiyou (Offshore Oil) 981 rig owned by China's state-run CNOOC oil company is drilling south of Hong Kong in an area within Beijing's ambit.

But Chinese energy experts say Beijing will eventually move its first ultra-deepwater rig to explore in deeper and more oil-rich waters further south in the South China Sea, where China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei have overlapping territorial claims.

"With Chinese offshore drilling technology improving, it is just a matter of time for them to enter the central and southern part of the South China Sea," said Liu Feng, senior researcher at the state-backed National Institute for South China Sea Studies.

Asked whether CNOOC would move the rig to disputed waters, Lin Boqiang, professor and director of the China Center for Energy Economics Research at Xiamen University, said: "I feel they will ... If CNOOC does not do it, other countries will do it. So why (should) CNOOC not do it?"

The deepwater area of the South China Sea remains untapped, largely because tensions between rival claimants have made oil companies and private rig-builders reluctant to explore contentious acreage well away from sovereign coastlines.

CNOOC, or the China National Offshore Oil Corp, is an $89 billion company with oil and gas assets in Indonesia, Iraq, Australia, Africa, North and South America, as well as China.

It declined comment on whether it would move the 981 rig into disputed waters, although the company described the vessel as "mobile national territory" when it began drilling 320 km (200 miles) south of Hong Kong last month.

That sparked concerns that China's quest for oil and gas to feed its economy would push Beijing into the disputed zone of the South China Sea and potentially a confrontation with other claimants.

"Large deepwater drilling rigs are our mobile national territory and strategic weapon for promoting the development of the country's offshore oil industry," the official Xinhua news agency quoted CNOOC Chairman Wang Yilin as saying.

In response, Vietnam called for mutual respect of international law governing exploration in the South China Sea, which it calls the East Sea.

"Activities in the East Sea by countries must abide by international laws ... and must not infringe upon sovereignty, sovereign rights and national jurisdiction of other countries," said Luong Thanh Nghi, spokesman for Vietnam's foreign ministry.

Vietnam and the Philippines have been the most vocal opponents of China. Last week, both China and the Philippines pulled back vessels from a group of rocks in the sea called the Scarborough Shoal, ending a two-month stand-off. Both cited bad weather as the reason.

The United States has a long-standing relationship with the Philippines and is also strengthening ties with Vietnam.

Defense Secretary Leon Panetta was in Vietnam this month and during a tour of the deep water port of Cam Ranh Bay, a key U.S. base during the Vietnam War, he said the use of the harbour would be important to the Pentagon as it moved more ships to Asia. Secretary of State Hillary Clinton is also due to visit Hanoi next month.

RICHES BELOW THE SEA

Rich hydrocarbon resources are believed to lie below the centre and south of the South China Sea, which is in the disputed zone. Estimates for proven and undiscovered oil reserves in the entire sea range from 28 billion to as high as 213 billion barrels of oil, the U.S. Energy Information Administration said in a March 2008 report.

That would be equivalent to more than 60 years of current Chinese demand, under the most optimistic outlook, and surpass every country's proven oil reserves except Saudi Arabia and Venezuela, according to the BP Statistical Review.

Chinese state media have called the South China Sea "the second Persian Gulf".

In a report last month, Xinhua news agency said about 70 percent of the oil and gas resources in the South China Sea were believed to exist in deep water.

Geologists have said most oil and gas resources likely lie in areas where the sea floor is between several hundred metres and 3,000 metres deep, although parts are up to 4,700 metres deep.

Using the 981 rig, China is capable of drilling for oil in waters as deep as 3,000 metres for the first time. The rig is now drilling at a depth of only 1,500 metres, another reason experts say it is likely to be moved further south.

China had to wait for its own ultra-deepwater rig as private rigs were unavailable for hire because of a global exploration boom. Utilisation rates of deepwater rigs, including semi-submersibles and drill ships, have been in the range of 90-100 percent.

The equipment shortage has also deterred foreign companies from exploring the deep water of the South China Sea, in addition to their reluctance to venture into disputed territory.

"If you can drill in West Africa and the Gulf of Mexcio, Brazil and North Sea, why come to the South China Sea?" said Gordon Kwan, head of Energy Research at Mirae Asset Securities.

LOOKING SOUTH

China, the world's largest energy user, is already relying on imports for over half of its oil needs. It has long hoped to expand deepwater exploration in the South China Sea as onshore production growth sags.

So far, the offshore exploration of CNOOC and the other two Chinese state oil giants PetroChina and Sinopec Corp has been largely limited to waters along or close to China's continental shelf. Foreign firms like Husky and Eni hold offshore deepwater production sharing contracts with CNOOC.

But deployment of the CNOOC rig and suggestions China has developed the expertise needed to build complex ancillary equipment, including pipe-laying ships, signals the exploration could move south.

CNOOC, which derives nearly all its domestic output from shallow waters, has vowed to build deepwater capacity of one million barrels of oil equivalents per day by 2020, more than doubling the company's total production.

"Is CNOOC doing this because they desperately need to deliver production growth? Absolutely," said Simon Powell, head of Asian Oil and Gas Research at CLSA. "Are they also doing it at the government request to plant the national flag so to speak? I have no idea."

Any decision to push into disputed waters will be taken by policymakers in Beijing, not CNOOC. Some industry observers say any exploration is unlikely in the area while tensions remain high.

MORE THAN GEOPOLITICAL RISK

Still, CNOOC, which has struggled to deliver production growth, may want to exploit nationalistic sentiment to drum up state support for its deepwater exploration agenda, analysts said.

"Chinese state media seemed to be excited by the rig, the technology," said Li Mingjiang, an assistant professor and a China expert at Singapore's Nanyang Technological University. "By playing up nationalism, it could help CNOOC gain more state policy support, more investment."

The big risk for CNOOC is that no one knows how hydrocarbon deposits are spread across the sea-bed.

Discoveries near the coasts of Southeast Asian countries in recent years were mostly natural gas, reinforcing the belief among geologists and explorers there should be more gas than oil in the South China Sea.

Natural gas yields much lower returns than oil because gas is generally cheaper but costs much more to produce, store and transport.

"Aside from geopolitical risk, the bigger question is if 981 finds anything, is it more likely to be gas than oil?" CLSA's Powell said. "If they find natural gas in 1 or 2 km (deep) waters, then it could very likely be stranded gas. In other words, it is uneconomic."

[timrev]

lumabas na list of pinoy billionaires....

sana isa sakanila start ng magdrill baka maunahan pa tayo ng china....
at sana tayong mga pinoy makinabang sa masisipsip ng langis

[uls]

mga billionaire dito would rather build malls and condos than look for oil

[pop3corn]

the US is not concerned about territorial oil naman eh. what they're concerned about is what happens if the world's population starts to the accept the idea that fossil fuel is as abundant as water. there is oil in canada, in russia, in mainland US, in south america, in middle east, and now here in our region.

dyan kasi ang kulit ng China eh. bumili na lang kasi sila sa middle east. by portraying fossil fuel as scarce, nagkakaroon ng economy ang mundo. if fossil fuel as as readily available as water or animals, then we might as well go back to stone age

[uls]

so there's no point in investing in alternative diba?

dami oil eh

aanuhin mo yung alternative energy when oil is so abundant

[pop3corn]

so there's no point in investing in alternative diba?

dami oil eh

aanuhin mo yung alternative energy when oil is so abundant

alternative energy is just invented by people who believe that oil is scarce. cause and effect eh. oil cartels wanna show to the world that oil is scarce, and therefore they have profits. and so others want to find alternative sources of energy to get free from monopoly, and they don't wan't na mahawakan sa leeg ng oil cartels.

but the thing is fossil fuel is all around the earth. if dinosaurs dated a million years ago, and yun mga una-una buto buto ng man that was unearthed was like almost millions of years ago. it only shows that earth has been a habitat of so many civilizations. parang THE matrix, may reset lagi, in our case, lagi nagugunaw ang mundo thru a catastrophic disaster, kahit i-record mo pa yan mga accomplishments ng civilizations na yun, wala din burado din yun kung may periodical cosmic catastrophic change ang mundo. kaya wala ng kwenta pa i-archive ang history natin or mag-save ng artifacts coz in the next doomsday scenario wiped out din yan.

after that doomsday scenario, our remains and the remnants of our civilization will add up to the next fossil fuel requirements of the civilization say millions years into the future.

energy is everywhere, it's not wasted. when we die, we thought our decaying bodies no longer possess energy. pero ito yun maging fuel ng next generations, and hence, fossil fuel.

---------------------

Fossil fuel is safest energy to be harnessed coz waste lang ito ng mga ninuno natin. there's nothing cosmic about it, so therefore hindi delikado na sirain natin sarili natin mundo. mas delikado pa nga if we harness the energy from light, as is lasers coz pag na-mishandle natin yan, baka magunaw tayo lahat and therefore man-made. as what happened in the mythical city of Atlantis. they harnessed the power of the light, eh kaya lang bec. their society is somewhat political din and they like sodomy so much, mga bakla ang naghari sa mundo nila. and when homo***uals ang powers that be ng Atlantis, nun nag-aaway sila mga bakla, they used their greatest energy source, LIGHT and used against each other. kaya very swift din ang gunaw ng mundo nila. Kaya nga may illuminati eh or to translate in English, light. they are guardians sa society natin that will make sure that WE WILL NEVER HARNESS the power of the light coz of self-destructive capabilities, at mag-settle na lang ang civilization natin sa fossil fuel, which is much much safer to handle.

eh kaya lang etong China hindi nya naiitindihan ang consequences ng pinag-gagawa nya. i-disturb nya ang balance ng mundo kasi gusto niya makatipid sa production by sourcing out her own oil. delikado yan. just to tell the world the South China sea is rich in oil will only invite wars here, kasi oil is for the taking. at pano na ang economy natin and wall street na naka-hedge sa oil and man's consumption.

okey ang ginagawa ng china if we need to harness so much energy at limited time dahil for example, we are going to be invaded by aliens soon. pero wala pa naman ganun threat eh

[safeorigin]

^This man speaks the truth!

[tomboy]

Clueless ako dito sa mga technicality na oil and natural gas......Kung papipiliin sino mas importante at ano mas ok sa dalawa na yan?

[pop3corn]

^ a lot of people say that the pollution produced by fossil fuel can damage our environment and nature itself. totoo naman talaga yun it will unbalance, but nature will correct itself. the earth or nature for that matter is like our human body, pag may imbalance, magkakarun ng turmoil sa katawan but eventually it will correct itself.

pero to say that in just 2 centuries of using fossil fuel, eh nawala na daw ozone layer and that our rainforests are thinning etc. eh talaga katawa-tawa. man, if we are like 5 billion now together with our waste of fossil fuel can never ever damage the earth.

kasi yun naman fossil fuel eh from the earth din naman. it's not alien matter. the same fossil fuel is generated by ancient products of the earth.

you know what is potentially damaging, yun atomic and nuclear bomb bec. they use uranium and plutonium. these matters are not from this earth, and therefore alien in origin. bakit napunta sa'tin, coz dinala ito ng mga meteors na nag-impact sa earth throught the course of time. and kita mo ang effect ng atom bomb, swift destruction and ano fallout, radiation. radiation is very damaging to life forms here bec. radiation is a cosmic energy na dapat nasa space.

[Verbl Kint]

alternative energy is just invented by people who believe that oil is scarce. cause and effect eh. oil cartels wanna show to the world that oil is scarce, and therefore they have profits. and so others want to find alternative sources of energy to get free from monopoly, and they don't wan't na mahawakan sa leeg ng oil cartels.

but the thing is fossil fuel is all around the earth. if dinosaurs dated a million years ago, and yun mga una-una buto buto ng man that was unearthed was like almost millions of years ago. it only shows that earth has been a habitat of so many civilizations. parang THE matrix, may reset lagi, in our case, lagi nagugunaw ang mundo thru a catastrophic disaster, kahit i-record mo pa yan mga accomplishments ng civilizations na yun, wala din burado din yun kung may periodical cosmic catastrophic change ang mundo. kaya wala ng kwenta pa i-archive ang history natin or mag-save ng artifacts coz in the next doomsday scenario wiped out din yan.

after that doomsday scenario, our remains and the remnants of our civilization will add up to the next fossil fuel requirements of the civilization say millions years into the future.

energy is everywhere, it's not wasted. when we die, we thought our decaying bodies no longer possess energy. pero ito yun maging fuel ng next generations, and hence, fossil fuel.

---------------------

Fossil fuel is safest energy to be harnessed coz waste lang ito ng mga ninuno natin. there's nothing cosmic about it, so therefore hindi delikado na sirain natin sarili natin mundo. mas delikado pa nga if we harness the energy from light, as is lasers coz pag na-mishandle natin yan, baka magunaw tayo lahat and therefore man-made. as what happened in the mythical city of Atlantis. they harnessed the power of the light, eh kaya lang bec. their society is somewhat political din and they like sodomy so much, mga bakla ang naghari sa mundo nila. and when homo***uals ang powers that be ng Atlantis, nun nag-aaway sila mga bakla, they used their greatest energy source, LIGHT and used against each other. kaya very swift din ang gunaw ng mundo nila. Kaya nga may illuminati eh or to translate in English, light. they are guardians sa society natin that will make sure that WE WILL NEVER HARNESS the power of the light coz of self-destructive capabilities, at mag-settle na lang ang civilization natin sa fossil fuel, which is much much safer to handle.

eh kaya lang etong China hindi nya naiitindihan ang consequences ng pinag-gagawa nya. i-disturb nya ang balance ng mundo kasi gusto niya makatipid sa production by sourcing out her own oil. delikado yan. just to tell the world the South China sea is rich in oil will only invite wars here, kasi oil is for the taking. at pano na ang economy natin and wall street na naka-hedge sa oil and man's consumption.

okey ang ginagawa ng china if we need to harness so much energy at limited time dahil for example, we are going to be invaded by aliens soon. pero wala pa naman ganun threat eh

Oil, from an economic standpoint, is scarce. The fact that it's a finite resource makes it not viable in the long term for humanity to rely on.

Also, you might want to read up on how fossil fuels are created, harnessed, refined and used. Essentially, we use up more than we can find and these cannot be easily replaced. The by-products as well are elementally different from the source material since these fuels are first refined and then burned.

You might also want to read J.S. Gordon's The Rise and Fall of Atlantis: and the mysterious origins of human civilization.