China Warns Against South China Sea Oil Exploration

BEIJING (Dow Jones Newswires), March 24, 2011

China warned against any oil exploration without its consent in waters it claims in the South China Sea, after the Philippines announced plans for possible drilling.

Manila's Department of Energy said Wednesday that U.K.-based Forum Energy had completed a seismic survey for the Reed Bank, near the disputed Spratly Islands.

The Spratlys are called the Nansha Islands in Chinese and claimed by Beijing.

"China holds indisputable sovereignty over the Nansha Islands and the adjacent sea waters," foreign ministry spokeswoman Jiang Yu told reporters when asked for comment on the plan.

"Any activities by countries or companies to explore for oil or gas in the sea waters in China's jurisdiction without the permission of the Chinese government will constitute a violation of China's sovereignty and...will be illegal and invalid."

Jiang didn't make any direct reference to the Philippines or Forum Energy, nor did she say the survey area was actually in waters under Chinese jurisdiction.

Chinese embassy officials in the Philippines earlier requested a copy of the Forum Energy announcement, but didn't return subsequent calls.

On Wednesday, Forum Energy said it used the survey data to evaluate the commercial potential of the block and to "help identify the best location for possible appraisal wells to be drilled."

The Reed Bank lies about 150 kilometers east of the reputedly oil-rich Spratlys, which are claimed in whole or in part by Brunei, Malaysia, Taiwan, Vietnam, the Philippines and China.

Copyright (c) 2011 Dow Jones & Company, Inc.


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