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In the rough South China Sea, a hidden war over deep-sea oil is quietly staged. How did Vietnam, a small country in Southeast Asia, find opportunities in the midst of international waves, and how did it embark on a risky path?
From the end of the 20th century to the beginning of the 21st century, behind the prosperity of the global economy, oil, as one of the core resources, is undoubtedly the lifeblood of national development.
For resource-starved Vietnam, the South China Sea's rich oil reserves are like an untapped gold mine.
In 1968, a United Nations report first revealed the oil potential of the South China Sea, particularly around the Spratly Islands, and ignited a flame of hope in Vietnam.
However, most of these fields are located within what China claims as the nine-dash line. Faced with such an alluring fortune, Vietnam began to steal Chinese oil frequently, and finally paid the price in 2018.
The revelation of the United Nations and the ambitions of Vietnam
In 1968, the United Nations released an exploration report in the South China Sea, which detailed the state of oil resources in the Spratly Islands and other regions. The report uses a variety of geological and geophysical methods, including seafloor seismic detection and rock sample analysis, to accurately map the area's oil and gas reservoirs.
After the report was made public, it quickly became an international spotlight, with many countries reassessing the resource potential of the South China Sea. The Government of Viet Nam has shown great interest in this report. The report clearly points out that the South China Sea, especially the waters around the Nansha Islands, contain a large amount of untapped oil and gas resources.
This information has led Vietnam to pay close attention to the economic value and strategic significance of the region. According to the United Nations, the potential production of these fields is enough to benefit any country that can exploit these resources. Shortly after the report's release, Vietnam began planning its own oil development plans.
The Government of Viet Nam has instructed its national oil company, as well as relevant geological and oceanographic research institutes, to study the contents of the study in detail and to carry out its own exploration activities. Vietnamese oceanographic research vessels were sent to the waters near the Spratly Islands to conduct geological exploration and sample collection.
These activities did not significantly cross internationally recognized maritime boundaries at the beginning, but Vietnam's thirst for these resources grew as research deepened.
Cross-border mining and clandestine transport
After identifying more than 120 oil development zones, Vietnam embarked on its extensive offshore oil and gas development plan. Many of these development zones are located within what China claims as the nine-dash line, which directly involves the waters near the Spratly Islands. Due to the abundance of oil and gas resources in these regions, Vietnam has decided to aggressively pursue these projects despite potential geopolitical risks.
In order to achieve the effective exploitation of these fields, Vietnam has not only deployed drilling rigs on the high seas and disputed waters, but has also taken more covert measures to ensure the diversion and utilization of the extracted oil.
Vietnam secretly designed and built a series of deep-sea pipelines that not only connect Vietnamese-controlled oil wells, but also quietly extend into the nine-dash line, connecting to some wells close to Chinese-controlled areas.
The construction of such clandestine oil pipelines involved a high degree of technical complexity and sophisticated engineering management. Pipelines are often installed at extremely deep seafloors to avoid detection by conventional maritime patrols and satellite reconnaissance. Through these deep-sea pipelines, Vietnam is able to secretly transport crude oil from the oil fields inside the nine-dash line to its own processing facilities, and then into Vietnam's domestic oil supply chain.
China is increasingly aware of this action and sees it as a serious violation of national sovereignty and maritime rights and interests. Through routine maritime patrols and satellite detection, China's maritime authorities began to notice some unauthorized maritime activity within the nine-dash line. After further investigation and analysis, the Chinese side confirmed Vietnam's illegal laying of oil pipelines inside the nine-dash line.
The Chinese government takes this very seriously, believing that Vietnam's activities are not only an illegal appropriation of China's marine resources, but also a blatant challenge to international law and regional agreements. In multiple international and regional forums, China has begun to speak more aggressively about its claims to resource rights in the South China Sea and has warned Vietnam and other countries to respect China's maritime sovereignty.
A short-lived boom from resource theft
Through clandestine and illegal exploitation of oil fields in the South China Sea, Vietnam's oil production has risen dramatically in a short period of time, reaching up to 20 million tons per year. This figure is not only the highest in Vietnam's history, but also quickly propels it into the ranks of the world's oil exporters.
Thanks to the development of these oil resources, Vietnam is able to export a large amount of crude oil to the international market, especially to neighboring Asian countries and regions. With the surge in crude oil exports, Vietnam's economy is showing unprecedented growth momentum. Gross domestic product (GDP) has increased significantly, and oil export revenues have become one of the main drivers of economic development.
During this period, the Vietnamese government made major investments in the oil and gas industry, including the construction of refineries, upgrading the technology for oil and gas extraction and processing, and expanding the pipeline network to maximize its resource advantage.
Since 2000, with the booming oil and gas industry, the industry has contributed significantly to Vietnam's fiscal revenue. Oil and gas tax revenues began to account for a quarter of the country's total tax revenue, becoming an important pillar of government finances. This proportion is the highest among all industries in Vietnam, much higher than other traditional pillar industries such as agriculture and manufacturing.
The Government of Viet Nam has used these additional revenues to carry out a number of socio-economic development programmes. This includes investment in infrastructure, education and health projects, and improving the living standards of the population. The government has also encouraged more foreign investment into the petrochemical and energy sectors by providing subsidies and incentives to further strengthen the country's economic base.
In addition, the influx of these oil revenues has accelerated Vietnam's domestic modernization process. Urbanization is increasing, and many new cities have sprung up due to the development of the oil industry, creating a large number of jobs, which has attracted many residents from rural areas to migrate to cities to work and live.
This rapid economic transformation has changed Vietnam's social structure and demographic distribution to a certain extent. Behind this economic growth, however, lies the potential risks associated with dependence on a single resource. Vietnam's economy has become more dependent on international oil prices, exposing it to a high risk of external market volatility.
In addition, international pressure and potential geopolitical conflicts arising from illegal mining activities pose a risk for Vietnam's future development.
China's counterattack and tightened management in the South China Sea
Since 2010, the Chinese government's management and oversight actions in the South China Sea have been significantly strengthened. This change manifests itself at a number of levels, including policy development, increased intensity of maritime patrols, and increased control over the area through the establishment of administrative units. Among this series of measures, Sansha City, which was established in 2012, is particularly important.
The establishment of Sansha City is not only an important administrative measure to assert China's sovereignty in the South China Sea, but also substantially strengthens China's management and de facto control over the disputed areas of the South China Sea. Sansha covers a wide area including the Xisha Islands, Zhongsha Islands and Nansha Islands.
The new city government is responsible for coordinating and managing the development of marine resources, environmental protection, and maritime safety in the South China Sea. Through the establishment of this administrative unit, China will be able to implement laws and regulations more systematically to safeguard its interests and security in the region.
As part of its efforts to tighten management, China has deployed more coast guard vessels and naval vessels in the South China Sea to step up patrols in the area. These ships are not only used for regular maritime patrols, but are also involved in the fight against illegal fishing activities and the monitoring of foreign vessels.
In addition, China has added a number of marine monitoring stations to enhance surveillance and information gathering in the South China Sea using modern technologies such as satellites and drones. With the onset of 2017 and 2018, China has taken more determined steps to protect its maritime rights and interests in the South China Sea.
In particular, a cessation of exploitation was issued to foreign oil companies operating inside the nine-dash line, including a major oil company in Spain. The announcement is based on the Chinese government's position on sovereignty over marine resources within the nine-dash line and is intended to discourage any foreign exploration and exploitation activities that could harm China's maritime rights and interests.
The Vietnamese government initially ignored China's decision. The Vietnamese government wants to maintain its oil production and economic gains by ignoring China's warnings and continuing its partnerships with foreign oil companies.
However, as China's military presence in the South China Sea ramps up and the Chinese government's determination to assert its maritime rights and interests becomes apparent, Vietnam's disregard becomes unsustainable. Under constant pressure from Chinese military power, Vietnam had to reassess its position.
Eventually, the Vietnamese government was forced to notify Petrova Spain to stop mining activities within the nine-dash line. Although this decision has a certain negative impact on Vietnam's oil production, it is necessary in the long run to avoid further escalation of the conflict with China in the South China Sea.
Vietnam's illegal exploitation activities in the South China Sea have culminated in the payment of huge compensation amounting to more than 7 billion yuan. This economic burden has had a severe impact on Vietnam's national finances and has also damaged its credibility in the international arena.
The compensation mainly concerns contractual disputes between Vietnam and foreign oil companies, particularly those projects that carry out oil and gas exploration and production within the nine-dash line claimed by China. The companies, which suffered huge investment losses after China's assertive statements and actions, have filed claims against Vietnam under the terms of their contracts with the Vietnamese government and PetroVietnam.
The contracts were terminated as the Vietnamese government was unable to guarantee safe mining in the disputed waters, and the foreign companies concerned sought compensation for losses caused by the early termination of the contracts and the failure to realize the expected profits.
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Resources:
- Foreign Logging Technology,2007,22(3):77-77