Related: East China Sea

The focus of most attention regarding the South China Sea's (SCS) resources has been on hydrocarbons, especially oil. Oil reserve estimates for the entire SCS region vary. One Chinese estimate suggests potential oil resources as high as 213 billion barrels of oil (bbl). A 1993/1994 estimate by the U.S. Geological Survey estimated the sum total of discovered reserves and undiscovered resources in the offshore basins of the SCS at 28 billion bbl.

The fact that surrounding areas are rich in oil deposits has led to speculation that the Spratly Islands could be an untapped oil-bearing province. There is little evidence outside of Chinese claims to support the view that the region contains substantial oil resources. One of the more moderate Chinese estimates suggested that potential oil resources (not proved reserves) of the Spratly and Paracel Islands could be as high as 105 billion bbl. Due to the lack of exploratory drilling, there are no proven oil reserve estimates for the Spratly or Paracel Islands.

Natural gas might be the most abundant hydrocarbon resource in the SCS. Most of the hydrocarbon fields explored in the SCS regions of Brunei, Indonesia, Malaysia, Thailand, Vietnam, and the Philippines contain natural gas, not oil. Estimates by the U.S. Geological Survey and others indicate that about 60 to 70 percent of the region's hydrocarbon resources are natural gas.

As with oil, estimates of the SCS’ natural gas resources vary widely. One Chinese estimate for the entire SCS estimates natural gas reserves to be 2 quadrillion cubic feet. Another Chinese report estimates 225 billion barrels of oil equivalent in the Spratly Islands alone. If 70 percent of these hydrocarbons are gas as some studies suggest, total gas resources (as opposed to proved reserves) would be almost 900 trillion cubic feet (Tcf). In April 2006, Husky Energy working with the Chinese National Offshore Oil Corporation announced a find of proven natural gas reserves of nearly 4 to 6 Tcf near the Spratly Islands.

Field ownership is an important point to be clarified prior to production in any area of the world (please refer to South China Sea Territorial Issues for an overview, or click here for a map detailing fields and boundary disputes). Despite the contested nature of the SCS, production is being undertaken by the following countries:

Indonesia: claims the natural gas-rich fields offshore of the Natuna Islands. As of 2008, the fields are estimated to have close to 46 Tcf of recoverable reserves. Indonesia’s claim was undisputed until China released an official map with unclear maritime boundaries indicating that Chinese-claimed waters in the South China Sea may extend into the waters around the Natuna Islands. Indonesia responded in 1996 by holding large military exercises in the Natuna Islands region. Since then, Indonesia has begun major natural gas production in the Natuna area without China voicing any objection. Indonesia has been exporting Natuna gas to Singapore’s Jurong island via a 400-mile undersea pipeline since 2001.

Philippines: The Filipino Malampaya and Camago fields are in waters claimed by China. Both fields are estimated to contain a combined amount of 2.3 to 4.4 Tcf of natural gas reserves. The Philippines has proceeded with development of the fields and linked the gas output to three power plants via a 312-mile pipeline. There have been no objections from China regarding this development. The Malampaya field has an estimated 150 million bbl of oil; as of January 2008, plans were underway to begin international bidding rounds for development of the field.

Malaysia: Many Malaysian natural gas fields located offshore Sarawak are also claimed by China, but to date, China has not specifically objected to their development. Discoveries of oil in 2002 and 2004 (by Murphy Oil and Shell Malaysia, respectively) off the coast of Sabah have contributed to the dispute between Malaysia and Brunei over offshore rights. Brunei had asserted a 200-mile exclusive economic zone (EEZ) off its coastline in 2000. Negotiations between the two governments to resolve the issue are ongoing.