Multinational oil companies and the spratly dispute

Abstract

Unlike other studies on the contest for the South China Sea which heavily rely on security and foreign policy analyses, this article analyzes the issue focusing on the impact of multinational oil companies on the national policies of the littoral countries and on the territorial dispute in the South China Sea. This study acknowledges that there are many other additional factors and forces (strategic, military, economic, historical, etc.) affecting the dispute. However, they will not be included in the focus of this study. This article singles out oil companies as one important factor and argues that the participation of multinational oil companies in the South China Sea further internationalizes the dispute and increases international attention to the dispute. Because of the intemationalization of the dispute and the need for a stable environment for economic growth in the region, it is unlikely for any disputers to engage in a major conflict without incurring high costs in military, political and economic terms. Under such conditions, western oil companies play critical roles. This study has five sections. The first section describes the background of the dispute in the Spratly Islands. The second section discusses the national policies of the host countries to attract western oil companies to engage in oil exploration in the Spratlys. The third section analyzes oil companies' attitudes and their corporate strategies for exploration there. The fourth section uses the case of the Wanan Bei dispute to illustrate the role of western oil companies' in the dispute. The final section summarizes the influence made by the western oil companies.