Technological breakthroughs can have a major impact on diplomacy and international relations. China National Offshore Oil Corporation’s (CNOOC) rig Haiyang Shiyou (HYSY) 981 is such an example. The technological advances of HYSY 981 may well prove to be a “game changer” in the South China Sea, but whether that change enhances political cooperation or fuels greater tensions will remain to be seen while China further utilizes its new “big toy.”
HYSY 981 is a state-of-the-art semi-submersible oil platform owned and operated by the China National Offshore Oil Corporation. It is China’s first deep-sea oil rig. The immense depth of the South China Sea, averaging around 4,000 feet and up to 14,100 feet makes drilling an extremely difficult practice requiring technology that had only been mastered by foreign oil corporations. HYSY 981 signals the first time an East Asian state possessed the ability to harness these reserves without outside support. China’s advancements with 981 provide the capability to drill up to 32,000 feet. Because of this technological development HYSY 981 has a special strategic significance to China and may become a game changer in the South China Sea.
HYSY 981 has been making news since it was manufactured. This 600-meter (1,970-foot)-long mega oil drilling platform began operation on May 9, 2012 in an undisputed water area about 320 kilometers south southeast of Hong Kong, at a depth of 4921 feet. On May 2, 2014, the platform was moved near to the Paracel islands. The placement of HYSY 981 into the water zone within 200 kilometers of Vietnam provoked a storm of anti-China violence in Vietnam. Even though China claims that it holds sovereignty over the territory based on its claim to the Xisha (Paracel) Islands, Vietnam claims that the waters belong to it as part of its exclusive economic zone (EEZ). The Vietnamese sent a vast number of armed and unarmed ships to disrupt the rig’s operations. China also sent ships and air support to ram Vietnamese vessels near HYSY 981. The confrontation calmed down only after China announced on July 15 to remove HYSY 981 from the disputed waters. However, shortly after this move, CNOOC made public HYSY 981’s discovery of a substantial deep-water gas field in its new drilling area 150 kilometers south of Hainan. It was estimated the new well could contain up to 30 billion cubic meters of gas. Based on the CNOOC’s information, the well would produce 56.5 million cubic feet of gas per day, equivalent to about 9,400 barrels of liquid oil per day.
With HYSY 981 the game of South China Sea may be different from now on. But just how might the role of 981 change the game? First, the development of this ultra deep-sea semisubmersible drilling technology will allow China to utilize fossil fuel reserves that had until now been the exclusive domain of Western companies forming partnerships with area nations. Beijing happily announced that it “is now technologically capable of drilling in any place in the entire South China Sea.” HYSY 981 gives Beijing the ability to deter international oil companies from entering the SCS gas market on the behest of Vietnam and other nations by relocating HYSY 981 to any areas where gas fields are located, with or without PLA Navy support.
Beyond the increased presence and geographic maneuverability HYSY 981 gives China in the region, it also amplifies Beijing’s diplomatic maneuverability. HYSY 981 has been described as China’s “mobile sovereign territory.” It can serve as a political bargaining chip for its South China Sea game. With it, Beijing now controls in HYSY 981 a device that plays the role warships cannot. Beijing can astutely maneuver 981 physically and diplomatically in efforts to aid its entitlements to disputed islands, shoals and reefs, moving the rig to any area under contention for the purpose of natural resource extraction while keeping out Western influence, discouraging those companies from entering the dangers of the often aggressive disputes.
As seen in the last six months, HYSY 981 can be a lightening rod of conflict, with the ability of creating more tensions between Beijing and Hanoi. But China’s 981 bargaining chip does not need to only be played in an aggressive manner. The enhancements CNOOC has made with the technology of 981 can spur a new model of cooperation in the South China Sea. There is the possibility of joint exploration between China, Vietnam and other claimants, providing greater economical partnership, political goodwill and mutually beneficial resources which might subdue hostility over opaque claims to water rights. “Shelving differences and instituting joint development” has long been China’s basic policy for the South China Sea disputes since the Deng Xiaoping era.
It is still too early to predict exactly in what ways HYSY 981 will be a “game changer” and it will largely depend on how China decides to use its new deep-water rig. Based upon HYSY 981’s brief existence thus far it seems that China has carefully used the rig to test its effectiveness as both a trigger point to Vietnam and its ability to assert its sovereign rights to disputed waters—providing a new wrinkle in an old game that will continue to be played out in the South China Sea.
