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Philippines: Beijing Oil Drilling In Disputed South China Sea A ‘Red Line’

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The Philippines has notified China of its “red lines”—potential Chinese actions that would be unacceptable to Manila—in the South China Sea, including oil and gas extraction in disputed areas, the Philippine Foreign Secretary Alan Peter Cayetano said on Monday.

Another unacceptable action would be Chinese construction activities on a disputed shoal in the South China Sea, according to the Philippine diplomat.

Cayetano was giving more details on the Philippines’ policy to defend its sovereignty after it was criticized for being too soft on China.

“At the right time, we will prove you wrong because nothing is secret forever,” Associated Press quoted Cayetano as saying on Monday.

The Philippines and China are just two of the countries claiming territory and waters in the South China Sea that lies along one of the key global trade routes.

The long-running dispute in the South China Sea involves territorial claims by China as well as Vietnam, the Philippines, Taiwan, Brunei, and Malaysia. China has territorial claims to about 90 percent of the South China Sea, which has put it at odds with its neighbors.

Apart from being a critical global trade route, the South China Sea is estimated to hold around 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proved and probable reserves, with conventional hydrocarbons mostly residing in undisputed territory, according to the EIA.

Related: OPEC Has A Global Inflation Problem

The dispute in the South China Sea has strained not only the relations between China and its neighbors, but has also made companies and countries very careful in exploring for oil resources in the area.

Earlier this year, Vietnam was said to have suspended a second oil drilling project in the South China Sea in less than a year after pressure from China.

Earlier this month, sources close to the Vietnamese unit of Russia’s Rosneft told Reuters that there were concerns about China’s possible reaction to the drilling of a production well off the coast of Vietnam in the South China Sea that Rosneft had started days earlier.

By Tsvetana Paraskova for Oilprice.com

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