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China Sends Oil Rig To Disputed Waters

Tyler Durden's picture




 

Submitted by James Burgess via OilPrice.com,

Over the weekend of May 3 and 4, China sent an oil rig into disputed waters of the South China Sea to begin oil exploration. The rig is near the Paracel Islands, inside the 200-mile exclusive economic zone of Vietnam, which angrily protested the decision. The Vietnamese government insists that the waters, as well as the oil and gas reserves held beneath, belong to Vietnam.

  • VIETNAM CANNOT ACCEPT AND STRONGLY OPPOSES CHINA RIG PLACEMENT

Where boundaries are drawn in the South China Sea has long been a source of regional tension, but China has escalated the conflict by moving to drill the first well inside disputed territory. China said the oil rig would be operating from now until August 15.

Some observers see the move as a careful calculation by Beijing, which believes Vietnam won’t be willing to risk war over Chinese drilling. “It's going to be one more of these small, incremental steps that individually won't lead to conflict, but collectively, over time, gradually will change the status quo,” said Admiral Mike McDevitt U.S. Navy (Ret.), according to Foreign Policy.

For its part, Vietnam is demanding that China cease drilling operations. “All foreign activities in Vietnam's seas without Vietnam's permission are illegal and invalid,” Vietnam’s Foreign Ministry said in a statement. “Vietnam resolutely protests them.”

The move may also be a response to U.S. President Barack Obama’s recent trip to Southeast Asia, which included a deal with the Philippines to allow for a greater American troop presence in the region. The U.S. and the Philippines kicked off a two-week long military exercise on May 5.

The U.S. Energy Information Administration estimates that the South China Sea holds 11 billion barrels of oil and 190 trillion cubic feet of natural gas, most of which is located in disputed territory. China believes the oil and gas reserves could be much larger.

 

The question now becomes, after his recent Asia trip, is this another red line being crossed for President Obama?

 

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Tue, 05/06/2014 - 22:37 | 4734669 suteibu
suteibu's picture

Too funny!  Too bad the US lost the Vietnam War.  All of that oil and gas could be theirs.

Tue, 05/06/2014 - 22:45 | 4734693 Xibalba
Xibalba's picture

I'm sure the Americans will be back

Tue, 05/06/2014 - 22:50 | 4734710 markmotive
markmotive's picture

Resource acquisition is a matter of life or death for China. Therefore China will take geopolitical risks in order to make those acquisitions.

The next world war will start because China's demand for resources is pushing up against the West's current supply.

http://www.planbeconomics.com/2013/07/oil-war-china-vs-japan.html

Tue, 05/06/2014 - 22:52 | 4734717 DoChenRollingBearing
DoChenRollingBearing's picture

All of a sudden, Robert D. Kaplan's new book (2014) Asia's Cauldron, looks very timely.  It is about China's aggression into the South China Sea.

I guess that book is No. 1 on my reading list now.

Tue, 05/06/2014 - 23:00 | 4734739 So What
So What's picture

This is all related to Ukraine.
A little history: Russia aided Vietnam during Vietnam war with America and later war with China in 1979. Vietnam has always aligned with Soviet Union and later Russia against China.
The Ukraine situation, China and Russia must have agreed and Russia is throwing Vietnam under the bus for China's backing on Ukraine.
Ultimately, Vietnam will have no choice but to go into the arms of the US.
This is a terrible move by China. China encirclement is now complete.

Tue, 05/06/2014 - 23:08 | 4734755 spine001
spine001's picture

Terrible? Imho it's a great move by China. While everybody else is destroying themselves and wasting non renewable energy, the chinese are investigating the energetic worthiness of the regions in conflict. I see this move as a great long term strategic move by China.

Tue, 05/06/2014 - 23:12 | 4734763 So What
So What's picture

IMHO, the US will then have two proxy wars: Ukraine and South China Sea with Phillipine, Japan, South Korea and Vietnam.
With Vietnam spearheading the land war and the other three countries for the sea war, China and Russia will be bled dry and reduced to dust. Or nuclear wars. The Neo-con must be popping champagne tonite.

Tue, 05/06/2014 - 23:16 | 4734780 suteibu
suteibu's picture

Perhaps, though I do not believe that South Korea will play ball.  They have the best relationship with China of all the East Asian countries and one of the worst with Japan.  They would probably sit this one out.

Tue, 05/06/2014 - 23:25 | 4734809 knukles
knukles's picture

This is what one gets for sending Moochelle for vacation.

Wed, 05/07/2014 - 01:17 | 4734999 Manthong
Manthong's picture

Obama ought to call the Chinese Premier and firmly tell him how much he is disappointed.

Obama Biographer: 'The World Seems to Disappoint Him'... 

Wed, 05/07/2014 - 01:30 | 4735016 TruthInSunshine
TruthInSunshine's picture

Obama's Russian #Reset

Obama's Asian #Pivot

#DoubleFail

Wed, 05/07/2014 - 01:42 | 4735027 putaipan
Wed, 05/07/2014 - 03:24 | 4735118 TheRedScourge
TheRedScourge's picture

If the US wanted to show some balls here, they'd pick a nice spot just inside Chinese waters and set up four Vietnamese exploration rigs with a US carrier escort.

Wed, 05/07/2014 - 06:41 | 4735239 old naughty
old naughty's picture

@DCRB,

Does Kaplan's book mention anything about TPP?

I thought TPP is all about IP...But, here's one to ponder:

Obama did not get his fast-tracked agreement in Japan (mainly due to import levies on cars and produces) so a new First-Minister round is rumored to be held May 12-15 in Vietnam.

So the oil rig inside Vietnam's 200-mile eez, hummmmm (!?)

 

Wed, 05/07/2014 - 06:45 | 4735242 negative rates
negative rates's picture

I guess Vietnam doesn't need the money.

Tue, 05/06/2014 - 23:28 | 4734814 aVileRat
aVileRat's picture

North Korea is the knight to their bishop. They are not moving anywhere and are equally mad at Abe for wrecking the implied ASEAN deal of being the workshop to Japanese trade houses.

China is just testing the waters like Putin did with Ukraine. Recall the whole current drama started when Yanukovich was pushed by Putina to give the black sea fleet a free lease for 100 years and the Rada protested that a backdoor deal on Sevastapol would constitute a state asset sale of Crimea to the Russian Navy. In response, Putin threatened and then offered free money vs. the accepted EU deal that would have given the Ukraine enough money to turn down the Crimea for Trade markets deal.

Putin did not like that, so he invaded a country with a large non-carded ethnic population.

As I said a few months ago, google the number of Han Chinese in Vietnam. Over 38% of the population of Vietnam are expats or landed Chinese post-Vietnam War.

Now think about what kind of well results can be found in Google cache to have been declared commercial since November 2013.

Ah well.

Wed, 05/07/2014 - 00:44 | 4734955 TGR
TGR's picture

Got a link for the 38% claim? Sounds completely wrong to me.

//
Wed, 05/07/2014 - 01:14 | 4734992 Matt
Wed, 05/07/2014 - 06:37 | 4735236 Spumoni
Spumoni's picture

My take on the history of the region suggests that there has been intermittent war between the Han and the Vietnamese for some 3000 years-pretty much always over resources. A good read on the subject is "Fire In The Lake,"  don't recall the author. Another example of a genetically unified population (courtesy of 3 millenia of rape) still arguing over whose tribe they belong to.

Just send Bourdain back over there - he'll feed 'em up and they can settle their differences on full tummies.

Wed, 05/07/2014 - 02:42 | 4735081 james.connolly
james.connolly's picture

del

Wed, 05/07/2014 - 02:36 | 4735082 james.connolly
james.connolly's picture

vietnam is chinese in all way's from eating dog, .. to lifestyle,... to sanitary ..

Vietnam doesn't have much comparison to other SE-ASIA,... its like CHINA in SE-ASIA,... in other words crowded and nuts.

**

South KOREA is a USA/CIA puppet state, they will like TAIWAN do what they're told until the USA implodes, .. if it ever does.

>>>

CHINA is investing in VIETNAM and all of SE-ASIA,... what has the USA done? FUcking nothing.

If the USA plays a "UKRAINE" in Vietnam, the people will VOTE for chinese hegemony.

Tue, 05/06/2014 - 23:43 | 4734848 Anusocracy
Anusocracy's picture

Two proxy wars that the proxy warriors will lose and the US will commit suicide if it engages Russia and/or China in a hot war.

The US has been beating up on punching bags for a half century, Russia and China can punch back.

Wed, 05/07/2014 - 02:31 | 4735077 james.connolly
james.connolly's picture

If the USA does nothing the USD will implode,

If the USA fights the Chinese/Russian's, how can it lose?

The USA still has the SAUDI oil, and CHiNa must buy.

The USA can print FIAT to INFINITE to invest in WAR, nobody else can do this, ...

FIAT to INFINITE got us here, and FIAT to infinity will keep us here,  ...

WAR, ... its the future.

Will 'we' lose fuck yes, ... but so what its' not about the USA, its about the USD, ... cleverly even if the USA loses, DEBT will have to be paid to RUSSIA/CHINA in USD, as the USA has nothing else.

Get it?

 

Wed, 05/07/2014 - 21:46 | 4738258 Anusocracy
Anusocracy's picture

I meant war ending up going nuclear.

Tue, 05/06/2014 - 23:48 | 4734863 Omegaman2211
Omegaman2211's picture

You have quite the imagination.

Wed, 05/07/2014 - 00:12 | 4734888 PacOps
PacOps's picture

Spine: Gotta agree. As much as I dislike Chinas tactics. They are very long stratigic thinkers.

Now, exploratory drilling usually takes place after exploration with seismic equipment and recorders to locate where to drill in the most probable productive places. This takes time and computer analysis on the front end before going to expense of moving a sea going rig into position. Unless they are "wildcatting" and wildcatting with an off-shore rig is very risky to the point its just not done ... unless they are just testing the political waters and expense be damned.

If they find something productive its then time to move in with more drilling rigs to "develop" the find.

I worked the oil patch, mostly for Pertimina, the Indonesian Oil Co., back in the 70s on the exploration seismic side and positioned the off-shore rigs for drilling and developmental activity.

Pertamina is a huge entity to its own in terms of government within Indonesia. 

A most interesting development that we will surely be discussing off and on as this progresses.

Wed, 05/07/2014 - 01:16 | 4734995 Matt
Matt's picture

Well, in order for there to be estimated reserves of billions of barrels of oil and 190 trillion cubic feet of natural gas, someone must have done some exploration, right? I mean, they aren't just guessing there is oil and gas?

Wed, 05/07/2014 - 02:08 | 4735058 CrashisOptimistic
CrashisOptimistic's picture

It's a bit more than a guess.  But not a lot more.

Only one out of 4 exploration wells finds something.  That's onshore.  Offshore it's worse.  

It's a lot of money flushed when it's dry, and it usually is.

The seismic studies find structures.  Oil is found only in those structures.  But it's not always found in those structures.

It's not at all uncommon for projected reserves in some place to be taken down a factor of 10 after exploration.  This happened recently in Alaska.  Here:

http://en.wikipedia.org/wiki/National_Petroleum_Reserve%E2%80%93Alaska

Wed, 05/07/2014 - 02:40 | 4735086 james.connolly
james.connolly's picture

CHEVRON mapped out all the under-ocean water off vietnam back in the 1970's/1980'sw using 3D, its all been mapped into color, and everybody knows where the OIL is, ... it just was'nt ready to be pumped, perhaps nobody willing to pay for the offshore rigs,

But know this troops, the VIETNAM war was about OIL, and even after the WAR, the USA oil companys stayed and worked the area, ... and never quit doing seismic analysis.

Wed, 05/07/2014 - 00:00 | 4734891 813kml
813kml's picture

The move is also timely since the Eye of Sauron is trained on Ukraine at the moment.  This could be part of Russia/China strategy to stretch US attention thinner, the US could not fight a war on two fronts.  Three if you count the impending unrest by US citizens.

Tue, 05/06/2014 - 23:02 | 4734748 spine001
spine001's picture

If it wasn't real it'd be funny. While the US plays war games that they can't possibly ever use, the chinese start drilling for oil. You really can't make these things up.

Tue, 05/06/2014 - 22:52 | 4734719 HardlyZero
HardlyZero's picture

Ahh.  So when is the referendum ?

Tue, 05/06/2014 - 22:53 | 4734721 suteibu
suteibu's picture

So, Ukraine/Russia is no longer a problem that could trigger a war?  Damn...all of that hype for nothing.

Tue, 05/06/2014 - 23:08 | 4734758 MeMongo
MeMongo's picture

Exactly sut It's Syrin mooselimbs killing Saudi Gentiles, and Isralie Amish killing all of the goat fukers, that of course have to kill all of the White kids playing the knockout game in Philly, Detroit..where the chinks are making a killing, next to pimp my ride sickcago just found out that rahm my people holder hang out, just took the 2 popes and made them make a mockery of the rabbi organ harvesting rackit that Harlem is SO known for.............seehow it works Sut? Plug whatever the fuck it is into the main frame and lo and behold rainbow riding skittle shitting unicorns will appear....note to self ..enjoy resposibly

Wed, 05/07/2014 - 04:12 | 4735146 newbie vampire
newbie vampire's picture

The Obama adminstration has to sign up Vietnam in a new strategic defence treaty or he is not gonna get his war with China. 

Tue, 05/06/2014 - 23:25 | 4734808 BandGap
BandGap's picture

The US is closer to Viet Nam than ever. They use Viet Nam ports for fueling and R&R.

This was the hot spot I thought would ignite things. Then Libya, Syria and Ukraine came along. Back to the front burner.

The Vietnamese WILL not take shit from China. They kicked their asses completely the last time out in the 80s. Viet Nam has real fucking issues with China, the Russians supplied Viet Nam with arms during the US- Viet Nam war. NOT the Chinese.

Wed, 05/07/2014 - 00:06 | 4734903 Rakshas
Rakshas's picture

....... seems to me both the Soviets and the Chinese backed Vn during the american war, China had divisions ready to come in should the US have invaded the North; China threw VN under the bus abit later in the game after the Nixon visit and then attacked in 1979 after the Vietnamese invaded Cambodia though few remember the massacre of the 3 or 4 thousand Vietnamese that was carried out by the come-here-rouge Pothead that precipitated the VN invasion.  China attacked along the northern border and basically got thier asses kicked by Vietnamese chicks (they called them militia but mostly women) as Hanoi was keeping thier regulars in reserve should the Chicoms approach Hanoi....... the general feeling was the US had some role to play in the whold debacle as well.  While the entire engagement was limited and no doubt China could have inflicted much more damage than it did they still got mauled pretty badly on the whole and I think it can be viewed as a testament to the conviction of the VN people to maintain thier freedom from overlords.  It may be a third world country in a number of ways to this day and communist but I can tell you I feel far more free walking the streets of Hanoi right now than i do on any american street........and a hell of a lot safer too......

....... and that concludes today's hyperinflated $0.02........ 

Wed, 05/07/2014 - 00:20 | 4734917 PacOps
PacOps's picture

Yes ... And don't forget the Cubans. Active on the intel side for the VC and NVA with boots on the ground in-country.

(I was IBM-GEM PacOps - '66-'70 in Nam)

Wed, 05/07/2014 - 01:53 | 4735032 DarthVaderMentor
DarthVaderMentor's picture

Bob Tanner? You work at TSN? I was the only Beemer that spoke fluent Russian and Spanish that was up at the SOG helping out with the Phoenix crowd. My Dad was the one that trained the team that finally sorted out the "Bolivian Affair".

 

Wed, 05/07/2014 - 06:54 | 4735250 BandGap
BandGap's picture

Almost all the weapon systems employed by the VN against the Americans (AA, tanks) were Russian. China and Viet Nam have never gotten along. At one point, around 1980, the VN had the third largest standing army in the world.

They will not take shit from the Chinese.

Wed, 05/07/2014 - 04:18 | 4735151 newbie vampire
newbie vampire's picture

Yeah, I can still recall the tears in the eyes of the Vietnamese when the US withdrew from Vietnam. I can also remember the heroics of the brave Japanese soldiers who bravely defended US troops during the Vietnam "Misunderstandin" too.  

Wed, 05/07/2014 - 02:20 | 4735065 Jugdish
Jugdish's picture

Ya too bad the Mongols lost their Vietnam war too bad the Chinese lost their Vietnam war too bad the French lost their Vietnam war. Too bad the US lost their war. Too bad the LA Clippers have a racist baskeketball coach that refuses to do an interview with Oprah. Let's try to stiick to stuff that's going on here.

Wed, 05/07/2014 - 04:59 | 4735181 Tom_333
Tom_333's picture

Too many red lines....too few men with guns. The U.S. have lately without much fanfare and advertisement conducted the largest reduction in  armed forces since end of WWII. Foreign observers who always are calculating power balances have last years begun to doubt that the old doctrine of conducting 2,5 wars in two geographically very distant places really is something that can be executed. So it´s a safe bet to assume that there will be more of these things to come. More resource conflicts. More border fights. Often erupting in tandem across the world. If it ain´t Ukraine it may be Asia...and so on. The trick being played to their own advantage by foreign powers is to pick up on the invite from State Department , CIA and the rest of them and begin to respond to the covert shit and NGO delivered policies drawing in the west to an extent that the west may not want to be drawn in. Or can afford to be.

When stating this the inevitable counterargument that the U.S. still outspends by far all other major powers for defense will be raised... which is true. However the playbook for the American armed forces also seem to have been redacted and future work may be much closer to home which to a degree off-sets still high spending. Maybe the armed forces will be doing much more work  in ConUS. Or in other words - change you can believe in and never let a good crisis go to waste may have different consequences than what the sheeple understood it to be.

Wed, 05/07/2014 - 09:36 | 4735567 Jadr
Jadr's picture

Yeah the US has undergone a huge reduction in armed forces, going from 4% annual spending increases to 3%, such a huge disarmament.

 

Have you considered that the US is reducing the number of actual armed military personnel because the next phase in war is using robots?

Wed, 05/07/2014 - 10:19 | 4735768 Tom_333
Tom_333's picture

Yes. And they are soon coming to a place near you by the look of things.Lot of guns to be collected.

Tue, 05/06/2014 - 22:39 | 4734671 CrashisOptimistic
CrashisOptimistic's picture

Chinese domestic oil production is a state secret.

Best guess is about 4.7 mbpd.  Largely flat.

Domestic consumption 10+ mbpd.  And growing steeply.

That is all you need to know.

Tue, 05/06/2014 - 22:58 | 4734735 CrashisOptimistic
CrashisOptimistic's picture

Oh btw, that excludes Hong Kong (0 domestic production, consumption about 400K bpd).

and Taiwan (0 domestic production, consumption about 1 mbpd).

China probably would care more about HK than Taiwan.

Regardless, they need more and more and have less and less.

Wed, 05/07/2014 - 00:24 | 4734925 mumcard
mumcard's picture

Not to mention the lack of clean drinking water.  China will go hunting for resources.

Tue, 05/06/2014 - 22:39 | 4734677 nmewn
nmewn's picture

Every hour is like 3:00AM for Obama.

Today he admitted he can't really hold back the oceans like he promised...lol.

Tue, 05/06/2014 - 22:46 | 4734699 suteibu
suteibu's picture

Indeed.  The US instigates most of the trouble around the world (and handles it poorly).  How will they react to trouble started by someone else?

Tue, 05/06/2014 - 23:16 | 4734777 MeMongo
MeMongo's picture

Sorry Sut too tired to write that shit again as posted above but the whole game will go on... as a couple yentas used to say schlemeel ,schamazle, hazenfeffer. Incorporated........Their gonna do it.......weeee!

Tue, 05/06/2014 - 23:57 | 4734880 All_Your_Base
All_Your_Base's picture

give us any chance, we'll take it
give us any rule, we'll break it

Fuck Big L, Shirley, Sqiggy, Lenny and Bernanke 

Tue, 05/06/2014 - 22:48 | 4734706 BlindMonkey
BlindMonkey's picture

Can you even get a tee time that early in the morning?

Wed, 05/07/2014 - 03:11 | 4735035 zhandax
zhandax's picture

Sure, just tell them you're blind.

Tue, 05/06/2014 - 22:54 | 4734725 HardlyZero
HardlyZero's picture

These days it might be difficult to travel to China with or without family.

Wed, 05/07/2014 - 03:16 | 4735110 zhandax
zhandax's picture

Piece of cake if you land in your own jet regardless of who provided it to you.

Tue, 05/06/2014 - 22:41 | 4734679 Bill of Rights
Bill of Rights's picture
Banks Sued on Claims of Fixing Price of Gold http://dealbook.nytimes.com/2014/05/05/banks-sued-on-claims-of-fixing-price-of-gold/?_php=true&_type=blogs&_php=true&_type=blogs&module=BlogPost-Title&version=Blog%20Main&contentCollection=Investment%20Banking&action=Click&pgtype=Blogs&region=Body&_r=1 Frustrated traders and offbeat activists have complained for years in whispers and in online screeds that the price of gold has been subject to collusion. On Monday, these accusations of manipulation found a more august arena for expression: the federal courts. At a 40-minute hearing, lawyers for more than 20 plaintiffs gathered in Federal District Court in Manhattan to coordinate their linked lawsuits against the five banks that make up what is known as the London gold fix. The suits, filed by hedge funds, private citizens and public investors like the Alaska Electrical Pension Fund, contend that the banks have used their privileged positions as market makers to rig the price of gold to their benefit.

Tue, 05/06/2014 - 22:44 | 4734685 CrashisOptimistic
CrashisOptimistic's picture

How is this relevant to sub sea Vietnamese oil geology?

Tue, 05/06/2014 - 23:50 | 4734869 Rock On Roger
Rock On Roger's picture

Black gold

Wed, 05/07/2014 - 04:23 | 4735156 newbie vampire
newbie vampire's picture

Thar's gold in them oil.

Tue, 05/06/2014 - 22:47 | 4734702 Carpenter1
Carpenter1's picture

Alot of people strongly opposing and strongly condemning stuff these days.

Tue, 05/06/2014 - 22:51 | 4734715 HardlyZero
HardlyZero's picture

Is BP involved, providing support ?

Wed, 05/07/2014 - 00:43 | 4734954 PacOps
PacOps's picture

Good question!

The $1 billion rig is owned by China's state-run CNOOC oil company and it had been drilling south of Hong Kong.

http://www.rigzone.com/news/oil_gas/a/132937/US_Investigates_Chinese_Oil...

Tue, 05/06/2014 - 22:52 | 4734716 TheMeatTrapper
TheMeatTrapper's picture

Let me see if I got this right - we're going to go toe to toe with Putin in Ukraine AND face down China over some islands off the coast of Japan. 

All this will make me here in Alabama safer and is being done for my own good. Our roads are fine, the power grid is top notch. Our children are leading the world in mathematics, science and engineering. We have plenty of fresh troops, chomping at the bit to go, we got piles of cold hard cash to pay for all this. 

Our future is so bright I gotta buy some shades. 

Anybody spare a hundred bucks for a pair of shades? 

Tue, 05/06/2014 - 22:58 | 4734736 NoDecaf
NoDecaf's picture

yeah yeah yeah... now pull over to secondary

 

http://www.youtube.com/watch?v=mLI_E3yI23k

 

 

Wed, 05/07/2014 - 00:24 | 4734923 PacOps
Wed, 05/07/2014 - 01:23 | 4735007 Matt
Matt's picture

That's the Joke.

Wed, 05/07/2014 - 01:45 | 4735030 PacOps
PacOps's picture

Sometimes at 71 I'm a bit slow. Not to worry as your time will come eventually as well. ;-)

Wed, 05/07/2014 - 12:43 | 4736439 Matt
Matt's picture

Naw, I'm gonna stay sharp and youthful with regular injections of Olympian blood.

Wed, 05/07/2014 - 04:27 | 4735159 newbie vampire
newbie vampire's picture

Thass right !    We gonna whup Putin with one hand until he calls for his Mama.  And we gonna whup China with the other hand.  Then we gonna grab dem South China sea oil cos the Viets owe us big time.  Now who else wanna whupping ?

Tue, 05/06/2014 - 23:00 | 4734741 Incubus
Incubus's picture

Putin and Russia showed the world that Obammy and Murika are a bunch of bitches.

 

Global politics operates on the same paradigm as prison politics.

 

Bend over and learn to like it.

Tue, 05/06/2014 - 23:00 | 4734742 i_call_you_my_base
i_call_you_my_base's picture

"VIETNAM CANNOT ACCEPT AND STRONGLY OPPOSES CHINA RIG PLACEMENT"

Sounds like they've been consulting with Kerry.

Tue, 05/06/2014 - 23:05 | 4734753 CrashisOptimistic
CrashisOptimistic's picture

While I'm at it:

Vietnam: domestic (offshore) oil production about 380K bpd.  domestic consumption about 395K bpd.

Tue, 05/06/2014 - 23:13 | 4734769 spine001
spine001's picture

Vietnam has decided to set a redline for oil extraction in the region in conflct. If China extracts more than 2 barrels of oil they will retaliate with sanctions.

Tue, 05/06/2014 - 23:42 | 4734846 BlindMonkey
BlindMonkey's picture

The majority of the domestic oil production is dedicated to the sexual lubricant industry.  A downturn in output would really chafe the local economy. 

Wed, 05/07/2014 - 02:41 | 4735089 Oliver Jones
Oliver Jones's picture

Well, they can't argue profits weren't chaste. :)

Tue, 05/06/2014 - 23:15 | 4734774 Stuck on Zero
Stuck on Zero's picture

I'm told that Vietnamese ship captains are terrible navigators.  Whole crews in their oldest ships go into drunken stupors and they crash into things in the night. 

Tue, 05/06/2014 - 23:27 | 4734810 pashley1411
pashley1411's picture

Wouldn't go pissing with the Viets though.

The Viets I know here are quite proud to have pushed back the Chinese for over a thousand years, and figure another 1000 is simply in the cards.

Tue, 05/06/2014 - 23:30 | 4734819 Jack Burton
Jack Burton's picture

Obviously this is a grave threat to American nationa security. This must not be allowed to stand. Sanction China, sanction leaders, freeze assets in US banks. The US national interest is at stake.

Tue, 05/06/2014 - 23:43 | 4734840 BlindMonkey
BlindMonkey's picture

And I understand, McCain vacationed there once.  I believe that makes it a national security priority. 

Wed, 05/07/2014 - 01:19 | 4735004 Rakshas
Rakshas's picture

..... yes he had to subsist on a diet of Pho Ga, Bun Thit Nurong, Banh canh  and Bun bo Hue ..... complained all the time the spices weren't quite right from what I understand....... the other guests got to eat hapless roaches that wandered through thier "suites"

 

http://original.antiwar.com/giraldi/2013/05/29/john-mccain-war-hero-or-s...

Wed, 05/07/2014 - 01:25 | 4735010 Matt
Matt's picture

His fingers are all fucked from bamboo shoots under the nails, he cannot use a keyboard or do much with them. Seems he got a decent torturing as much as anybody else.

Wed, 05/07/2014 - 07:46 | 4735304 headhunt
headhunt's picture

Don't forget the 'red line'.

Wed, 05/07/2014 - 08:01 | 4735319 messymerry
messymerry's picture

Interesting suggestion.  I don't think we can sanction China.  They've got us by the economic huevos and they know it.  It would not go well if we hit China with any meaningful sanctions.

Tue, 05/06/2014 - 23:31 | 4734823 NoWayJose
NoWayJose's picture

By trying to be the world's policeman, and with a foreign policy that tries to overturn any government we don't like, and with NSA spying, and with drones flying, the US has pinched it's nose into too many doors - and because of this policy we have lost the ability to influence other major countries when it really matters. The US is like a clown - running around everywhere and making lots of noise - but losing all respect.

Tue, 05/06/2014 - 23:45 | 4734852 Rock On Roger
Rock On Roger's picture

Not

World's Policeman

Rather

World's Bully.

Wed, 05/07/2014 - 00:23 | 4734921 Rakshas
Rakshas's picture

sorry but what's the difference again?

 

Wed, 05/07/2014 - 07:45 | 4735299 headhunt
headhunt's picture

To be the worlds bully a people would have to be afraid of you; that is no longer the case.

As NoWayJose says, we are the clown of the world and not the scary Wayne Gacy type but the Ronald McDonald type.

Wed, 05/07/2014 - 00:12 | 4734829 aldousd
aldousd's picture

Why the hell would this be Obama's red line?  Sounds like it would be Vietnam's red line. As if they could do anything about it.

EDIT: Seriously, when does everyone else in the world's red-line problems become our problems? I don't get it.

Wed, 05/07/2014 - 04:34 | 4735161 newbie vampire
newbie vampire's picture

C'mon, where's your patriotism ?   We are a shinning beacon of universal banksterism.  

Tue, 05/06/2014 - 23:56 | 4734879 QQQBall
QQQBall's picture

 

Obomber is turning out to be seriously dangerous in so many ways

Wed, 05/07/2014 - 00:46 | 4734957 ptolemy_newit
ptolemy_newit's picture

A review of the nine dash maps outlines a huge area of claimed resources by China.  Is the rig within Vietnams and China’s shared 200 mile limit?   If not then it is within Vietnam 200 mile limit for a reason

The new rig is deep water?

Wed, 05/07/2014 - 00:56 | 4734962 PacOps
PacOps's picture

"There's been a great deal of speculation about how China would use this expensive new rig and it seems we now have the answer. It puts Vietnam in a very difficult position.

http://www.rigzone.com/news/oil_gas/a/132937/US_Investigates_Chinese_Oil...

The rigs I positioned back in the 70s (using the recently declassified SatNav - what evolved into GPS) were multi-million $ creatures. The mind boggles at a billion $ rig. I know costs go up ... but jeese!

Hard to believe that the Chinese run this thing without outside help.

Wed, 05/07/2014 - 03:00 | 4735101 Runs-With_Toast
Runs-With_Toast's picture

Re ' Hard to believe that the Chinese run this thing without outside help.' Cmon they are smart, work hard, many are brilliant..they have the $ the materials, most importantly the morale and will, they r on the up the usa is on the way down....what is the issue?

Wed, 05/07/2014 - 06:18 | 4735228 Wahooo
Wahooo's picture

No, PacOps is right. The oil business was born in the U.S. and the U.S. - Houston - has the thought leadership and technology expertise even today. That's why every country around the world hires U.S. companies to do their buildouts. It is VERY interesting the Chinese did this on their own. Now let's see if it operates.

Wed, 05/07/2014 - 07:40 | 4735296 headhunt
headhunt's picture

They have stolen the plans for half our military, I don't think getting hold of plans to configure a larger version platform would be difficult for them.

Wed, 05/07/2014 - 01:06 | 4734981 PacOps
PacOps's picture
Rig Data: Hai Yang Shi You 981  http://www.rigzone.com/data/offshore_drilling_rigs/1474/Semisub/China_Oi...

Rig Name:

Hai Yang Shi You 981 Rig Manager: China Oilfield Services Ltd. Rig Owner: CNOOC (NOC) Competitive Rig: Yes Rig Type: Semisub Semisub Generation: 6 Rig Design: Chinese Drilling Institute  Rated Water Depth: 10,000 ft Drilling Depth:

32,800 ft

Wed, 05/07/2014 - 01:17 | 4734998 CrashisOptimistic
CrashisOptimistic's picture

For the benefit of the great unwashed, anything below about 23000 feet will be substantially gas and not oil.

This is the driver of scarcity.  There is an oil window, depth-wise.  Go deeper and it's too hot for oil to remain oil.  It breaks down into CH4, nat gas.

Wed, 05/07/2014 - 01:17 | 4735000 PacOps
PacOps's picture

Okay - looking at just the picture ... I now believe a billion $.

I've been out of touch ;-)  http://www.rigzone.com/data/offshore_drilling_rigs/1474/Semisub/China_Oi...

This MoFo can do it all! Dwarfs all the rigs I have been on or seen.

Ya think the Chinese are serioius about oil & gas?

Wed, 05/07/2014 - 03:44 | 4735132 BlindMonkey
BlindMonkey's picture

It was either spend money on that or another ghost city.

Wed, 05/07/2014 - 01:02 | 4734975 Schmuck Raker
Schmuck Raker's picture

Well, it' from Wikipedia so maybe NOT true, but I thought it worth sharing:

All of the islands are currently controlled as part of China's Hainan Province, which in July 2012, established Sansha City to administer the three townships under its jurisdiction. Chinese and Vietnamese forces both occupied parts of the Paracel Islands before 1974, when the Battle of the Paracel Islands occurred, after which the former took control of the entire group.

.... because, generally, after a war the victor decides what is, and is not... well, True.

Wed, 05/07/2014 - 02:52 | 4735097 Runs-With_Toast
Runs-With_Toast's picture

Well Wikipedia is shit, western intel edit there, Kudzu1 and Vquakr are two of them

Wed, 05/07/2014 - 08:39 | 4735405 matrix2012
matrix2012's picture

STATEMENT OF DISASSOCIATION WITH WIKIPEDIA:

 

To all ABOL users

Recently it has come to the attention of the Librarian that Wikipedia, a resource that has been cited repeatedly by the Librarian, is not only of questionable reliability, particularly with respect to its biographical reports of current figures, but also that it appears to be completely untrue to its stated mission of compiling knowledge in a true "open-source" environment.  In fact, recent, reliable reportage indicates that the Wikipedia system is entirely controlled by a cadre of young men with axes to grind and a misogynistic game plan for shaping the Internet public's view of current events.  Accordingly, the Library will no longer cite Wikipedia as a resource, and cautions all users with respect to any statements attributed to Wikipedia found in the Library, that such material should be viewed with suspicion, although not necessarily incorrect or unreliable.  Library users are invited to email the librarian with any specific information regarding Wikipedia references found in the Library.

--5/24/13

http://www.naderlibrary.com/


Wed, 05/07/2014 - 09:22 | 4735535 shovelhead
shovelhead's picture

Misogynistic?

Uh oh...

Somebody called Pussy Riot a bunch of warped cunts instead of brave, fearless gender freedom fighters.

Never step on a librarian's Timberlands.

Wed, 05/07/2014 - 01:16 | 4734996 besnook
besnook's picture

yeah! let's go to war on the vietnamese side this time. nevermind, we were last time. i bet they will fight harder than the arvn this time though.

Wed, 05/07/2014 - 02:27 | 4735074 PacOps
PacOps's picture

The ARVN, for the most part that had some smarts, knew they were pawns with no way out. Some fought well. Consider yourself in their situation. What "we" did with them, the Lao and all the rest of the indegionus fighters in the region was shameful. Similar to how we treat our veterans with TBI & PTSD now ... benign neglect. Truly a national shame with those in DC exempted from it as they could never feel or admit shame.

Wed, 05/07/2014 - 04:04 | 4735141 besnook
besnook's picture

arvn were in a lose lose situation. the dirtiest thing the usa ever did was to cut off their funding, inviting the north to overrun the south in an ironic regular army assault. they never had a chance. why fight under those circumstances? you could die on the battlefield or survive in hiding....maybe.

Wed, 05/07/2014 - 01:28 | 4735014 Fred123
Fred123's picture

One small torpedo would do the trick.

The Chinese will not stop until they get their ass kicked.

Money is everything to these people.

Wed, 05/07/2014 - 01:33 | 4735020 PacOps
PacOps's picture

 

 

http://www.defenseindustrydaily.com/vietnam-reportedly-set-to-buy-russia...

Kilo Class cutaway
(click to view full)

In April 2009, reports surfaced that Vietnam had agreed in principle to a deal with Russia for 6 of its diesel-electric Kilo/ Project 636 Class fast attack submarines. By December 2009, it was an inflection-point deal for a capability that Vietnam has never had before. By November 2013, the new submarines had begun to arrive.

Nor is that the only change in Vietnam’s military capabilities these days, courtesy of their long-standing relationship with Russia. There have been some outside deals for items like maritime surveillance floatplanes, and a Dutch deal will provide high-end frigates. For the most part, however, Vietnam’s new combat power in the air, at sea, and on land is coming from Russia. China’s April 2009 display of naval might  is only part of the mosaic influencing Vietnam’s decisions in these matters….

Wed, 05/07/2014 - 02:13 | 4735061 Jano
Jano's picture

a brave US patriot, indeed; watchin' Foxnews or CNN?

Wed, 05/07/2014 - 06:14 | 4735224 Wahooo
Wahooo's picture

No one, NO ONE, in the U.S. government is going to give the order to sink an oil drilling rig, ANYWHERE. While Saddam and others might attack the oil infrastructure, the U.S. government will not. We are under strict orders to leave the infrastructure alone. Oil rigs around the world are completely safe from U.S. sabotage and destruction. Drill baby, drill!

Wed, 05/07/2014 - 02:48 | 4735095 james.connolly
james.connolly's picture

There  is a SHITLOAD of OIL out there in the CHINA-SEA off Vietnam, this is what the fucking Vietnam War was all about.

The USA has known this since the 1950's nothing new here.

>>

Now WHO in the fuck has the MONEY to invest? NOBODY but the CHINESE, spend those TRILLIONS of USD and become a fucking OIL nation, and pay royalty if need be to the Vietnamese, and more than USA oil leasese would pay.

But MAKE no mistake ALL the oil is KNOWN, and the entire ocean was mapped by USA OIL COMPANY's in that area back in the 1970's - 1980's and all data recorded in 3d and saved on tapes, and now modern processing you can see the oil and almost touch it.

But the USA can't and will not spend it's own nickel, ... most likely its all a fucking game the USA is saying "OH NO look what CHINA is doing", ... fuck its doing what the WEST would do if it weren't broke.

FIAT to INFINITE seems to be only for WAR and WELFARE,... but private companys seem to do the OFFSHORE drilling, ... perhaps BUSH family will use this as a reason to SOCIALIZE DRILLING COSTS??

In the MEANTIME the OIL is there and CHINA will take that OIL cuz nobody else has the balls or WILL, or ability to make the INVESTMENT.

Wed, 05/07/2014 - 03:27 | 4735117 Flagit
Flagit's picture

 

Now WHO in the fuck has the MONEY to invest?

The Germans.

Don't forget the Germans.

http://www.worldoil.com/Worlds-largest-deepwater-drilling-rig-under-cons...

Wed, 05/07/2014 - 05:26 | 4735197 james.connolly
james.connolly's picture

Good CATCH,... seems that now we KNOW why the NSA spend's most of its SEMEN on spying on GERMANY.

 

Wed, 05/07/2014 - 03:54 | 4735136 JPMorgan
JPMorgan's picture

Bet the Russian's have their back as well or at the very least are neutral.

This is what Team Amerika gets for poking it's nose in other countries affairs, an escalation of multi-able flashpoints on multi-able fronts.

It wouldn't surprise me if North Korea tests another underground nuke next. 

 

Wed, 05/07/2014 - 04:06 | 4735142 kurt
kurt's picture

China just said, "Stick it up your Pivot-hole!"

Wed, 05/07/2014 - 05:00 | 4735185 laomei
laomei's picture

So Vietnam is crying about those islands which were Chinese until the French decided to snatch them up to add to their colony, which then fell apart and reverted back to China after vietnam was unable to defend them or stake any legitimate claim to them.  Administered and fully controlled by China... sorry Vietnam... but you ain't getting anything.

Wed, 05/07/2014 - 05:16 | 4735191 james.connolly
james.connolly's picture

It seems' to  be ZH, and Texas Oil newsletters that are doing the crying,...

Ever since the disaster in the GULF,... nobody has had the balls to develop offshore wells

Another ANGLE I like is this KUNSTLER shit about "PEAK OIL", there is SO FUCKING OIL out there,... fuck and the US-MIL/CIA of course want it all for themselves,... but funny CHINA needs OIL, its there,

Lastly the CHINESE will PAY Vietnam MORE to lease these OIL lands, ..should they need to PAY, than they would ever get from the white-devil.

Vietnamese are CHINESE, and the CIA are NAZI's, who are you going to trust?

When you here the bitching? Is  is it SAIGON or HANOI?

Hanoi is the only thing that matters, and there its all about CHINESE MONEY and GOLD

>>>

Here's the DEAL ZH troops there is a mother fucker lot's of OIL there off the VIETNAM shore, and the USA always thought it belonged to them, guess what? The USA just got BITCH SLAPPED and hard, and what the fuck are they going to do? Have a war with CHINA?

Wed, 05/07/2014 - 09:29 | 4735545 shovelhead
shovelhead's picture

I love this guy... The Howard Johnson of ZH.

 

27 different flavors of crazy.

Wed, 05/07/2014 - 09:33 | 4735558 FredFlintstone
FredFlintstone's picture

Do you mean Baskin Robbins? He is a great read for sure.

Wed, 05/07/2014 - 05:45 | 4735209 ptolemy_newit
ptolemy_newit's picture

obimbo,

Show us your list

 China had helped other developing countries build 442 economic infrastructure projects, including:

1.           

The Sana’a-Hodeida Highway in Yemen

2.           

The Karakoram Highway and Gwadar

3.           

Port in Pakistan The Tanzania-Zambia Railway

4.           

The Belet Uen-Burao Highway in Somalia

5.           

The Dry Dock in Malta

6.           

The Lagdo Hydropower Station in Cameroon Nouakchott’s Friendship Port in Mauritania

7.           

Railway improvements in Botswana

8.           

Six bridges in Bangladesh

9.           

One section of the Kunming-Bangkok Highway in Laos

10.        

The Greater Mekong Sub-region Information Highway in Myanmar

11.        

The Shar-Shar Tunnel in Tajikistan

12.        

The No.7 Highway in Cambodia

13.        

The Gotera Interchange in Addis Ababa of Ethiopia

 http://www.china-briefing.com/news/2013/03/27/china-the-great-infrastructure-developer.html

 

http://www.china-briefing.com/news/2014/02/27/chinas-agreement-with-asean-what-it-means-for-china-based-foreign-manufacturers.html

 

http://www.asiabriefing.com/news/2014/01/china-build-high-speed-railway-southeast-asia/

Wed, 05/07/2014 - 06:42 | 4735241 Lumberjack
Lumberjack's picture
China is going to make this same move re: South China Sea. I brought this up on another thread here at ZH a few days ago. Moscow Closes Okhotsk Sea to Outsiders

http://www.jamestown.org/single/?tx_ttnews%5Btt_news%5D=42282&tx_ttnews%...

 

In a move that both exacerbates international conflicts in the Western Pacific and suggests how Moscow plans to proceed in the Arctic, Russian President Vladimir Putin has closed to all outside shipping and fishing the entire Sea of Okhotsk—some 52,000 square kilometers of water that had been open to other countries for fishing and deep-water exploration.

Putin took this step after Russia secured international recognition of Moscow’s claim that the Russian continental shelf extends under the entire seabed of that body of water under the terms of the United Nations Convention on the Law of the Sea. Putin told the Russian Security Council that “our experts—based on scientific data—found weighty arguments that testified about the incontestable right of Russia to this area. Consequently, the Plenum of [the UN commission] agreed with our conclusions and formulated the corresponding recommendations” (ng.ru/nvoevents/2014-04-25/2_news.html).

Moscow has long been seeking this decision, and its victory means that Russia will now be able to invoke international law to block all other countries from fishing or engaging in any other activities, including seabed prospecting and mining. Despite the fact that it has attracted only minimal attention in the West—although it has been the focus of much concern in Japan and China—this new decision is extremely important for at least five critical reasons...

 

...First, it closes a major fishing area to Japan and China, depriving them of an important harvest and forcing them to compete even more intensively elsewhere in the Western Pacific where tensions between the two Asian powers have been growing. Indeed, those tensions are now so great that US Secretary of State John Kerry felt compelled to tell Japan that the United States will ensure the security of its land territory (RT, February 7). But Kerry’s statement did not address an even more critical issue in Japan: China’s and now Russia’s imposition of economic exclusion zones in the oceans. To counter that, Tokyo presently feels compelled to build a larger navy (japanfocus.org, April 28), and some in Japan may even feel the need to develop a nuclear capacity.


Second, the expansive Russian claim on the Sea of Okhotsk will only further embolden China to make claims in the oil-rich South China Sea, claims that are already sparking conflict between Beijing, on the one hand, and Tokyo and Washington, on the other. China will certainly invoke the Okhotsk decision in order to secure its own Law of the Sea (LOS) sanctions.

Wed, 05/07/2014 - 07:06 | 4735263 Lumberjack
Lumberjack's picture

Furthermore: http://rt.com/news/okhotsk-sea-shelf-russia-038/

 

According to Donskoy, the UN decision is also “the first step in our Arctic applications, which will be ready in the near future.”

Russia’s Arctic claims include the huge seabed area of the Lomonosov Ridge and the Mendeleev Dome, which reach out into the floor of the Arctic Ocean as part of Russia’s continental shelf. Other countries that have claims on the Arctic seabed include Canada, Denmark, Finland, Iceland, Norway, Sweden and the United States.

----------------------

From what I gather, the US has never signed off on the LOS (about 160 countries have so far) and doesn't have a seat in the decision making process.

Wed, 05/07/2014 - 23:32 | 4738584 matrix2012
matrix2012's picture

what an interesting foundation... THE JAMESTOWN FOUNDATION

 

Their board members are filled up with those high calibre names such as ex-NSC; ex-Pentagon; ex-CIA Director (Michael V. Hayden); RAND Director/VP; ex-CINCPAC/NORTHCOM/NORAD Commander; etc...

 

http://www.jamestown.org/aboutus/boardmembers/

Wed, 05/07/2014 - 06:56 | 4735254 Reader1
Reader1's picture

OK, so they're upset.  Exactly what did they intend to do about it?  I don't see them drilling there.

And don't hold your breath waiting for America to some save you.  We're far too busy saving Nigerian schoolgirls gone wild to help with a real problem, besides, you didn't want our help the last time we stopped by...

 

Wed, 05/07/2014 - 06:59 | 4735256 RazvanM
RazvanM's picture

No red line, just a red circle with President Obama in the middle.

Wed, 05/07/2014 - 07:17 | 4735268 negative rates
negative rates's picture

Surrounded by egg heads.

Wed, 05/07/2014 - 07:31 | 4735286 lakecity55
lakecity55's picture

The only success The Bath House has had has been the improvement of the Police State.

Every single thing else has been a 100% failure.

Wed, 05/07/2014 - 07:37 | 4735290 overmedicatedun...
overmedicatedundersexed's picture

the mob understood, you got the force, you get the spoils ...china been building war ships and planes to enforce the law of the jungle, obuma busy planning golf and vacations..while nazi nuland and jarrett run the government.

Wed, 05/07/2014 - 07:52 | 4735310 nickt1y
nickt1y's picture

Yeah a Cluster FUBB.

Wed, 05/07/2014 - 07:22 | 4735274 buzzsaw99
buzzsaw99's picture

where is nuland when you need her? fuck vietnam.

Wed, 05/07/2014 - 07:28 | 4735281 headhunt
headhunt's picture

You would think all of these communist leaders would agree about everything.

Russia, China, US - just saying...

Wed, 05/07/2014 - 07:29 | 4735284 lakecity55
lakecity55's picture

Well, good for the PRC. They need oil and are looking for some.

Everywhere I have been in Asia, the Chinese are building infrastructure. The USG is spending its dime trying to overthrow governments.

Is it any wonder the Asians were not cool with the Bath House "pivot?"

I know it won't happen with the current crowd, but the US needs a reversal of foreign policy.

Wed, 05/07/2014 - 08:16 | 4735349 vyeung
vyeung's picture

obozo, here's another bird!

I'm sure China will provide Vietnam a sweet deal on the oil to keep things balanced in the region. This is purely to give the US the bird and to confuse the crooks in DC.

Wed, 05/07/2014 - 09:39 | 4735580 shovelhead
shovelhead's picture

Let's send McCain to negotiate a settlement.

Meet old friends, relive the good old days...

He might blow a gasket and be sent home in a strait jacket.

Winning.

Wed, 05/07/2014 - 12:00 | 4736267 teslaberry
teslaberry's picture

i don't think the soviet union russia is going to back the vietnemese against the cambodian chinese invasion this time around. 

without the kmer , and the communist of north korea---------it looks this time like vietnams' only backer is the good ol' usa. 

funny, historical irony at its best. 

 

say, how's about that war , ya know. the one 40 years ago. we americans would love to help you out vietnam , just like we help syria and ukraine gain their freedom and democracy, only we're going to need to collaterlize your gold first to lend you money to buy our weapons. oh yea, one last thing, that means we'll have to be storing your gold at our vaults in new york or brussels. oh and if you could just get as much of your vietnemese peasants gold rings and bracelets, we'll even give you drones. 

 

oh yea, we cannot promise you victory agianst the chinese, but whatever deal we cut with the chinese behind your backs is sure to include a golden parachute for your oligarchs and leaders to live in taiwan paris hong kong or new york with lavish apartemtns and caviar . 

it's just busines.....

 

napalm kisses.

love

uncle samerica.

Thu, 05/08/2014 - 09:51 | 4739491 Squids_In
Squids_In's picture

The trade here is long Husky - the world needs more Oil and God loves a driller.  

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