Philippines and China – An Encounter in Reed Bank - STRATFOR Report

Summary

THE Philippines decided in February to move forward with exploration activities in the Reed Bank, a group of small islands contested by several countries in the region, including the Philippines and China. On March 2, two Chinese patrol boats reportedly threatened to ram a Philippine research vessel in the area, which suggests that China is maintaining an assertive stance on sovereignty claims in the South China Sea.

Analysis

On March 2, the Philippine government dispatched two military observation planes—an OV-10 Bronco and a BN-2 Islander—to Reed Bank, a small group of islets west of the Philippine island of Palawan in the South China Sea. The mission was to investigate reports that two Chinese patrol boats had harassed a Philippine Department of Energy vessel that same day. Lt. Gen. Juancho Sabban, head of the Western Command of the Armed Forces of the Philippines (AFP), said two white Chinese patrol boats labeled No. 71 and No. 75 threatened to ram the research vessel M/V Venture, which was conducting a seismic survey in the Reed Bank area, prompting the vessel to call for help from the AFP and the Philippine Coast Guard.

According to Sabban, the Chinese patrol boats (or “naval gunboats,” as described by The Philippine Star) fled the area before the planes arrived, while the research vessel continued with its activities. Sabban stressed that no shots were fired, there was no confrontation and resolution of the incident is now up to political authorities. The Chinese Embassy and Foreign Ministry have not responded to Philippine requests for information.

Reed Bank, east of the Spratly Islands, is disputed by China, the Philippines, Taiwan, Malaysia, Brunei and Vietnam. But the Philippines has long argued that the Reed Bank islets are separate from the Spratlys. The Philippines has allowed domestic and foreign companies to conduct exploratory drilling in Reed Bank since 1976, but not much has come of it. In 1995 and 1998-1999, confrontations occurred between China and the Philippines over China’s construction of facilities on nearby Mischief Reef. The Philippines claimed that China’s activities on the reef also enabled it to push its claims eastward to try to interfere with Philippine exploration in the Reed Bank area, where the Philippines completed a seismic survey in June 1995.

There does appear to be a recent trigger for the March 2 incident. In 2010, the British firm Forum Energy decided, after some Philippine government prodding over idle projects, to go ahead with further exploration in the “Service Contract 72” (SC72) area, formerly known as the “GSEC101” block, which covers the Reed Bank area. In the first half of 2011, Forum was to conduct three-dimensional seismic surveying in the area around its existing Sampaguita Gas Field, as well as two-dimensional surveying elsewhere in the Reed Bank area.

The Philippine Department of Energy granted permission for Forum to go forward in early February. Earlier surveys suggest that 96 billion cubic meters of natural gas and 440 million barrels of oil are held in the SC72 area; if accurate, this would be comparable to the Philippines’ existing proven natural gas reserves and Thailand’s proven oil reserves.

China has increased its patrolling and patrolling capability in its peripheral seas, including the South China Sea, where its sovereignty claims have grown more assertive in the past four years. In response, the United States has pledged much deeper involvement in Asia-Pacific territorial disputes and claimed that security in the South China Sea is in its “national interest.” On Feb. 20, U.S. Pacific Command chief Adm. Robert Willard pledged to continue assisting the Philippines in “safeguarding its territorial integrity and security,” specifically by helping it patrol the South China Sea.

The full details of the March 2 incident have yet to emerge. For instance, it is not clear whether the Chinese vessels were civilian patrol ships from one of China’s many fisheries and oceanic bureaus or whether they were naval vessels from the People’s Liberation Army Navy. What is clear is that the Philippines decided in February to move forward with exploration activities that China opposes, and Chinese ships threatened to ram a research vessel. China’s reaction suggests it is maintaining its assertive stance on sovereignty claims in the sea, which means the Philippines must continue weighing its security interests against its desire not to harm economic ties with China. Needless to say, there is no immediate solution to this territorial dispute.