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How China's Offshore Oil Driller Will Keep Grip in Disputed Sea Despite US
Sanctions

Ralph Jennings

   TAIPEI - The United States imposed sanctions this month on a major
   Chinese offshore oil driller that Washington considers aligned with the
   Chinese military. But some regional experts say the oil and gas
   company, which counts U.S. citizens among its investors and does
   billions of dollars of work including in the contested South China Sea,
   will find ways to remain China's commercial flagbearer.

   The U.S. government on December 3 banned U.S. citizens and companies
   from trading shares of China National Offshore Oil Corporation (CNOOC)
   following an executive order from the White House in November.
   Washington sees CNOOC as the Chinese government's military partner.
   It's the first oil and gas company on a long-standing list of 35
   Chinese firms facing the same sanctions.

   Analysts say CNOOC's American investment, estimated by financial media
   outlets at 16 percent, won't slow the company, which has more than $33
   billion in annual sales. They suggest the state-run firm with a
   publicly traded subsidiary will find other funding sources, including
   the Chinese government. Oil rig equipment and supplies can be found
   largely outside the United States, said Alexander Vuving, professor at
   the Daniel K. Inouye Asia-Pacific Center for Security Studies in
   Hawaii.

   It's also unclear whether U.S. President-elect Joe Biden will toughen
   the sanctions, said Mark Valencia, an adjunct senior scholar at China's
   National Institute for South China Sea Studies.

   Ultimately CNOOC will keep its prowess as an extension of Beijing's
   influence over the contested 3.5 million-square-kilometer South China
   Sea stretching from Hong Kong, the analysts say. Brunei, Malaysia, the
   Philippines, Taiwan and Vietnam have claims in the same sea, which is
   rich in fossil fuel reserves.

   "CNOOC is not just a company, but it's also on the forefront of China's
   sovereignty struggles, sovereignty combat, against the other
   countries," Vuving said.

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