Back in early June, Geoff Miller asked: 'are resource constraints driving China's Asia's policy?' A recent stock exchange filing by China's state-owned oil company CNOOC may illuminate Chinese motivations.

Researchers have previously noted the significant long-term decline in CNOOC's domestic offshore oil reserve life. Based on updated information presented in the filing, and assuming CNOOC's forecast production rates, the company may run down its reserve life to barely six years by 2015*. This compares to almost 15 years in 2001, and it is well below the 10 years normally considered comfortable for an 'upstream' oil exploration company.

CNOOC has traditionally been Beijing's offshore monopoly producer, so the condition of CNOOC is critical to China's future energy strategy. CNOOC is also the owner and operator of the HYSY-981 oil rig which, until recently, was drilling in contested waters in the South China Sea, although CNPC, a less experienced offshore operator, may have usurped CNOOC's leadership of this expedition, possibly for internal political purposes.

To be clear, one data point cannot show a definitive picture of either China's offshore hydrocarbon situation or its foreign policy intent. But it is revealing enough to make a debate worthwhile.

Some caveats: first, estimating oil and gas reserves is a notoriously tricky business, so difficult that most oil companies bring in outside specialists to verify what they are sitting on. In the footnotes of its stock exchange filing, CNOOC states that it is relying more on internal assessments rather than these foreign consultants; this may or may not be significant. Second, the SEC filing method allows only those oil fields planned for production within five years to be counted in reserves. That is conservative, and there are other, more generous, measures used in the industry such as the 3P system. Third, as noted above, because CNOOC intends to accelerate offshore China production by 20% next year, this mathematically reduces apparent reserve life. And fourth, CNOOC is looking further afield and has invested in foreign properties such as Canada's Nexen.

What is beyond dispute is that historically, CNOOC has not replaced its stated reserves sufficiently quickly to offset its production increases. CNOOC has been investing heavily, but its prospects have disappointed. True, there may be more oil and gas that CNOOC is developing and is not yet visible. But even if HYSY-981 strikes oil in the South China Sea, it may take years to turn into a full-fledged production platform. Outsiders have little more than the SEC filing to judge what resource trajectory CNOOC really faces.

And that is the interesting question here. Beijing takes a strategic view of energy security (as it should) and it views oil reserve information as sensitive. Beijing often takes a minimalist approach to disclosure; its tradition is to yield information and concessions reluctantly. Whatever is not deliberately disclosed, such as the SEC filings, will be considered a 'state secret.'

Moreover, whenever possible China's state oil companies keep things internal rather than outsourcing to private and foreign oilfield service firms and international consultants. This is becoming increasingly challenging for the state behemoths because they require ever-growing efficiency and specialisation, but there remains a strong will to develop indigenous and in-house technologies. No multinational contractors are manning the HYSY-981 platform; it is a Chinese-run show. Beijing is wary of privatisation in the upstream oil sector because it fears giving away too much. So while we are witnessing reform of state-owned enterprises such as in Sinopec's downstream division, we won't see a repetition of the dreaded post-Soviet 'reform' experience where carpet-baggers snapped up oilfields on the cheap.

Finally, we know that CNOOC itself may view the South China Sea as a treasure of unimaginable scale, reportedly some 125 billion barrels in potential resources. This assessment may be vastly exaggerated; although the sea is considered to be geologically promising, the contested waters generally are not. As one recent commentary put it, 'it's not about the oil, it really is about the tiny rocks.' But whether the Chinese see this as a matter of sovereignty or resources, they are expanding their offshore fleet.

In summary, we can only glimpse an incomplete picture of China's oil security, but the small window we have shows a rapidly depleting resource base. This must be concerning to policymakers and likely will spur greater efforts in domestic development (such as shale gas and other unconventional sources) as well as offshore prospecting. What we are seeing in the South China Sea may be the early manifestation of what Geoff Miller calls 'a much harsher view' of Beijing's energy security dilemma.

* For interested readers, this figure can be calculated using the 1.69 billion of proven crude and liquid reserves on p.29 of the filing, 2013's daily production rate of 610,000 barrels (p.43), and assuming 20% higher production in 2015 with 100% incremental reserve replacement rate.