By MarEx

China has started dredging around the disputed Mischief Reef in the South China Sea, a Philippine navy commander said on Thursday, signalling Beijing may be preparing to expand its facilities in the area.

Last year, Chinese President Xi Jinping tried to set Southeast Asian minds at ease over the country’s regional ambitions, but Beijing’s reclamation work in the Spratlys underscores its drive to push claims in the South China Sea and reassert its rights.

China has already undertaken reclamation work on six other reefs it occupies in the Spratlys, expanding land mass five-fold, aerial surveillance photos show. Images seen by Reuters last year appeared to show an airstrip and sea ports.

China has claims on almost the entire South China Sea, which is believed to have rich deposits of oil and gas.Brunei, Malaysia, the Philippines, Vietnam and Taiwan also have claims on the sea where about $5 trillion of ship-borne trade pass every year.

Rear Admiral Alexander Lopez, commander of the Philippine military’s western command, told reporters on Thursday a Chinese dredging ship was spotted at Mischief Reef, about 135 km southeast of the island of Palawan.

“We don’t know what they plan to do in Mischief,” he said. “They have long been doing that, only that it was Fiery Cross that got a lot of attention because that was on a bigger scale.”

IHS Jane’s said in November images it had obtained showed the Chinese-built island on the Fiery Cross Reef to be at least 3,000 meters (1.9 miles) long and 200-300 meters (660-980 ft) wide.

Lopez did not say when China started the dredging work or give any details on the extent of reclamation at Mischief Reef, saying only the work had been “substantial”.

Surveillance photos that were taken of Mischief Reef last October showed no reclamation work in the area.

The photos, seen by Reuters, showed two structures, including a three-story building sitting on an atoll, equipped with wind turbines and solar panels.

China occupied Mischief Reef in 1995, building makeshift huts, which Beijing claimed provided shelter for fishermen during the monsoon season. But, China later built a garrison in the area, deploying frigates and coast guard ships.

In 2002, Southeast Asian states agreed with China to sign an informal code of conduct in the South China Sea to stop claimant states from occupying and constructing garrisons in the disputed Spratlys.

Last year, the Philippines and Vietnam protested China’s reclamation work as a violation of the informal code.

North of Mischief Reef, China on Thursday defended the actions of a coast guard vessel in the Scarborough Shoal after the Philippines accused it of ramming three fishing boats.

“China’s coast guard sent a dinghy to drive them away and slightly bumped one of the fishing vessels,” Chinese Foreign Ministry spokesman Hong Lei said at a daily news briefing in Beijing.

“We ask that the Philippines strengthen education and indoctrination of its fishermen to prevent such incidents from happening again.”

A Philippine military spokesman, Colonel Restituto Padilla, described China’s action as “alarming” saying the local fishermen were trying to seek shelter due to bad weather.

By Manuel Mogato (C) Reuters 2015.

By MarEx

A pirate attack that killed a supertanker crewman off the coast of Nigeria this week has highlighted a growing threat off oil-rich West Africa, as vessels carrying millions of barrels of crude traverse a region that has become known as “pirate alley”.

The 2 million barrel Kalamos Very Large Crude Carrier (VLCC) was heading to Nigeria’s main oil terminal when it was attacked late on Monday, leaving the ship’s Greek deputy captain dead and three crew members taken hostage.

Security experts say the waters off Nigeria are now the deadliest on earth, surpassing Somalia on Africa’s east coast, which gained notoriety due to months-long hijackings, high-cost ransoms, and U.S.-led rescue missions such as the one that inspired Hollywood movie “Captain Phillips”.

“It’s referred to as pirate alley – kidnap alley,” said Ken Johnson, regional analyst with Dryad Maritime, referring to the stretch of West African coast from the Gulf of Guinea off Nigeria to as far south as Angola’s capital Luanda.

Johnson, who provides operations and intelligence advice to the shipping industry, said there was another deadly attack on a ship in the region last month when pirates killed a Nigerian naval seaman aboard the oil support vessel MV Jascon.

Another attack last year on an oil products tanker, the SP Brussels, killed one crew member, Johnson said.

Neither Indian refiner Bharat Petroleum Corporation Limited (BPCL), which chartered the Kalamos tanker that was attacked this week, nor the manager of the vessel, Greek shipping firm Aeolos Management, returned calls for comment.

Cyrus Mody, assistant director of the piracy-tracking International Maritime Bureau said the waters off Nigeria are now the deadliest in the world “by any length”, despite attention still focused on Somalia and the Gulf of Aden.

“(The Gulf of Guinea) is not perceived as bad as it is,” Mody said.

Mody said incidents in the region were hugely underreported due to fear of further attacks, concerns over insurance or a belief that information on vessels is sensitive or proprietary.

Oil tankers make relatively easy targets for Nigerian-based pirates who usually want hostages to ransom, but will also sell stolen fuel.

Security experts say the pirates have emerged from militant groups in Nigeria’s oil-producing Niger Delta, such as the Movement for the Emancipation of the Niger Delta (MEND).

These groups have long targeted oil infrastructure and foreign companies in the region, arguing the Niger Delta has been left impoverished despite production of almost 2 million barrels of oil per day in Nigeria.

The situation is further complicated by the government’s ban on foreign armed guards in its waters – a method that has been used to deter pirates off Somalia and Yemen.

Security experts said most companies know the risks in the region well.

“It hasn’t stopped or slowed down trading,” said Johnson at Dryad.

The danger is already priced into premiums that insurers charge for entering the region, said Dominic Enderby, marine hull practice leader for Marsh, a global insurance broker.

While costs varies widely, the premium is generally “a few thousand dollars” per voyage – not enough to increase costs significantly for a tanker that may carry more than $100 million worth of crude.

“It’s not going to change the price of our oil,” Enderby said.

“These attacks are part and parcel of operating in this part of the world.”

By Libby George (C) Reuters 2015.