"I advise companies not to take that risk now," said Chris Nevin, research director of IDC Energy Insights. "It's a question of, 'Is there a better place to dig for oil?' At least in the Middle East, you know what you're getting into. In the South China Sea, you don't even know who owns the area you're drilling in."
Read MoreWhat is China's end-game in South China Sea?
The South China Sea, including areas near Malaysia, Brunei, and Taiwan, is estimated to hold between 5 billion and 22 billion barrels of oil, and between 70 trillion and 290 trillion cubic feet of gas, according to the Energy Information Administration. Research firm IHS points out that those estimates are considerably lower than in other areas like the Antarctic.
But many firms remain wary about the region. Chevron, the second-largest U.S. oil company, has been in talks with other firms to sell its stake in an offshore project with PetroVietnam off Vietnam's southern coast. Those talks are ongoing.
Read MoreIn the heart of the Vietnam-China standoff at sea
Filipino oil company Philex Petroleum, the majority owner of London-based Forum Energy, sought a partnership with China's state oil firm China National offshore Oil Corp. (CNOOC) to explore the disputed Reed Bank area, but the chairman of Philex told the Associated Press last month that it's received no response from CNOOC. The executive, Manuel Pangilinan, noted that the project has failed to draw other investors because of conflicting claims on the region.