Indonesia approves first phase of key offshore gas development

ASEAN Pace | Economy | Southeast Asia

Indonesia’s government has approved the first phase of its development of the Tuna offshore gas field in the South China Sea, Reuters reported yesterday, just over a year after a protracted standoff with China over disputed waters near the natuna islands.

The announcement was made yesterday by SKK Migas, the country’s upstream oil and gas regulator, which said the field would require a total investment of around $3.07 billion. Located in the South China Sea, near the maritime border between Indonesia and Vietnam, the Tuna field is expected to produce 115 million standard cubic feet per day by 2027, SKK Migas spokesman Mohammad Kemal was quoted as saying by Reuters. Much of this will reportedly be exported to vietnam.

As in many parts of the South China Sea, resource exploitation also has implications for simmering maritime disputes between China and rival claimants Malaysia, Vietnam, Brunei, the Philippines and Indonesia, as SKK Migas Chairman Dwi Soetjipto acknowledged. , it’s a statement. yesterday.

“There will be activity in the border area, which is one of the geopolitical hot spots in the world,” Dwi said. said in the statement, according to Reuters. “The Indonesian navy will also participate in the security of the upstream oil and gas project so that, economically and politically, it becomes an assertion of Indonesian sovereignty.”

The Tuna block, which was discovered by Harbor Energy in 2014, is located approximately 140 nautical miles north of Natuna Besar, the main island of the Natuna archipelago. Although the block lies within Indonesia’s 200-nautical-mile Exclusive Economic Zone (EEZ), which under international maritime law gives it the exclusive right to exploit any resources present within the zone, China’s bold claim to the Much of the South China Sea, which includes large swaths of exclusive economic zones of rival claimants, has prevented the work from moving forward.

Do you enjoy this article? Click here to subscribe for full access. Just $5 a month.

Over the past decade and a half, Chinese coast guard vessels and maritime militias have disrupted oil and gas exploration and drilling by Vietnam, Malaysia and the Philippines in their respective EEZs. There have also been numerous incidents where the Chinese coast guard and fishing boats have entered Indonesia’s EEZ near the Natuna Islands, which are split in two by China’s “nine-point line” claim. Some have implicated Indonesian authorities chasing down and trying to stop Chinese trawlers, prompting interventions by Chinese coast guard ships.

China has also tried to prevent Indonesia’s attempts to develop the Tuna gas field. Such as the Asia Maritime Transparency Initiative of the Washington-based Center for Strategic and International Studies noted In 2021, Chinese police ships maintained a months-long presence around the Tuna block beginning in July of that year, after a semi-submersible rig, the Noble Clyde Boudreaux, arrived to drill two appraisal wells on behalf of the company with headquarters in the UK. Premier Oil (now Harbor Energy).

Over the next four months, the Chinese and Indonesian ships followed each other around the oil and gas field, sometimes coming unnervingly close. At the same time, China sent an inspection ship, the Haiyang Dizhi 10, which spent seven weeks inspecting an adjacent gas field. During the standoff, Reuters reported that the Chinese government told Indonesia to stop drilling of oil and natural gas in areas claimed by China. He also reportedly protested Indonesia’s 2017 decision to rename of the waters within its EEZ to the North Natuna Sea, to assert its sovereignty over the area.

Therefore, Indonesia’s announcement that it is moving forward with development of the Tuna block is likely to provoke a quick reaction of some kind from Beijing, despite Jakarta’s clear right to exploit these resources under international maritime law. As such, we can expect more tense encounters around the Natuna Islands in 2023.