Indonesia faces increasing Chinese pressure at sea
JAKARTA – Indonesia faces new confrontations with China if a British and Russian consortium proceeds with the development of a natural gas discovery that will involve laying a pipeline across the northern border of the Natuna Sea to connect to Vietnam’s existing offshore grid.
Partners Harbor Energy and Russian state oil company Zarubezhneft have announced the discovery of a modest raw gas resource of 600 billion cubic feet, about 45% of which is in the form of condensate, a marketable mixture of light liquid hydrocarbons.
The results follow the drilling of two appraisal wells in the Tuna Block, about 10 kilometers from the edge of Indonesia’s Exclusive Economic Zone (EEZ), which continued despite protests from Beijing that the concession is located within its line of nine national sovereignty over the South China Sea.
With US Secretary of State Antony Blinken in Jakarta last week, the episode once again highlighted growing concern over what the top Washington diplomat described as China’s “aggressive actions” in a rear – maritime court which it claims as its own.
Throughout the drilling program, between August and October, a Chinese research vessel – escorted by two armed Chinese Coast Guardsmen (CCGs) – carried out an intensive seabed mapping exercise in the waters around the platform. exploration.
Although the flotilla was followed by up to nine patrol boats from the Indonesian Navy and the Maritime Safety Agency, the government has remained silent about the unprecedented seven-week incursion and has not said there had had a diplomatic engagement on the incident.
But an administration source confirms that the Indonesian Foreign Ministry actually sent a protest note to Beijing at the time and says the government is serious in supporting the development of the bloc in relatively little water. 100 meters deep – if only to make a point. .
Now that Beijing has shown that it is ready to establish a presence inside the Nine-Dashed Line in waters claimed by Indonesia, its response will be closely watched. “I don’t think they (the Chinese) will go away from it,” said a naval analyst. âI’m sure we’ll continue to see some level of harassment. “
Oil and gas experts believe China’s actions will be limited to little more than saber strikes. “They will let the development continue,” predicted an experienced Jakarta-based consultant. “It’s too small a scale to make a big deal out of it.”
In fact, with the condensate drain in the first four or five years, the gas supply itself should run out five years later, unless the partners find additional reserves. âIt’s not a long-term asset,â explains the consultant.
Harbor said a final investment decision is not expected until 2023, covering how long it will take upstream regulator SSKMigas to approve a development plan and a gas sales agreement finalized with Vietnam.
In 2017, with the consent of the Indonesian government, Harbor signed a memorandum of understanding to sell gas from the block to state-owned company PetroVietnam, delivered via a 70-kilometer pipeline to its Nam Con Son offshore pipeline system.
To avoid getting drawn into the politics of the great powers, Harbor may decide to sell its 50% stake in Tuna or cede control of the operation to Zarubezhneft, which has had a relationship with PetroVietnam since 1981.
The Moscow-based company recently bought out interests in Russian oil producer Rosneft in Vietnam, including a 33% stake in the pipeline and two exploration and development blocks in the Nam Con Son Basin, 375 kilometers to the south. -is from Vung Tau.
Previously known as Premier Oil, Harbor is already supplying gas to Singapore from the maturing West Natuna production block and owning a 40% stake in a new field off the North Sumatran offshore that could contain up to 12 trillion cubic feet (TCF), potentially making it the largest find in Indonesia in decades.
Still grappling with debt caused by the 2017 oil crash, Harbor pulled out of a US $ 1.8 billion project in the Falkland Islands and other interests in Brazil and Mexico in favor of a acceleration of drilling in the low risk environment of the North Sea.
Whether he also pulls out of Indonesia will likely depend on the results of a new appraisal well planned in his Andaman II deep-water block, 150 kilometers off the Aceh coast, which could be a game-changer for industry if it keeps its promises. .
Meanwhile, China’s shadow will continue to hang over Tuna and other oil and gas fields inside the nine-dash line, a historic anomaly unrecognized by the Convention of Nations. United Nations on the Law of the Sea (UNCLOS).
Indonesia is not alone. Chinese ships continue to harass the exploration and development activities of Malaysian state oil company Petronas in the Luconia Shoals, which lie inside the country’s EEZ and are believed to contain around 3 TCF of gas.
Vietnam has also been a constant target of Chinese harassment, with Spanish oil company Repsol twice forced to cease operations – in 2017 and again in 2019 – in exploration blocks where the nine-dash line of the China interferes in the Vietnamese EEZ.
Unlike Indonesia, Malaysia and Vietnam are both among the six claimants from the disputed Spratly Islands in the South China Sea. Vietnam’s Vanguard Bank, the scene of several clashes with Chinese ships in recent years, is the westernmost reef of the Spratleys.
While Indonesia has avoided taking sides in the growing rivalry between the United States and China, China’s actions in recent years have required it to dramatically improve surveillance of its northern borders using technology standard and increased maritime patrols.
The Americans continue to resist the idea of ââdeclassifying and passing on to Indonesians information obtained from military satellites, such as the longitude, latitude and headings of Chinese warships and research vessels entering Indonesian waters.
Most naval vessels usually turn off their Automatic Identification System (AIS) to make detection more difficult on the high seas, but they are expected to activate the devices in high traffic areas – a practice that the Chinese often ignore.
Earlier this year, Indonesia intercepted a Chinese research vessel, which had mysteriously turned off its transponder three times during a two-day passage through the Java Sea and the Sunda Strait, separating Java and Sumatra.
Other Chinese investigative vessels are believed to have dropped off three underwater data collection drones discovered off the Natuna Islands, South Sulawesi and on northern approaches to the Lombok Strait in the past two years.
During his visit to Jakarta, the first step in a Covid-curtailed swing across the region, senior US diplomat Blinken said Washington would strive to uphold a “rules-based order” in which countries had control. right to “choose their own path”.
“This is why Beijing’s aggressive actions are causing so much concern – from Northeast Asia to Southeast Asia and from the Mekong to the Pacific Islands -” he continued in a statement. otherwise fairly moderate statement.
“Claiming open seas as theirs. Distortion of open markets by subsidies to its state-owned enterprises. Deny exports or revoke agreements for countries whose policies it disagrees with.
“Countries in the region want this behavior to change,” he said. ” U.S. too. That is why we are determined to guarantee freedom of navigation (in the South China Sea) where Beijing’s aggressive actions threaten the movement of more than $ 3 trillion in trade each year.
President Joko Widodo had barely taken Bilken out before welcoming Russian Security Council Secretary Nikolai Patrushev, a taste of the pressures he can expect as host of next year’s G20 summit in Bali.
Two days later, Russian President Vladimir Putin and Chinese President Xi Jinping met at a video summit where they expressed solidarity against recent military deployments by the United States, Britain and others. Western allies in the Asia-Pacific region.
Signs of a more comfortable relationship between Beijing and Moscow have led analysts to question whether China will continue to assert its demands on the tuna block if it becomes a Russia-led operation. But one thing seems clear: With its economy increasingly dependent on China, Indonesia will find it difficult to resist Beijing’s application of the nine-dash line.
As Indonesian maritime expert Evan Laksmana put it in a recent article: âSpecifically, China hopes its regular forays into the northern Natuna Sea will eventually lead Indonesia to ‘negotiate’ an agreement that recognizes implicitly China’s illegal claims to the region. “