Protect Malaysia’s O&G resources in South China Sea, govt told

Bersatu’s Wan Ahmad Fayhsal Wan Ahmad Kamal and Saifuddin Abdullah say the risks of foreign interests jeopardising Malaysia’s energy sovereignty should not be underestimated.

In September last year, Prime Minister Anwar Ibrahim said Petronas’s exploration activities in the South China Sea will continue, insisting that the country was operating within its territorial limits. (AFP pic)

PETALING JAYA:

 Two opposition MPs have called on the federal government to strengthen Malaysia’s maritime defence to protect the country’s exclusive economic zone (EEZ) in the South China Sea, home to several valuable oil and gas fields operated by Petronas.

Bersatu’s Wan Ahmad Fayhsal Wan Ahmad Kamal warned that repeated incursions by Chinese naval vessels, if left unchecked, could have serious consequences on the country.

“Some matters can be resolved through negotiation at the diplomatic table, but at certain times, we must also be ready and aggressive enough to show that we mean business in defending our territorial waters,” he told FMT in an exclusive interview.

China has, through its controversial nine-dash line map, asserted sovereignty and made maritime claims over territories within the 200 nautical-mile (370km) EEZs of Vietnam, the Philippines, Malaysia and Indonesia. Its claims contravene the legal framework for maritime boundaries and EEZs set out in the United Nations Convention on the Law of the Sea 1982.

In September 2024, Prime Minister Anwar Ibrahim reaffirmed Malaysia’s commitment to continuing its oil and gas exploration activities in the South China Sea. He said all operations were conducted within Malaysia’s jurisdictional limits and were not intended to provoke or antagonise China.

Petronas, which oversees two oil and gas exploration projects in the South China Sea near Beting Patinggi Ali, has had several encounters with Chinese vessels in recent years.

According to Asia Maritime Transparency Initiative (AMTI), a US think tank, at least one Chinese coast guard vessel entered and operated in Malaysian waters every day between Jan 1 and Sept 27 last year.

In November, Singapore’s Straits Times reported AMTI as saying that the Chinese coast guard had been operating for a month up to 2.4km away from Petronas’s Kasawari gas development project, with a Malaysian navy ship also patrolling the area.

With Petronas and Petroleum Sarawak Berhad (Petros) still hammering out the terms for oil and gas governance in the state, Wan Fayhsal, a Bersatu Supreme Council member, called for both the federal and state governments to resolve all differences between them expeditiously.

He warned that delays on either side could leave the nation’s EEZ vulnerable to incursions by the Chinese navy.

“It is a federal duty to protect Petronas’s assets in the South China Sea. It goes beyond political parties and state interests. It is of Malaysian interest.

“If there is some sort of parochial, state-centric mindset about national security, I’m worried that, in the long run, the morale of our defence forces will be compromised,” he told FMT.

‘Will Petronas, Petros be able to do it together?’

Former foreign minister Saifuddin Abdullah expressed confidence in the nation’s defence capabilities and commended Anwar for his staunch defence of oil and gas exploration activities at the Kasawari gas field in the face of objections from Beijing.

“The government did a good job by saying: ‘It’s none of your business. This block is within our waters. This is our sovereignty, and we are free to do whatever with that.’”

“Sovereignty and security, and the navy in this particular case, are a federal duty. I believe the Malaysian government—whoever is in Putrajaya—will still provide the necessary protection,” he told FMT.

Last year, the federal government announced that it will enhance military protection for East Malaysia by building a new naval base in Bintulu, Sarawak, adding to three others already located in East Malaysia – situated in Labuan, Teluk Sepanggar and Sandakan.

Saifuddin, also a Bersatu Supreme Council member, said the key challenge now lies in whether Petronas and Petros can reach a mutually beneficial agreement that ensures the nation’s oil and gas sovereignty is not compromised by foreign interests.

“Would Petronas and Petros be able to do it together? What if they were required to invite other foreign parties to come in? That is going to be the tricky part,” he said.

Petronas and Petros have been in protracted negotiations over the terms of a new deal over gas rights in Sarawak.

On Feb 17, Anwar told Parliament that Sarawak agreed that the Petroleum Development Act 1974 (PDA) will remain the overarching framework for governance in Malaysia’s oil and gas industry.

The prime minister said all Petronas’s existing agreements will remain intact and governed entirely by the PDA, and that Petronas and its subsidiaries will not be obliged to comply with any additional requirements imposed under state law.

Anwar’s announcement in the Dewan Rakyat was affirmed by Sarawak premier Abang Johari Openg with the qualification that existing Petronas contracts can continue provided they do not adversely affect Petros’s role as Sarawak’s sole gas aggregator nor contradict the provisions of the state’s Distribution of Gas Ordinance 2016. - FMT