The Malaysian state-owned company operates in areas that are under the country’s sovereignty. In a note sent to the Malaysian embassy, China expresses its disapproval, even though Prime Minister Anwar Ibrahim had recently mentioned the possibility of resorting to negotiations to resolve the issue of Chinese claims.
Kuala Lumpur () – China has asked Malaysia to suspend all oil drilling activities off the coast of Sarawak state, where Petronas operates. The request was made in a protest note sent to the Malaysian embassy in China last week, the daily reported. Philippine Daily Inquirerwhich published the document. “The Chinese side once again urges the Malaysian side to effectively respect China’s territorial sovereignty and maritime interests and immediately suspend exploration activity,” the document says.
China accuses Malaysia of encroaching on the areas in the South China Sea delimited by the so-called Nine-Dash Line, over which Beijing claims sovereignty, even though this is an area located just 100 kilometres from Sarawak and almost 2,000 kilometres from mainland China. And despite the fact that in 2016 the Permanent Court of Arbitration in The Hague declared the Chinese claims null and void.
The document also expresses some displeasure over oil and gas exploration activities near Luconia Reef, an area Malaysians call “Gugusan Beting Raja Jarum” and China refers to as “Nankang Ansha” and “Beikang Ansha.” The area is located approximately 150 kilometres north of Malaysian Borneo, within Malaysia’s 200-nautical-mile exclusive economic zone.
In recent years, China has stepped up military activity in the South China Sea in an effort to assert its territorial claims, bringing it into conflict with Taiwan and Southeast Asian countries.
Malaysian Prime Minister Anwar Ibrahim, for his part, has tried to calm tensions, using a diplomatic and conciliatory tone so far. Only three months ago, the prime minister had claimed that China was a “true friend.” “People say: Malaysia is a growing economy. Don’t let China abuse its privileges and take away resources from the country. I said no. On the contrary, we want to benefit from each other, we want to learn from each other and we want to gain benefits from this engagement,” Anwar Ibrahim had said on June 20, during the visit of Chinese Premier Li Qiang.
Last year, Anwar sparked an angry backlash when he suggested the government was willing to negotiate over China’s territorial claims in the South China Sea. “I have made it clear that Malaysia regards the area as Malaysian territory; therefore, Petronas will continue its exploration activities,” the prime minister had said when briefing parliament. “But if China believes it has rights, Malaysia is open to negotiations.”
These remarks drew immediate condemnation from the Malaysian opposition, represented by the Perikatan Nasional coalition. Former Prime Minister Muhyiddin Yassin had commented that Malaysia’s territorial rights are not negotiable, “even if they are claimed by China.” The government later clarified that the prime minister’s comment reflected his desire to see all issues related to the South China Sea resolved peacefully.
Malaysia has had sovereignty over the Luconia atolls and reefs since 1963, and in 1974 the government formed the energy company Petronas and granted it exploration rights.
As noted by the U.S. Energy Information Administration, the South China Sea is home to about 3.6 billion barrels of oil and more than 40 trillion cubic feet of natural gas, both proven and probable. According to data from Oslo-based Rystad Energy, most of these resources are located in Chinese waters (1.4 billion barrels of oil and 5.7 trillion cubic feet of natural gas) and Malaysian waters (1.3 billion barrels of oil and 29 trillion cubic feet of natural gas).
According to data from the Malaysian Investment Development Authority, the oil and gas industry contributes around 20% of Malaysia’s GDP. As stated by Singapore’s Yusof Ishak Institute, the sector “has been leveraged very effectively for long-term economic development” thanks to the promotion of local companies.
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