Thai-Cambodian oil-gas rights in the Gulf of Thailand:
The background to the dispute
By Jon Fernquest |
Today's Bangkok Post business section features a background article on the ongoing Thai-Cambodian dispute over gas and oil fields in the Gulf of Thailand.
Follow-up reading on the Malaysia-Thailand Joint Development Area (JDA) benefit sharing scheme that is been proposed as a way to resolve the dispute is available on the web (Read article).
The article also features useful vocabulary for describing negotiations and oil and gas field rights.
(Map on right shows the area of dispute. Map below shows Thai-Cambodian border. The province in red is Trat province which changed hands several times between Thailand and the French. Source of map. Read another recent analysis.)
Here is the article in full:
Thai-Cambodian oil talks stall
Border dispute blocks long-sought deal YUTHANA PRAIWAN & NAREERAT WIRIYAPONGFriday August 29, 2008
Negotiations involving overlapping claims to undersea oil and natural gas fields in the Gulf of Thailand are likely to drag on as both Thailand and Cambodia still need to seek agreement on the disputed border area, says Krairit Nilkuha, the director-general of the Department of Mineral Fuels.
The two countries had opened negotiations in 1995 in a bid to tap into potentially rich reserves.
The talks led to a memorandum of understanding signed in 2001 by the Thai and Cambodian prime ministers.
Under the pact, they agreed in principle to join in development and share profits from a total of eight blocks of petroleum fields in the overlapping claims area (OCA).
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The 2001 agreement still needs approval of the Thai House of Representatives to comply with provisions in the 2007 Constitution governing international agreements and treaties.
However, the main obstacle centres on two petroleum blocks, designated Block 5 and 6, where clarification of the disputed sea border is still sought.
Since the memorandum of understanding was signed in 2001, only five meetings have been held with no real progress made, even though both sides have clearly expressed their willingness to reach a conclusion as soon as possible.
Committees and working groups are working to seek an agreeable solution for the whole 26,000-square-kilometre OCA.
Leaders from both countries last failed to hammer out a formal arrangement in 2006 during a visit to Cambodia by former prime minister Thaksin Shinawatra.
However, Mr Krairit said he was optimistic that negotiations could be concluded soon, with a goal of seeing production from the areas begin within 10 years.
"All state agencies related to the OCA are accelerating efforts to seek the best solution that could help resolve the disputed sea border between the two countries, so we could resume talks," he said.
Disputed area first awarded exploration licenses 40 years ago
Thailand first awarded exploration licences to work in the areas in 1968 to Idemitsu, Chevron, British Gas and Mitsui Oil.
However, the dispute first arose in 1972 when Cambodia claimed its overlapping sea border. The Phnom Penh government also later awarded the licences over the exact same areas in 1997 to Conoco Phillips, Shell and Idemitsu.
As the dispute remains, those licence holders are unable to gain access to the areas in question.
Mr Krairit said he believed that resources in the area were plentiful, based on results from blocks nearby in the Pattani basin in Thai territory, where there are proved reserves of 5.4 trillion cubic feet of natural gas by US-based Chevron and Thailand's PTT Exploration and Production.
No data on petroleum reserves within the disputed areas have been revealed due to the extreme sensitivity of the border claims.
How will the dispute be resolved?
Mr Krairit said the talks should rely on the International Territory Law following the model of a Thai-Vietnamese sea territory clarification in 1997, or the Malaysia-Thailand Joint Development Area (JDA) in 1990.
Viraphand Vacharathit, the Thai ambassador to Cambodia, agreed that the prospects for the talks seemed brighter, adding that the two governments had agreed in principle that the benefit-sharing model of the Thailand-Malaysia JDA was the best solution.
"What has yet to be concluded is sharing ratio for the split of the resources," said the ambassador.
Authorities on both sides have discussed OCA issues occasionally. Talks have been positive so far because both parties want to reap benefits from the untapped gas deposits.
"It is believed that the OCA has more natural gas reserves than oil. However, the amount of reserves has yet to be confirmed," Mr Viraphand said.
(Source: Bangkok Post, business, 29-08-08, YUTHANA PRAIWAN & NAREERAT WIRIYAPONG, temp-link)
Vocabulary:
Negotiation Vocabulary
stall - no progress being made towards solution, nothing happening, not going anywhere
oil talks stall - discussion on oil dispute are not solving the problem
drag on - continue for a very long time
negotiations drag on - negotiations continuing for a very long time
opened negotiations - started negotiations
a memorandum of understanding - a informal agreement that provides a framework for cooperation on activities, establishes policies or procedures of mutual concern, and/or establishes expectations between two or more parties (See Wikipedia)
seek clarification of Y - a way of saying that they are relying on a court to define or clarify the rights
clarification of the disputed sea border is still sought
hammer out, hammer away - work hard at something, with great energy
hammer out a formal arrangement - work hard to reach an agreement
Oil and Gas Industry Vocabulary
X overlaps Y - X shares some of the same area as Y
claims - land that a country believes is part of their country
overlapping claims - two countries both believe they own this land (and only country can own the land)
overlapping claims to undersea oil and natural gas fields
a bid to Y - an attempt to Y
tap into Y - use Y
reserves - a supply ready to use when you need it
oil reserves
gas reserves
potentially rich reserves - the supply could be very great
a bid to tap into potentially rich reserves
a licence - permission to do something
awarded exploration licences - given permission to explore (for oil and gas)
licence holders - the companies given permission
petroleum reserves - supplies of oil, not yet taken from the earth
untapped - not used yet
gas deposits - gas under the earth
untapped gas deposits - gas not yet taken from the earth
International Territory Law - the international laws that define which country owns which territory and sea areas
Malaysia-Thailand Joint Development Area (JDA) - an wedge-shaped between Malaysia and Thailand that the two countries have agreed to share "all expenditure and benefits to be derived from petroleum" in the area (See website)
General Vocabulary
reap benefits - gain from
confirmed - what you believe, shown to be true
yet to be confirmed - not confirmed, may be confirmed in the future
sensitivity - must be dealt with carefully, because people can get angry easily
resolve the dispute - help both sides reach an agreement that puts the dispute to an end
