Watching the World: Trouble in paradise

March 14, 2005
The good news is that Indonesia and Malaysia have agreed to start talking in order to settle a dispute over oil rights in the Sulawesi Sea.

The good news is that Indonesia and Malaysia have agreed to start talking in order to settle a dispute over oil rights in the Sulawesi Sea.

The bad news is that both countries dispatched warships and planes near the offshore oil field, even as their leaders agreed to 3 days of high-level talks.

Trouble brewing

Trouble has been brewing in the area for years, but it boiled over last month when Malaysia awarded oil exploration rights in the Ambalat block.

It lies east of Borneo near the land border between Indonesia's East Kalimantan province and Malaysia's Sabah state.

Malaysia claims that the ND 6 and ND 7 blocks, awarded to Royal Dutch/Shell Group and Petronas, are within the limits of its continental shelf as published in the Territorial Waters and the Continental Shelf Boundaries of Malaysia Map 1979.

But Indonesia, which signed joint operation contracts with Eni Ambalat in 1999 and with Unocal Indonesia in 2004 to explore for oil and gas on the Ambalat block, has contested that map since 1980.

As the two countries argued, however, they were opening the way for more serious problems for the oil industry—not only in the Sulawesi Sea, but also farther west in the Straits of Malacca.

The Bangkok Post drew attention to the real problem there, saying in a Mar. 8 editorial that, "the continuing state of insecurity in the Straits of Malacca should concern everyone in the region, but not as much as the lack of cooperation about how to defend it."

The paper noted that, "countries now are going their own way on the matter, making the essential shipping lanes between Indonesia and Malaysia even more unsettled, vulnerable, and dangerous."

Terrorist worries

As the paper noted, the big fear is a terrorist attack, with almost any such assault in the Straits of Malacca creating huge knock-on consequences. It said that sinking just one or two ships there could block much of East Asia's commerce.

Japan, for example, is hugely dependent on oil and raw materials that sail through the 600 km straits in 50,000 commercial ships each year, two thirds of them carrying crude. South Korea and China are other vital destinations that could be cut off.

Merely blowing up one of the thousands of large oil tankers that sail the straits would pollute waters and shorelines beyond use. There are places where the straits are just 2.2 km wide.

The Straits of Malacca include three littoral countries: Singapore, Malaysia, and Indonesia.

In order to protect the straits for world shipping, and especially deliveries of oil to the Far East, the three littoral nations need to cooperate with each other and other interested nations.

Malaysia and Indonesia need to stop squabbling over their maritime border in Borneo and learn to cooperate in patrolling the more vital Straits of Malacca—for their own good and that of everybody else.