Talks urged for disputed oil zone

Talks urged for disputed oil zone

25/08/2011
Yuthana Praiwan
Bangkok Post

Energy planners are pushing the revival of talks with Cambodia on the oil-rich overlapping claims area (OCA) between the two countries to ensure energy security.

They also urge all parties not to turn it into a political issue so that the talks stand a chance of getting off the ground. In recent years, less-than-smooth relations between the two countries have prevented the issue from being raised.

"In principle, energy planners are eager to see progress, as we're all aware our gas reserves are going to be depleted over the next 15-18 years," said an Energy Ministry source. "Without prior preparation for new petroleum reserves, Thailand will likely be in trouble, given the growing rate of consumption."

A source insisted the plan has nothing to do with Thai politics.

The OCA is a 27,000-square-metre offshore area estimated to contain 11 trillion cubic feet of natural gas and unknown quantities of condensate and oil. The OCA is defined by the Cambodian claim of 1972 (western boundary line) and the Thai claim of 1973 (eastern boundary line), as well as the 1991 Cambodian-Vietnam maritime border (southern boundary).

Cambodia and Thailand signed a memorandum of understanding in June 2001 under the Thaksin Shinawatra administration. They agreed in principle that a joint development regime could be established over the southern two-thirds of the claims area, which spans 27,000 sq km, while the northern third could be developed once the maritime border was delineated.

Agreements on overlapping claims were almost reached when the 2006 coup toppled the Thaksin government.

Bangkok cancelled this agreement in 2009 in protest over Thaksin's appointment as an economic adviser to Cambodia.

Thailand has sought to settle the dispute over the overlapping claims area for 30 years, back to the days of the Gen Prem Tinsulanonda government.

It successfully concluded similar talks with Malaysia and Vietnam, which started in 1979 and 1994, respectively, but those with Cambodia, which began in 1995 to tap into potentially rich reserves, have made little headway.

The issue of revenue sharing is a stumbling block for both sides.

Both countries presented competing proposals in earlier talks. Cambodia proposes dividing the disputed area in a checkerboard fashion, creating at least 14 different blocks, with revenue and management shared equally.

But the main Thai counterproposal is that the disputed area be divided into three strips running north-south, with the revenue from the central area to be shared equally.

The share from the outer areas would be weighted in favour of the country adjacent to that area, about 80/20 to Thailand on the western side of the OCA and 80/20 to Cambodia on the eastern side.

In the absence of firm data on reserves in the OCA since exploration has yet to be allowed, energy experts have indicated it makes intuitive sense that most of the exploitable reserves are located towards the Thai side of the OCA.

This is because the Pattani basin, the oilfield containing most of the offshore oil and gas reserves in undisputed Thai waters, extends into the OCA.