Happy Merdeka Day: Another bit of Malaysia may be lost to China, with consequences for the already angry Government of Abu Dhabi

by Ganesh Sahathevan 

In the glory days of the  now ended brotherly relationship between the Malaysian Government and Abu Dhabi , Abu Dhabi's Mudabala was awarded the exploration Block SK 320,where it has since discovered a commercial quantity of gas.

Mudabala is soon to be merged with Abu Dhabi's other investment arm, IPIC, and that discovery will form part of the merged assets. Of course, IPIC is also suing the Malaysian Government for some USD 7.5 billion in loses incurred from bailing out Malaysia's 1MDB.

Meanwhile, in what appears to be another part of a series of financial deals with China, entered into in order to cover 1 MDB's losses and cure the financial volatility that has come with it,Malaysia's PM Najib seems to  have surrendered control over yet another bit of Malaysia, James Shoal, which lies just south of the IPIC/Mudabala SK 320 amd Deepwater Block SK2B.




As the Wall Street Journal noted in 2014 when the SK 320 discovery was made:

There have been no public complaints from Beijing over the Monday announcement of the discovery around 144 kilometers, or 90 miles, off the coast of Malaysia's state of Sarawak—or over extensive Malaysian-sponsored oil-and-gas exploration and production there going back years, even though the area lies inside waters where China previously has asserted claims.The lack of confrontation is in contrast with the jousting 1,000 kilometers to the north between China and Vietnam, where coast-guard and fishing vessels have faced off since early May over the deployment of a Chinese rig in an area both countries claim

While many would have assumed that  this is Malaysian diplomacy at its very best; low key ,behind the scenes, non-confrontational but effective, the reality, as this writer has shown in the matter of Luconia Shoals, has been an effective surrender of Malaysian territory ,with consequences for oil and gas concessions awarded by Malaysia.

No wonder then that Sabah's Jeffrey Kitingan warned in 2014 that Sarawak could lose a significant part of its Exclusive Economic Zone if not enough was done  by the Federal Government to defend James Shoal.His warning has been ignored, but all may not be lost..

IPIC ,which is already owed some USD 7.5 billion is not likely to take the loss of its discovery lightly, and PM Najib simply does not have the cash to compensate for that loss. Najib is stuck between a China demanding its pound of his flesh, and an IPIC furious that a brother has cheated it of money. The likely impasse gives Malaysians an opportunity to win back territory from China. 

END 

References

Loss of James Shoal could wipe out state’s EEZ

 February 5, 2014, Wednesday

‘X’ marks the location of the James Shoal, about 80 km off the coast of Sarawak. — Graphic courtesy of Jeffrey Kitingan

KUCHING: The ramifications of China’s claim and the recent incursion of its warships into the James Shoal, 80km off the coast of Sarawak, is too serious for Putrajaya to take lightly.

As the area is deep within the state’s territorial waters and its 200 nautical mile Exclusive Economic Zone (EEZ) the claim and the incursion is a direct threat to the sovereignty of the nation especially to Sarawak.

If a foreign power were to claim the James Shoal, the state’s territorial boundary could be shrunk to its shorelines and coastal waters, resulting in the loss of all its existing oil and gas resources.

This warning was sounded by State Reform Party (Star) Sabah chairman Datuk Dr Jeffrey Kitingan who urged the Federal Government to explain its inaction over the incursion into the nation and take appropriate action to protect its sovereignty.

“At stake are Sarawak’s security and sovereignty as well as the EEZ and exclusive rights and along with them, its fishing ground and tapping of marine resources, seabed mineral exploration including oil and gas exploration and other economic exploitation.

“It also has to be remembered that the boundaries of Sabah and Sarawak as declared by the Queen in Council in 1954 extends to the continental shelf which in most parts are beyond the EEZ,” he said in a statement yesterday.

Jeffery said the Defence Ministry must be prepared for all consequences for failing to treat seriously the Chinese navy’s incursion into the James Shoal.

If the Malaysian navy cannot even react when the Chinese naval ships were 80 km off Sarawak’s coastline, what would happen if a serious incursion were to take place, added the Bingkor assemblyman.

Jeffrey suggested the least the Malaysian government could have done was to position its submarines and other warships near James Shoal as a show of its naval power.

Chinese state news agency Xinhua recently reported that an amphibious landing craft and two destroyers patrolled the James Shoal and held a ceremony in which they swore to safeguard Chinese sovereignty.

However, Malaysia’s navy chief Tan Sri Abdul Aziz Jaafar denied the report, saying that the Chinese exercise took place hundreds of miles to the north in international waters.

Aziz was reported to have said the Chinese naval exercise involving its newly commissioned aircraft carrier and a
submarine, took place 1,000 nautical miles from Malaysia’s 200 nautical mile economic exclusion zone.

He added that Malaysia and the United States had been informed of the exercises beforehand.

Malaysia protested to China in March last year against the incursion by four Chinese warships in the James Shoal, which lies about 1,800 km south of the Chinese mainland.

In April, a Chinese maritime surveillance ship returned to James Shoal which Beijing calls Zengmu Reef to leave behind steel markers to assert its claim.

China is laying claim on vast areas of the South China Sea which are also claimed by other countries including Vietnam and The Philippines.