11 July 2024

The Thai government is grappling with a dilemma on how to deal with an unresolved  maritime border issue with Cambodia amid political pressure at home, while also pursuing joint development of the abundant crude oil and gas reserves in an area of the Gulf of Thailand over which the two have overlapping claims.

The two issues will be high on the agenda when Cambodia’s Prime Minister Hun Manet makes his first official visit to Thailand on February 7 since taking over from his father, Hun Sen, as the country’s premier.

Prime Minister Srettha Thavisin told a Parliament session during a budget bill debate early this month that his government would push forward with negotiations to jointly develop oil resources in the Gulf of Thailand for the mutual benefit of the people of the two countries.

“We are sitting on trillion-baht worth of resources. We should be able to negotiate and reach a settlement in our mutual interest and for the well being of the people,” he said.

However, conservative lawmakers led by Senator Kamnoon Sitthisaman are opposing the move, asking the government not to pursue negotiations for joint development of energy resources until both sides have settled the dispute over overlapping claims in the sea.

The Senate would raise the issue and grill the Pheu Thai-led government during the general debate due in February, he said.

Kamnoon was a key member of the ultra-nationalist People’s Alliance for Democracy (PAD) which opposed the inscription of the Hindu temple of Preah Vihear as a UNESCO World Heritage Site in 2008, leading to a rapid downward spiral in bilateral relations.

“I would have no problem if the government negotiated to jointly develop and share interests in petroleum resources in the Gulf of Thailand with Cambodia, but that should happen only after the settlement of territorial disputes,” Senator Kamnoon posted on his Facebook recently.

Different continental shelf claims have created an overlapping area of 26,000 square kilometers in the Gulf of Thailand, which potentially contains up to 11 trillion cubic feet of natural gas as well as 500 million barrels of condensate and oil.

The area was delineated in the west when Cambodia claimed its territorial sea in 1972 and in the east as Thailand counterclaimed in 1973. The senator believed that Thailand would get more maritime territory if the government managed to convince Cambodia to revise its claim. Consequently, there would be a smaller overlapping area for the joint development of petroleum resources to share the profit.

Development and delimitation

The two countries have failed to settle the territorial sea dispute since the first round of negotiations in 1970. The success of Thailand and Malaysia in joint development in 1979 inspired the Thai and Cambodian governments to try similar solutions of turning conflict into cooperation to extract natural resources under the sea for the sake of economic development.

The two countries came up with a memorandum of understanding (MOU) regarding the Areas of their Overlapping Maritime Claims to the Continental Shelf signed on June 18, 2001 by then Thai foreign minister Surakiart Sathirathai and Cambodia’s senior minister, Sok An, in Phnom Penh.

The 2001 MOU determined that the two countries accelerate negotiations for a joint development regime in the areas below latitude 11 degrees North and delimitation of the territorial sea in the area above latitude 11 degrees North as well as the establishment of a Joint Technical Committee to facilitate the two objectives.

The MOU cited clearly that the negotiations for joint development areas and delimitation of the territorial sea must be conducted simultaneously as an indivisible package.

There has been mixed opinion about the MOU among politicians in Bangkok. Contrary to Senator Kamnoon, Energy Minister Pirapan Salirathavibhaga from the United Thai Nation Party had said earlier that it would be difficult to simultaneously settle the territorial disputes and work on the joint development regime. He suggested refocusing and giving priority to the joint development scheme over the delimitation of boundaries for the sake of energy security.

Meanwhile, Foreign Minister Parnpree Bahiddha-nukara from the ruling Pheu Thai Party said that everything would be clear only after the two premiers reach a common ground when they meet on February 7. The relevant agencies would take no action until they get a clear direction, said Parnpree, who is also a deputy prime minister.

Good timing now

Pichai Naripthapan, an advisor to PM Srettha, said recently that the current timing was good for Thailand and Cambodia to resume negotiations on the overlapping claims to seek solutions for the joint development of petroleum resources as both countries badly needed cheaper energy sources.

Natural gas from joint development areas would benefit the power generation and petrochemical industries in Thailand, he said, and noted that the trillion-baht worth of resources in the area would be able to generate a trillion baht annually for the Thai economy.

“It’s not a good time to talk about the demarcation of the territorial sea, it’s a never-ending story all over the world,” Pichai, a former energy minister in the previous Pheu Thai Party government, cautioned. “This government should focus on a joint development scheme,” he stressed.

Depleting gas stocks

Officials and experts in the energy sector urged the government to give a clear direction and approach to resume talks with Cambodia for the joint development regime as Thailand is running out of natural gas reserves, which is the basic fuel for electricity generation.

Domestic production of natural gas from the Gulf of Thailand would be enough for only five years at the current rate of consumption, according to Kurujit Nakhornthap, executive director of the Petroleum Institute of Thailand. “If we cannot find new sources in the Gulf of Thailand, we have to import more expensive liquified petroleum gas,” he said.

Last year, Thailand consumed 4,400 million cubic feet a day, 50 per cent of the supply came from domestic production, 20 per cent was imported from Myanmar, and the rest from the global market, according to the Energy Ministry.

A single legal instrument

In 2009, the Abhisit Vejjajiva government decided to scrap the 2001 MOU. However, as the Thai government did not officially inform Cambodia of its decision, the revocation of the MOU did not take effect.

Former foreign minister Noppadon Pattama argued during an interview with local media that Thailand needed the MOU as a legal instrument for negotiations on both issues. Termination of the MOU and renegotiation would be equivalent to going back to square one, or 1970.

“We have wasted a lot of time and resources,” said Noppadon, who is now the House of Representatives’ chairman of the Foreign Affairs Committee. “It has already been 23 years since the signing of the 2001 MOU and we still can go nowhere.”

It might be difficult to negotiate both issues at the same time in one package, but it’s still possible if the two countries rationally talk under international laws, he said.

Noppadon was forced by the conservative elite and the yellow-shirt PAD to step down as foreign minister in 2008 for supporting Cambodia’s Preah Vihear inscription.

By Thai PBS World’s Regional Desk