June 4 (Bloomberg) -- Malaysian Prime Minister Najib Razak called for claimants in the South China Sea to jointly develop resources to avoid conflict and prevent “extra-regional states” from becoming involved.
Najib cited a joint development zone in waters claimed by Thailand and Malaysia as a precedent that could be applied in the South China Sea. Vietnam and the Philippines reject China’s map as a basis for joint development in the waters, part of which are also claimed by Malaysia, Brunei and Taiwan.
“Agreeing to share prosperity, rather than let it divide us, is infinitely preferable to the alternative,” Najib said in a speech yesterday in Kuala Lumpur.
Competition for oil, gas and fish threatens to disrupt the estimated two-thirds of global trade that passes through the waters. China favors joint development of resources, while the U.S., Japan and the Philippines advocate international arbitration.
Najib said a code of conduct for operating in the waters would be a “good start” to prevent tensions from escalating. He warned that involving unspecified “extra-regional states” may “add yet another layer of complexity to the dispute.”
“For Asian nations, this problem is ours to solve,” Najib said. “Should we stray from the path of dialogue and cooperation, we may pave the way for other parties to take remedial action to protect the freedom of navigation and safe passage.”
At a meeting of defense officials in Singapore last weekend, Qi Jianguo, deputy chief of the General Staff of the People’s Liberation Army, said Chinese patrols in disputed waters off its coasts were “totally legitimate.” He spoke after Defense Secretary Chuck Hagel said at the same meeting the U.S. “stands firmly against any coercive attempts to alter the status quo” in the seas.
China’s so-called nine-dash map of the region, first published in the 1940s, extends hundreds of miles south to equatorial waters off the Malaysian coast of Borneo. Chinese Navy ships in March visited James Shoal off Malaysia, near where Royal Dutch Shell Plc and Petroliam Nasional Bhd. have oil and gas operations.
China National Offshore Oil Corp. estimates the South China Sea may hold about five times more undiscovered natural gas than the country’s current proved reserves, according to the U.S. Energy Information Administration.
“It will be difficult for large reservoirs of much-needed gas and oil to be found and extracted given the current tensions within the seas in Asia,” Singapore Defense Minister Ng Eng Hen said at the Shangri-La Dialogue on June 2.
Since 2010, China has cut the cables of survey ships working for Vietnam, chased away an exploration vessel near the Philippines and sent its first deep-water drilling rig to the region. Last year, China National Offshore Oil Corp. invited bids for exploration blocks that Vietnam had already awarded to companies including Exxon Mobil Corp. and OAO Gazprom.
Malaysia and Thailand in 1979 agreed to jointly develop oil and gas in a region of disputed waters about the size of New Jersey. Natural gas from the area now makes up about 20 percent of Thailand’s domestic production, according to Energy Ministry statistics.
“Instead of passing on choppy waters to the next generation, we should endeavor to leave them a calmer sea,” Najib said. “We should seek the common ground needed for an amicable understanding among the claimants.”
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