Can Thailand, Cambodia unlock massive oil and gas reserves?
An estimated $300 billion in oil and gas reserves is sitting under overlapping territory in the Gulf of Thailand. Cooperation is complicated by political tensions
An estimated $300 billion in oil and gas reserves is sitting under overlapping territory in the Gulf of Thailand. Cooperation is complicated by political tensions over a separate land border dispute. Cambodia and Thailand are trying out an obscure United Nations tool to try and settle a decades-long maritime territorial dispute that could lead to unlocking hundreds of billions of dollars in oil and gas reserves. Earlier this month, Phnom Penh filed a notice for "compulsory consultation" under the UN Convention on the Law of the Sea (UNCLOS), which Cambodia and Thailand are both party to. In effect, that invited Thailand to join Cambodia in UN-backed conciliation talks over their 26,000 square kilometers of overlapping claims in the Gulf of Thailand. The filing comes after Thailand in May pulled out of a 2001 agreement with Cambodia that had committed the pair to settling the competing claims and jointly developing the oil and gas fields. Thailand's pull-out of the MoU comes amid tensions between the neighbors that have been running high since a land border dispute turned deadly last year. "The compulsory conciliation process may be useful in helping Cambodia and Thailand achieve an agreement on overlapping maritime claims," said Matthew Wheeler, a senior Southeast Asia analyst for the International Crisis Group. Under the process of the UN convention's conciliation clause, Cambodia and Thailand have each selected two independent experts as "conciliators" to the ad hoc "conciliation commission." The commission will investigate the facts and legal position of each state to deliver a set of non-binding recommendations, which are also sent in a report to the UN secretary general. Tapping reserves a mutual interest According to estimates cited by both the Thai and Cambodian governments, the overlapping claims area in the Gulf of Thailand may hold $300 billion worth of untapped oil and gas reserves by some rough estimates, including 11 trillion cubic feet of natural gas alone.
"Both countries would benefit substantially. Thailand's oil fields … have been in decline for a few years, leading to [liquefied natural gas] imports." said William Jones, an assistant professor at Thailand's Mahidol University. Cambodia, meanwhile, is entirely dependent on imports for its oil and gas. And without any refineries of its own, Jones said, it would likely have to send any oil and gas it extracts from the Gulf to Thailand for processing, at least until it develops its own capacity. "Regardless, given the high energy prices, dependency levels, and now the added uncertainty from the Middle East, the Gulf of Thailand would provide a good buffer for consumption and healthy profits for those involved," Jones told DW. But the hurdles to reaching a deal may be just as great, especially in the shadow of last year's border fighting. Multiple armed clashes over competing land border claims last left dozens of soldiers and civilians dead. While Cambodia and Thailand have not exchanged fire for months, both armies remain on edge and a mutual mistrust runs deep. And because the conciliation commission's recommendations will be non-binding, Cambodia and Thailand would have to take them on by choice. How does the UN-backed process work? The independent experts selected by Cambodia and Thailand have until late July to choose a chairman to round out the commission, which then has 12 months to issue a report with non-binding recommendations. Bangkok initially hesitated to engage. Having lost a number of cases over competing land claims to Cambodia at UN courts in the past, Thailand would rather not get international bodies involved in its border rows. "But once Cambodia officially began the process, then Thailand basically had two choices — just don't participate and look bad and have the [UN] secretary general choose your conciliators and all this for you, or just go into it … with eyes wide open,” Jones said.
The BriefWire