After jointly investing in the exploration of the CA2 deepwater oil block in the waters off Brunei, Malaysia and Brunei recently agreed to step up the bilateral cooperation in the oil and natural gas sector. Petronas (Malaysian state-owned oil and gas company) and Brunei National Petroleum Company (Petroleum Brunei) signed the memorandum of understanding (MoU).
The MoU on the work on the joint demarcation and survey of the land boundary will also be finalized under the framework of the production sharing contract. This is another positive move taken by countries in the South China Sea to explore oil resources after the cooperation of Vietnam and the Philippines with US and British oil companies in exploring oil resources and offshore drilling. Considering that Malaysia and Brunei have the experience of cooperation in deepwater oil drilling, it is believed that the big-scale oil exploration endeavor this time will bring about a new model for the exploration and development of resources in the South China Sea.
Resources in South China Sea
The idea of the two countries to jointly develop the resources in the South China Sea is still pending the actual implementation for the time being. In order to facilitate the administrative work, we suggest Malaysia and Brunei to set up a joint venture company to reach a consensus of cooperation and joint investment in developing offshore resources in northern Sarawak and Brunei. The proposal to jointly develop resources in the South China Sea is a groundbreaking idea to expand the scope of the economic development in the two countries and a feasible way to further develop the bilateral ties of Malaysia and Brunei.
Malaysia and Brunei are inseparably related both in terms of geographical location and historical background. To work together with Brunei in developing resources is always an important goal in Malaysia's endeavor in expanding and developing its ties with foreign countries. As the dispute over the sovereign right in the South China Sea is becoming increasingly complex and superficial, the idea proposed by leaders of Malaysia and Brunei to jointly develop deepwater resources undoubtedly offers another possibility to resolve the dispute. The close relationship between Malaysia and Brunei has seen some changes in recent few years. One of the most important factors causing the changes is the escalation of the race for resources in this region and the sovereignty dispute over islands in the South China Sea. As sovereignty disputes between China and Vietnam, as well as the Philippines, become increasingly intense, the United States has also "officially" made a bid by stationing its aircraft carrier at Cam Ranh Bay. This move taken by the Pentagon also indicated the intention of the Obama administration to extend its influence to Southeast Asia. As the United States is "marking its territories" in the South China Sea, Southeast Asian countries are also compelled to seek their allies and partners for economic cooperation to ensure their continuous economic growth and political influence. Such a development has inevitably led to the changes in the bilateral ties between Malaysia and Brunei.
Meanwhile, in view of the rapid development of Indonesia's economic and trade sector, there are also scores of tourism cooperation projects in the west coast of Borneo for Malaysia and Indonesia to explore. The two countries have also engaged in cooperation in exploring or even drilling oil fields and this trend has been particularly obvious over the past few years. This has facilitated the Malaysia-Brunei cooperation in exploring oil resources. The Malaysian and Brunei governments have agreed to step up their cooperation in the sector of natural resources. Since it involves the complicated process of border demarcation, the task has been entrusted to the Joint Brunei-Malaysia Land Boundary Committee. Once the survey is done and the exploitation of offshore oil resources commences, there will be a new round of race for resources in the South China Sea.
Political and Economic Ties
Malaysia is undergoing economic transformation; while the world economy is showing a trend of slowing down and the second round of economic recession has already started. Thus, in the past one year, the Malaysian government has endeavored to promote the so-called "external exploration" policy.
Malaysia hopes to strengthen and boost its political and economic ties with other countries in this region by working together in exploring and distributing resources. At the same time, Malaysia also hopes to locate new investment destinations in a bid to ease the mounting pressure caused by the slow economic growth in the country. The agreement on the bridge construction signed by Malaysian and Brunei Governments will get the two countries ready for more cooperation in exploring resources in the future.
Joint Communique
Nevertheless, there is also a blind spot in the Malaysian government's policy toward Brunei. The border demarcation is a matter concerning territorial sovereignty of the two countries and it is expected that there will be lots of practical difficulties ahead. An earlier rumor about "exchanging oil blocks with sovereign right over Limbang" is actually an implication of border demarcation. Fortunately, Malaysia and Brunei immediately agreed on joint investment and development of the CA2 deepwater oil block off Brunei and debunked the rumor. Anyway, it is only until recently that a new opportunity arose to make this cooperation project possible through a Joint Communique, a result of the earnest efforts taken by both Malaysian and Brunei governments. This shows that there are more rigorous tests awaiting the policy of joint development of oil resources.
In the face of the many difficulties in the cooperation plan and the possibility of triggering a new round of conflicts over the islands in the South China Sea, leaders of Malaysia and Brunei have timely proposed the idea of cooperation package which includes cooperation in trade, investment, defense, finance, and transportation. Such an idea can make the plan to develop the resources in the South China Sea less sensitive. At the same time, the plan can also be an important bid to further develop the Malaysia-Brunei relations. This kind of broad vision and policy mind-set will lead us to the right path towards bright prospects of our national development.
The joint development of the CA2 oil block is a greatly profitable plan and expected to generate multi-billion dollar profits to both countries in the next 40 years. The profits should exceed this amount if we take other oil by-products into account. Setting up a joint venture company to explore and develop the abundant oil resources in the deep sea off northern Sarawak and Brunei using modern corporate approach will at least reduce the red tape in bureaucratic procedures.
The MoU on the work on the joint demarcation and survey of the land boundary will also be finalized under the framework of the production sharing contract. This is another positive move taken by countries in the South China Sea to explore oil resources after the cooperation of Vietnam and the Philippines with US and British oil companies in exploring oil resources and offshore drilling. Considering that Malaysia and Brunei have the experience of cooperation in deepwater oil drilling, it is believed that the big-scale oil exploration endeavor this time will bring about a new model for the exploration and development of resources in the South China Sea.
Resources in South China Sea
The idea of the two countries to jointly develop the resources in the South China Sea is still pending the actual implementation for the time being. In order to facilitate the administrative work, we suggest Malaysia and Brunei to set up a joint venture company to reach a consensus of cooperation and joint investment in developing offshore resources in northern Sarawak and Brunei. The proposal to jointly develop resources in the South China Sea is a groundbreaking idea to expand the scope of the economic development in the two countries and a feasible way to further develop the bilateral ties of Malaysia and Brunei.
Malaysia and Brunei are inseparably related both in terms of geographical location and historical background. To work together with Brunei in developing resources is always an important goal in Malaysia's endeavor in expanding and developing its ties with foreign countries. As the dispute over the sovereign right in the South China Sea is becoming increasingly complex and superficial, the idea proposed by leaders of Malaysia and Brunei to jointly develop deepwater resources undoubtedly offers another possibility to resolve the dispute. The close relationship between Malaysia and Brunei has seen some changes in recent few years. One of the most important factors causing the changes is the escalation of the race for resources in this region and the sovereignty dispute over islands in the South China Sea. As sovereignty disputes between China and Vietnam, as well as the Philippines, become increasingly intense, the United States has also "officially" made a bid by stationing its aircraft carrier at Cam Ranh Bay. This move taken by the Pentagon also indicated the intention of the Obama administration to extend its influence to Southeast Asia. As the United States is "marking its territories" in the South China Sea, Southeast Asian countries are also compelled to seek their allies and partners for economic cooperation to ensure their continuous economic growth and political influence. Such a development has inevitably led to the changes in the bilateral ties between Malaysia and Brunei.
Meanwhile, in view of the rapid development of Indonesia's economic and trade sector, there are also scores of tourism cooperation projects in the west coast of Borneo for Malaysia and Indonesia to explore. The two countries have also engaged in cooperation in exploring or even drilling oil fields and this trend has been particularly obvious over the past few years. This has facilitated the Malaysia-Brunei cooperation in exploring oil resources. The Malaysian and Brunei governments have agreed to step up their cooperation in the sector of natural resources. Since it involves the complicated process of border demarcation, the task has been entrusted to the Joint Brunei-Malaysia Land Boundary Committee. Once the survey is done and the exploitation of offshore oil resources commences, there will be a new round of race for resources in the South China Sea.
Political and Economic Ties
Malaysia is undergoing economic transformation; while the world economy is showing a trend of slowing down and the second round of economic recession has already started. Thus, in the past one year, the Malaysian government has endeavored to promote the so-called "external exploration" policy.
Malaysia hopes to strengthen and boost its political and economic ties with other countries in this region by working together in exploring and distributing resources. At the same time, Malaysia also hopes to locate new investment destinations in a bid to ease the mounting pressure caused by the slow economic growth in the country. The agreement on the bridge construction signed by Malaysian and Brunei Governments will get the two countries ready for more cooperation in exploring resources in the future.
Joint Communique
Nevertheless, there is also a blind spot in the Malaysian government's policy toward Brunei. The border demarcation is a matter concerning territorial sovereignty of the two countries and it is expected that there will be lots of practical difficulties ahead. An earlier rumor about "exchanging oil blocks with sovereign right over Limbang" is actually an implication of border demarcation. Fortunately, Malaysia and Brunei immediately agreed on joint investment and development of the CA2 deepwater oil block off Brunei and debunked the rumor. Anyway, it is only until recently that a new opportunity arose to make this cooperation project possible through a Joint Communique, a result of the earnest efforts taken by both Malaysian and Brunei governments. This shows that there are more rigorous tests awaiting the policy of joint development of oil resources.
In the face of the many difficulties in the cooperation plan and the possibility of triggering a new round of conflicts over the islands in the South China Sea, leaders of Malaysia and Brunei have timely proposed the idea of cooperation package which includes cooperation in trade, investment, defense, finance, and transportation. Such an idea can make the plan to develop the resources in the South China Sea less sensitive. At the same time, the plan can also be an important bid to further develop the Malaysia-Brunei relations. This kind of broad vision and policy mind-set will lead us to the right path towards bright prospects of our national development.
The joint development of the CA2 oil block is a greatly profitable plan and expected to generate multi-billion dollar profits to both countries in the next 40 years. The profits should exceed this amount if we take other oil by-products into account. Setting up a joint venture company to explore and develop the abundant oil resources in the deep sea off northern Sarawak and Brunei using modern corporate approach will at least reduce the red tape in bureaucratic procedures.
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