Friday, 22 June 2012

China warns Vietnam over disputed waters

On Thursday 21 June, in a new show of its resolve over the South China Sea dispute Beijing warned Vietnam for passing a law that claims sovereignty over the oil-rich Paracel and Spratly Islands, saying they are the ''indisputable'' territory of China.

China's Foreign Ministry in Beijing called on Vietnam's ambassador Nguyen Van Tho to oppose the new law. A ministry statement said: “'Vietnam's Maritime Law, declaring sovereignty and jurisdiction over the Paracel and Spratly Islands, is a serious violation of China's territorial sovereignty…China expresses its resolute and vehement opposition.''

Vietnam's National Assembly approved the law on Thursday, stipulating that all foreign naval ships passing through the waters are required to notify Vietnamese authorities. The dispute about the law, which has been in the making for years, is yet another one of China's attempts to tell Vietnam that the South China Sea is its rightful domain.

China's statement comes two weeks ahead a meeting of foreign ministers of the Association of Southeast Asian Nations in Phnom Penh, Cambodia, which will be attended by US Secretary of State Hillary Clinton. The South China Sea dispute is expected to be high on the agenda.

To fortify its claims, China has also raised the level of governance on three island groups in the sea: the Spratlys, the Paracels and Macclesfield Bank. The Chinese State Council issued a statement placing the three groups of islands and their surrounding waters under the city of Sansha as a prefectural-level administration rather than a lower county-level administration.

Sources: Upstream, Bloomberg, The New York Times

Monday, 30 April 2012

Philippines plans more oil and gas exploration in disputed area

According to Energy undersecretary Jose Layug, the Philippines are planning more oil and gas exploration in the disputed Scarborough Shoal region of the South China Sea. In an interview with ABS-CBN Layug said: "The Chinese are claiming [these areas] but we have said repeatedly that [they are] well within the territorial jurisdiction of the Philippines."

The news comes amid accusations that Beijing is employing "bullying" tactics. According to the Philippines on Saturday 8 April, China allegedly deployed a ship dangerously close to two Philippine vessels in the disputed South China Sea. In the alleged incident a Chinese vessel speeded past two Philippine coast guard ships at more than 37 km per hour, creating a high wave that buffeted the vessels.

No one was hurt but according to foreign department spokesman Raul Hernandez this move by “the Chinese vessel posed a danger to the Philippine vessels". He added: "Our ships did not react to the bullying.”

This latest incident is the most serious since the standoff began on 8 April, when the Philippines tried to arrest Chinese fishermen in the shoal for poaching and were blocked by Chinese ships. China has warned the Philippines against internationalising the conflict over the disputed area, about 230km from the Philippines' main island of Luzon. Experts fear that the on-going conflict may destabilise regional security.

China has territorial disputes with the Philippines, Vietnam, Brunei, Malaysia and Taiwan across the South China Sea, and these nations are worried about what some see as growing Chinese assertiveness in staking claims over the sea's islands, reefs and shoals.

Sources: Rigzone, AFP, Reuters

Thursday, 12 April 2012

China and the Philippines in South China Sea stand-off

Ships from China and the Philippines are engaged in a stand-off over a remote and disputed shoal in the South China Sea. Despite the tension, both sides are pledging a diplomatic solution.

A warship from the Philippines approached the Scarborough Shoal, off the country’s northwestern coast, on 7 April as part of a routine patrol. There it found eight Chinese fishing boats, and upon boarding them claimed to have found illegally-caught fish and coral.

Two Chinese surveillance boats then arrived and blocked the Philippine warship from arresting the fishermen. A third arrived on 11 April, whilst the Philippines sent a second vessel to back up its warship on 12 April.
The situation is reportedly tense, with the fishermen essentially blockaded onto the uninhabited shoal. The Chinese media has taken a bellicose stance, warning that it will “react accordingly” in the event of a military clash and accused Manila of taking a “radical approach”.

Chinese state media and government officials have also been insistent that the shoal belongs to China. Filipino Foreign Secretary Albert Del Roasrio, meanwhile, said that the shoal “is an integral part of Philippine territory”.

The dispute over ownership reflects a much wider dispute over maritime borders in the South China Sea. China claims vast tracts of the sea, including its many island chains, largely due to the extensive oil and gas resources which are believed to lie beneath them.
Despite the confrontation, both Manila and Beijing have stated their commitment to a diplomatic solution. Filipino officials have reportedly proposed a compromise solution, although details have not been made public and China has not formally responded.
The situation is likely to cool down but it underscores the rising tensions across the South China Sea, where relations China and US-backed states are increasingly fraught. Manila recently called for a coordinated stance by South-East Asian states on the South China Sea, before entering into discussions with China on maritime borders.

Sources: Guardian, BBC, Global Times, Reuters

Tuesday, 10 April 2012

Situation on Syrian borders deteriorates

The instability in Syria has begun to spill across the poorly demarcated southern border with Lebanon, as well as the more tightly controlled boundary with Turkey in the north. Intensification of fighting in border zones could have serious consequences.
The situation along the porous Lebanese border has been tense for some time, with reports of cross-border incursions by Syrian forces as they pursue rebels and arms smugglers into their safe havens in Lebanon. Syria has also been accused of mining the area, a serious risk given that the border is poorly demarcated.
On 9 April Syrian forces were accused of firing over the border, killing a Lebanese TV cameraman. Damascus insists that Ali Shaaban was shot dead by 'terrorist gangs' who also attacked Syrian soldiers. Although not the first death from cross-border fire, the killing of Shaaban is the most high-profile.
Lebanese opposition leader and former president Amin Gemayel said that Lebanon is now at serious risk of the conflict spilling over from Syria. Lebanese politics has become increasingly strained over the Syrian crisis.
To the north, Syrian forces are accused of shooting across the Turkish border into a camp for refugees who have fled the fighting. Allegedly pursuing rebels, Syrian gunfire wounded at least six people in the camp – including two Turks, one a policeman. The cross-border incident prompted a strong response from Ankara, with Prime Minister Recep Tayyip Erdogan insisting that Turkey would “take the necessary steps” against the cross-border violation.
With fighting continuing near both the Lebanese and Turkish borders, the odds of more cross-boundary violence will increase.
Sources: BBC, Reuters, AP

Wednesday, 28 March 2012

Sudan and South Sudan battle over disputed oilfields

Sudan and South Sudan are close to war along their disputed border, with multiple clashes around vital oil fields and an escalation in troop build-ups.
The tension has been rising for several months, particularly since South Sudan shut down oil production, protesting alleged theft of its crude exports from the pipeline through Sudan. Since then Khartoum, which is heavily dependent on oil export revenues, has sought to increase the pressure on its breakaway southern neighbour to restart production or lose the wells by force.

Most of the oil fields are located in border regions such as Unity state, where the boundary between Sudan and South Sudan was never fully demarcated after the south declared independence last July. Khartoum insists that some of the oil fields are in northern territory, whilst the south – which is almost wholly reliant on oil revenues for its budget – is adamant that it will not cede any territory.

The recent upsurge in fighting began on around 26 March. Details are sparse given the remoteness of the border and the poor communications, but Juba insists that Sudanese warplanes began bombing oil-producing areas in Unity state, before clashes broke out between the armies of both sides.

During the fighting, South Sudan alleges, northern forces temporarily captured oil facilities in the Heglig region, which is claimed by both sides. The facilities at Heglig and in the area struck by air attacks are operated by China’s CNODC. Khartoum claims that the violence came in response to attacks by South Sudanese forces. It insists that its troops are in control of the Heglig field.

The African Union and the UN have called on both sides to pull back their forces from the border and return to the negotiating table to discuss key issues including oil revenues and border demarcation. Neither side has shown much willingness to start a fully-fledged war, but the clashes have stalled their diplomatic discussions. A summit on 3 April, in which Sudanese President Omar al-Bashir was due to travel to Juba, has been cancelled.

Sources: BBC, Voice of America, Reuters

Monday, 26 March 2012

Ethiopia and Eritrea trade accusations over border clash

Ethiopia and Eritrea are continuing to blame each other for a recent border clash which raised concerns of a resumption of conflict in the Horn of Africa.
The violence occurred on 15 March, when Ethiopian troops crossed the disputed boundary and attacked three Eritrean military bases around 18km inside Eritrean territory. The Ethiopian military said that the attack occurred because of Eritrea's support for “subversive groups”. Government spokesman Shimeles Kemal claimed that the incursion did not represent a direct military confrontation.
Eritrea responded by claiming that the attack was intended to distract attention from the countries' ongoing border dispute. The boundary has been undefined ever since their war between 1998 and 2000, which left 70,000 dead without resolving the border. The village of Badme, which was the cause of the war, remains under Ethiopian control despite being awarded to Eritrea by an international tribunal.
The two states remain at loggerheads over the border as well as the situation in Somalia, where they support different sides in the country's civil war. However Eritrea has said that it will not retaliate for the latest incursion, saying that it did not want another war (analysts believe that Eritrea lacks the military capabilities to stand up to Ethiopia).
Asmara has also accused the US of being behind the incursion, a common charge in the region. The US denied the charge.
The latest raid is not an isolated incident. The last few months have seen repeated clashes and border skirmishes, in which several have been killed and some Ethiopians allegedly abducted by Eritrean forces.
Sources: BBC, Guardian

Friday, 23 March 2012

Romania and Bulgaria in Black Sea territorial dispute

Amid a surge of interest in Black Sea oil and gas resources, Romania has highlighted a border dispute on its Black Sea boundary with Bulgaria.
Romania's Foreign Minister Cristian Diaconescu said on 21 Marchthat “a disputed territory exists between Bulgaria and Romania that is of seventeen kilometers in the Black sea waters”. The two neighbours have been seeking to delimit their maritime borders for two decades: Diaconescu said that the lack of a formal agreement has not prevented the development of friendly relations between them, so the disputed area should be settled as soon as possible to prevent it becoming a problem.
The dispute has resurfaced due to the recent discovery of significant gas resources by ExxonMobil and Petrom (in which OMV holds a 51% stake) off the Romanian coast. In February the two partners announced that an exploration well at the Neptun block had struck an extremely attractive prospect, which contains up to 100 billion cubic metres of natural gas, and which may be surrounded by other attractive areas.
Bucharest has sought to reassure its neighbour, as well as the EU and international companies, that the dispute is not a major issue and is not yet at the stage of arbitration. Diaconescu said that the two sides would hold high-level talks and try to settle the matter amicably, although reports have also said that Romania will consider taking the dispute to the International Court of Justice if necessary.
Romania is keen to settle the issue in order to remove any uncertainty over its ownership of the exploration block in question. Substantial gas supplies would be a major boost for its economy and its political position within the EU.
Sources: Oil and Gas Eurasia, BusinessWeek, Novinite

Tuesday, 13 March 2012

Turkey to begin drilling off northern Cyprus

Turkey's TPAO has said that it will begin drilling off the coast of Turkish Cyprus “within days”, raising the stakes in the eastern Mediterranean energy game.

The chairman and president of the Turkish state energy company Mehmet Uysaltold Reuters that TPAO had started moving equipment there and would start shortly. Echoing the Turkish government's line, he also said that he would “take all measures” to protect the drilling if it took place in an area disputed by the Republic of Cyprus.
The company has not formally announced the location of its first drilling operations. The areas under contract between TPAO and the Turkish Cypriots cover a major area around the island, including areas to the south of the island which are within commonly accepted Greek Cypriot borders. For its first round of exploratory work, TPAO is unlikely to deploy anywhere too risky or controversial, and is likely to work off the northern coast.
However the company is undoubtedly serious when it says that “all measures” will be taken to defend its operations. The Turkish government has repeatedly expressed its willingness to deploy naval assets in its dispute with the Republic of Cyprus. When seismic vessels began exploring the area last year, in response to Cyprus's decision to allow Noble Energy to prospect for gas and oil, Turkish warships were reportedly shadowing the research ships.
The tensions between Israel and Cyprus on the one hand and Turkish Cyprus and Turkey on the other, have increased lately. Recently it was announced that Israel may be planning a military base in Cyprus; a Turkish minister also provoked controversy by suggesting that Turkey should annex northern Cyprus.
If TPAO strikes it lucky off the Cypriot coast these tensions are likely to increase further. Although it is likely that the company will restrict its activities to waters off Cyprus's north coast, there is no guarantee that the situation will not change in future.
Sources: Rigzone, Reuters, TPAO

Wednesday, 7 March 2012

Bangladesh hoping to offer disputed offshore blocks

The government of Bangladesh is hoping to offer a number of gas and oil blocks in April after a UN tribunal rules on its maritime border dispute with Myanmar later this month.

The head of the national energy company Petrobangla's PSC department, Muhammah Imaduddin, said on 7 March that “We are planning to offer at least two to three deepwater gas blocks in the planned April bidding round if Bangladesh gets legitimate right over the deepwater blocks”.

The tribunal is set to issue its ruling on 14 March; the relevant lawsuit was filed by Dhaka in late 2010 after a naval flotilla from Myanmar entered Bangladesh's waters to explore for resources.

Under the UN Convention on the Law of the Sea, Bangladesh is claiming an area ranging from 390 to 460 nautical miles southward from its coastline. Dhaka remains in talks with India over a separate maritime boundary issue. The disputes with its neighbours have hindered exploration of oil and gas reserves, which are desperately needed to tackle the country's energy shortages. In 2009 Tullow halted work in its two offshore blocks due to the maritime border dispute.

The government has expressed its determination to defend itself. Foreign Minister Dipu Moni said that “we will not stop from taking the legal route to achieve legitimate demands from our neighbours”.

The deepwater offshore gas blocks, located in the Bay of Bengal, may be highly productive. Bangladesh is banking on the tribunal ruling in its favour, and so avoiding a further – and increasingly political – stand-off with Myanmar.

Sources: Platts, Financial Express Bangladesh

Monday, 5 March 2012

Sudan border tensions reach boiling point

The confrontation between Sudan and South Sudan along their disputed border seems to be reaching a boiling point, with dozens killed in fighting and accusations that Sudanese jets have bombed targets within South Sudanese territory.

Tension has risen steadily over the past month, as rebels with links to the South Sudanese government have attacked towns on the Sudanese side of the border and Khartoum has responded by launching raids along the disputed boundary region.

At the end of February Sudanese rebels claimed to have killed 150 government troops in a border battle, prompting the Sudanese government to threaten retaliation against Juba for its alleged involvement. Although South Sudan denies supporting the Sudan People's Liberation Movement North, it is widely seen as a convenient proxy for Juba.

On 2 March, the South Sudanese government accused its northern neighbour of massing troops along the border and also said that some Sudanese military units had penetrated as far as 10 miles into South Sudan's oil-producing Unity state. Airstrikes against oil facilities were also reported.

The rise in violence suggests that attempts to demarcate the border, which were agreed last month, will come to nothing. Even the proposed demarcation process would exclude five disputed areas, underlining the distance between the two sides on the issue.

Control of oil-producing areas is one of the most contentious issues – almost all production is located in what is now South Sudan, although the export infrastructure is located in the north. Disputes over revenue-sharing have led Juba to shut down production, crippling its own oil-dependent economy but also seriously damaging northern Sudan.

The recent rise in border tension suggests that Khartoum is testing to see whether it could seize oilfields by force without provoking an international crisis.

Sources: Sudan Tribune, AFP

Friday, 24 February 2012

China calls on Burma to ensure border security

The Chinese government, in a rare if subtle criticism of a regional ally, has called on the Burmese government to tighten controls at their joint border after a rise in the number of refugees fleeing into China.

A senior Foreign Ministry official, Jia Qinglin, told the visiting Speaker of Myanmar's lower house that Beijing “sincerely hopes Myanmar will find a peaceful way to appropriately resolve problems with ethnic reconciliation and will protect the long-term peace and stability of the China-Myanmar border region”.

The coded put-down is rare for China, which regularly insists on its policy of non-interference into the affairs of other states. It follows attacks on Chinese shipping along the upper Mekong near the Burmese border last December, as well as a sharp increase in the number of ethnic Kachin refugees fleeing Burma amid fighting between ethnic rebels and the army.

Up to 10,000 refugees, mostly Kachin, have flooded across the porous border in recent months, according to local aid groups. They are now encamped in makeshift tent cities on the Chinese side of the border. Beijing denies the existence of the refugees, who are seen as an embarrassing testimony to the inability of China's ally to pacify its border regions.

Fighting between the Kachin Independence Army and the Burmese military flared up last June after a 17-year ceasefire broke down. The poorly policed border regions are easy territory for the rebels, who are fighting for greater autonomy from the Burmese government.

China's criticism may herald greater collaboration between the two countries on border security, especially if Beijing continues to feel that Burma is unable to handle the situation itself.

Sources: Reuters, AFP

Tuesday, 14 February 2012

CGX resumes operations at disputed Guyana well

Toronto-based explorer CGX has restarted drilling at the Eagle 1 well off Guyana, after a seven-year delay caused by border disputes between Guyana and Suriname. The resumption comes as part of increased interest in the oil and gas prospects off the northern coast of South America.

CGX, which has a 100% stake in the Corentyne licence where the Eagle well is located, restarted operations on 9 February. CEO Steve Hermeston said in a statement that the resumption “marks a significant milestone in the history of CGX”.

Drilling was suspended in June 2000, when Surinamese naval forces ordered a CGX rig to leave the area, accusing it of drilling in Surinam's waters. The area in dispute, the Guyana-Suriname basin, is believed to hold major gas and oil deposits.

The two sides contest the exact territorial line through the basin and the Corentyne river which empties into I – both parties aimed to get the largest possible share of the basin. In 2004, smarting from the suspension of the CGX contract, took the case to a tribunal operating under the auspices of the UN Convention on the Law of the Sea.

The five-member tribunal issued a ruling in September 2007 which allowed both sides to have access to the basin and the river, but gave Guyana a larger share of the basin itself: 12,800m2 compared to Suriname's 6,900m2. Despite the disparity, both sides have welcomed the result, with Suriname's president saying he was “delighted” at the ruling.

The resumption of operations by CGX is a clear vote of confidence in the new situation and a sign that exploitation of the region's resources can proceed.

Sources: Upstream, BBC

Wednesday, 8 February 2012

Disputed waterway between Iran and Iraq reopens

Commercial traffic has resumed on the Shatt al-Arab waterway between Iraq and Iran for the first time in 30 years, reflecting decreased tensions over the disputed marine boundary between the countries.

The reopening of the waterway, which runs for 120 miles down from the Gulf, follows the opening of a new jetty by Shell designed to support operations at the Majnoon oilfield on the border with Iran. The new facility is situated about 50 miles up the Shatt al-Arab: ships travelling there must first pay customs duties at the port of Umm Qasr on the edge of the Gulf.

Although there are other small harbour facilities down the course of the Shatt al-Arab, the Shell facility is the first major facility to be established there since the Iran-Iraq war interrupted southern Iraq’s oil operations in 1980. The war began in part due to a dispute over the border line through the Shatt-al Arab, which provides vital access to the Gulf.

The opening of the port suggests that the boundary dispute over the waterway, although not settled, is not proving an impediment to commercial activity there. Most of the remaining sections of the border have been agreed, and in late 2010 the Iraqi government said that the demarcation of the Shatt al-Arab line would begin under the auspices of the UN.

It seems that the process of demarcation is still underway. Nonetheless it seems that Iran is willing to accept – at least for now – some common usage of the waterway. This illustrates the warming political ties between Baghdad and Tehran and their willingness to move onwards from the disputes of the past.

Sources: AFP, France 24

Tuesday, 31 January 2012

South Sudan insists on border deal for oil

South Sudan has demanded that a border agreement with Sudan should be signed before it restarts oil exports, amid a growing row over the situation along their boundary.

On 29th January, South Sudanese Oil Minister Stephen Dhieu Dau said that “oil production will restart when we have a comprehensive agreement and all the deals are signed”. The country has shut down all its oil production over the past few weeks after Sudan started taking oil in lieu of fees which it claims are owed by South Sudan.

The north controls the oil export pipelines but most of the actual production is concentrated in the south. After the south became independent last July, this became a major point of contention between the two Sudans. Oil accounts for 98% of South Sudan's budget, so the oil shutdown will have serious economic effects; however, the north is also heavily dependent on oil transit and export fees.

South Sudanese officials are now demanding that the sides settle a whole host of issues before oil exports restart. One of the most significant is the status of the broder and the disputed region of Abyei. “Sudan must recognize the 1956 border, which means they must give back all the areas under occupation,” according to Dau.

This would mean handing over control of Abyei, a nexus for local rebellions and cattle raids which have killed hundreds in recent months. Juba has accused Khartoum of supporting local gunmen who have rampaged through the border region; the north, in turn, accuses the south of backing insurgents who were affiliated with the ruling southern party but were left in Sudan after the secession agreement.

The UN has called on both sides to pull back from Abyei, insisting that the presence of police and security forces there was destabilising the border situation. However with the UN peacekeeping force there still under-strength and unable to control the region, neither side is willing to pull back until it has secured a favourable verdict on the border region and its oil wealth.

Sources: Telegraph, Reuters, Sudan Tribune

Friday, 27 January 2012

Norway to open up Barents for exploration after border demarcation

The Norwegian government is to propose exploration of a new sector of the Barents Sea, after a maritime boundary there was finally agreed with Russia.

Oil Minister Ola Borten Moe has said that the new area in the south-east Barents, covering around 44,000km2, could be explored from spring 2013. The government has already started seismic assessments in the region.

The demarcation of the maritime border with Russia was formally ratified last summer. Russia and Norway had been locked in a territorial dispute over the region since 1970, when Norway argued that the boundary should be drawn at the middle point between the nearest land areas belonging to both sides. Russia used claims drawn up by Stalin (unilaterally) that proposed a 'sectoral' approach along certain meridian lines.

A moratorium on oil and gas drilling in the disputed zone was announced in 1975, and the border was demarcated in 2010 based on a compromise which divides the disputed zone into two roughly equal parts.

Exploring the Barents Sea will allow Norway to begin offsetting its dependence on its North Sea oil and gas reserves, which are steadily declining. 181 blocks in the region have been nominated by oil companies in the preliminaries for the latest exploration round, the highest ever number. Nominating companies include ExxonMobil, Shell, ConocoPhillips, Total and Statoil.

The Oil Ministry will assess the nominations and announce which blocks are an offer by the summer, with full exploration work expected to go ahead by next year.

Sources: Upstream, Reuters, BBC

Tuesday, 17 January 2012

Indonesia to send observers to mediate Thailand-Cambodia border dispute

Indonesia has announced that it will deploy military observers to mediate the long-running border dispute between Thailand and Cambodia, after the two sides agreed to request Jakarta's involvement.

The announcement makes a breakthrough for the dispute, which has seen a number of deadly clashes between Thai and Cambodian troops around the Preah Vihear temple. The temple was given to Cambodia by the International Court of Justice in 1962, but Thailand continues to claim the surrounding land.

After flares in violence over the past two years, Bangkok and Phnom Penh have begun talking about de-escalating the situation and finding a compromise. The Association of South East Asian Nations, with Indonesia playing a leading role, has been instrumental in bringing the two sides to the negotiating table.

In late December Thailand and Cambodia agreed to simultaneously redeploy their troops from the disputed border area, and agreed to set up a working group to do so. Progress has been slow, however, and international observers were requested to oversee the process.

Indonesian military officials are still calculating the exact terms of their deployment but are expected to deploy within the next few months. They will work in joint teams with Thai and Cambodian observers along the disputed zone.

They will not, however, make any recommendations or decisions regarding the actual ownership of the border zone around the temple. The process of determining ownership will only start when troops have been withdrawn and military tensions are reduced.

Sources: Jakarta Post, AFP

Friday, 13 January 2012

China and India restart attempts to settle border

China and India have announced a new round of talks over their long and disputed border, following further tensions.

The new talks are not, strictly speaking, new – they are rescheduled from late November, when Beijing cancelled discussions over India's hosting of a conference attended by the Dalai Lama.

A host of issues are expected to be addressed in the fifteenth round of negotiations, which will be conducted by the respective Special Representatives Dai Bingguo and Shivshankar Menon. The land border between them, which is around 4,000km long, is disputed in both the west and the east. In the west, China does not recognise India's claims to Jammu and Kashmir; in the east, the two sides disagree over the status of the Indian state of Arunchal Pradesh.

India has also accused China of constructing military infrastructure in the border regions and boosting its troop presence there. Recently, a senior Indian general announced that in July 2011 Chinese forces damaged a wall along the border, which VK Singh dismissed as “a childish act” and said that in the event of a serious incident, “there will be enough noise and bloodshed and everyone will come to know”.

For some time the Special Representatives have failed to make headway on demarcating the border. Neither side appears to be willing to risk the political damage that would occur from compromising over territory. As border incidents remain rare, both Beijing and New Delhi seem to prefer to leave the status quo in place whilst they concentrate on building their bilateral relationship.

China has struck a conciliatory tone over the border, with Special Representative Bingguo insisting that disputes should be settled “wisely, calmly and properly”.

Sources: Times of India, Wall Street Journal

Tuesday, 10 January 2012

Iran, Saudi Arabia ink deal to develop joint oilfield

Iran and Saudi Arabia have agreed to develop a gasfield which straddles their mutual maritime border, a rare positive sign amid growing military tensions in the Gulf and other disputes over divided resources.

Iranian Oil Minister Rostam Qasemi said on 6th January that Tehran and Riyadh have already signed a deal to develop the Farzad A field, which is shared between them. They are also set to sign a deal on developing the nearby Farzad B gasfield as well as the Arash oilfield. Development plans for all three fields will be released before mid-March, according to the National Iranian Oil Company (NIOC).

The news about the Arash field is somewhat surprising: very recently, the Iranian government announced that it would begin unilaterally developing the field (which lies between Iran, Saudi Arabia and Kuwait) unless Kuwait finally agreed to joint development. That announcement followed a warning by a senior Iranian MP that Arab states were 'stealing' Iranian energy reserves from disputed fields.

Jointly developing the fields is part of an Iranian strategy to increase domestic gas and oil production in the face of tightening international sanctions. Iran is also rushing ahead with production on the giant South Pars field (shared with Qatar), where NIOC is working around the clock to bring subsequent production phases onstream.

Building a healthy working relationship with the Saudis will also help to reduce tensions between them over Iran's nuclear programme and its threats to close the Strait of Hormuz in reaction to any Western or Israeli airstrike. Iran's stance has alarmed Gulf Arab states, so working together on energy production will help to reassure Riyadh that Tehran is committed to a normal relationship:

Sources: Tehran Times, BBC

Tuesday, 3 January 2012

Iran threatens unilateral exploration at disputed Arash field

Iran has warned Kuwait that it will unilaterally proceed with full-scale drilling at the disputed Arash gas field in the Persian Gulf, if Kuwait fails to agree on joint development. The warning comes amid heightened tension in the Persian Gulf between Iran and its neighbours as well as the US.

Head of the Iranian Offshore Oil Company Mahmoud Zirakchianzadeh told state media that “if Iran's positive diplomacy is turned down, we will be carrying on our efforts at Arash field unilaterally”. There was no immediate response from Kuwait. The Iranian statement comes just two weeks after a senior Iranian MP accused Arab states of stealing oil and gas from shared fields in the Persian Gulf.

Emad Hosseini specifically referred to the Arash field in his comments, in which he accused Saudi Arabia, Kuwait and the United Arab Emirates of working together to exploit joint fields to Iran's cost .There are at least fifteen fields shared between Iran and its Gulf Arab neighbours, many lying close to maritime boundaries which are themselves often in dispute.

Negotiations on the Arash field have been ongoing since 2006, when Iran and Kuwait agreed in principle to jointly develop the field. In March 2010 they re-confirmed their commitment to joint development, but at the beginning of last month Tehran announced that it would begin drilling four wells at the field.

The maritime border between Iran and Kuwait remains unconfirmed, despite numerous rounds of talks between the two sides. Although essentially a technical issue, political tensions in the Gulf and the presence of joint gas fields has stymied progress on defining the border.

Sources: Reuters, IRNA