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