Maritime rivals China and Brunei vow to work together on oil and gas in disputed waters

China and Brunei have pledged to work together on oil and gas exploration in the South China Sea, though a Chinese analyst noted that more negotiations were needed for energy cooperation to move forward. In a joint statement on Thursday, China and Brunei agreed to support commercial cooperation in maritime oil and gas resources. The statement was released following a meeting between President Xi Jinping and Brunei’s monarch, Sultan Hassanal Bolkiah, who is on a three-day visit to China. The two sides agreed to “cooperate in the development of resources in mutually agreed areas”, without giving details on which areas would be involved. They agreed to cooperate without prejudice to “legal positions of the respective countries under international law”, including the United Nations Convention on the Law of the Sea (Unclos), which governs the use of the world’s oceans and their resources. China and Brunei have overlapping territorial claims in the South China Sea. The disputed areas include Louisa Reef and other rocks and reefs in the Spratly Islands, known in Chinese as the Nansha Islands. Located on the northern coast of the island of Borneo, Brunei claims a 200-nautical-mile exclusive economic zone, which overlaps with the U-shaped nine-dash line that Beijing uses to mark its claim to most of the South China Sea. Some of the areas disputed by Brunei and China also overlap with the maritime claims of Indonesia, Malaysia, the Philippines and Vietnam. In 2016, an international tribunal found Beijing’s nine-dash line claim had no legal basis under Unclos – a decision Beijing has rejected. However, the ruling in the landmark case filed by the Philippines has given rival claimants more leverage in their own maritime disputes with Beijing. Ding Duo, an associate research fellow at the National Institute for South China Sea Studies in the southern island province of Hainan, said the wording of the statement reflected a cautious approach by the two sides. “Rather than using words such as ‘overlapping’ or ‘disputed’, the term ‘mutually agreed areas’ is more neutral and has watered down the political or legal implications that could draw excessive attention or interventions from the outside world.” Ding said the two countries appeared to be playing down their maritime disputes by stating that cooperation would be carried out based on their “legal positions”. “This is an acknowledgement of the reality that the two sides still have serious differences, at least in their respective positions, but that would not affect their cooperation on this issue,” Ding said. However, Ding said that while the agreement on maritime cooperation was a “small step forward”, it would be largely “symbolic” without concrete consensus. He noted that the area contested by China and Brunei was “relatively small” compared with the “complexities” of other territorial disputes in the South China Sea. “On the other hand, China is still very cautious in dealing with its ties with Brunei to fend off potential interventions from other regional players and powers outside the region.” Unlike other rival claimants, Brunei has been silent on the territorial and maritime disputes despite growing tensions in the South China Sea. The small Southeast Asian country has no military presence in the contested waters. In a rare move, Brunei in 2020 published a position statement on the South China Sea that urged countries to discuss issues bilaterally and underscored that negotiations should be based on international law. That statement also called for an agreement between China and the Association of Southeast Asian Nations (Asean) on a South China Sea code of conduct. Negotiations on the code of conduct have been stalled since 2020, largely because of the Covid-19 pandemic and maritime tensions between Beijing and Manila. It is not the first time China and Brunei have agreed to cooperate on maritime resource development. Following Hassanal Bolkiah’s 2013 visit to Beijing, the two countries set up a joint venture between state-owned China National Offshore Oil Corporation and Brunei National Petroleum Company, but progress on the venture has been limited. In 2018, the two sides agreed to link Brunei’s Vision 2035 development blueprint with the Belt and Road Initiative, Beijing’s plan to foster global trade and infrastructure links. Since then, they have collaborated on large-scale projects including a petrochemical joint venture and a bridge – the largest in Southeast Asia – that stretches across Brunei Bay. Brunei is located along routes connecting American military bases in the Philippines, Thailand, Singapore and Australia. The country has maintained close military cooperation with the United States, and the two sides regularly carry out joint exercises and training programmes. In 2022, Brunei announced it had acquired a new squadron of US-made drones. It said the drones would be used for border control, law enforcement operations as well as surveillance and intelligence gathering.

Maritime rivals China and Brunei vow to work together on oil and gas in disputed waters

They pledge to support resource development in ‘mutually agreed areas’ of South China Sea, but analyst says agreement is largely symbolic