A China-Russia confrontation? New Great Power Tensions Simmer in Indonesia’s North Natuna Sea

Photo from www.tnial.mil.id

This month, Indonesia’s Tuna oil block in the North Natuna Sea enters a new phase of natural gas and crude oil exploitation. Russian oil and gas company Zarubezhneft is preparing to resume the project.

THE Tuna block The project is a strategic oil and gas field located in Indonesia’s exclusive economic zone, just 14 kilometers from the Vietnamese border. But it has long faced significant geopolitical pressure because it straddles China’s illegal nine-dash line.

The growing need for energy sources due to the crisis in the Middle East means that the exploration and exploitation of energy has become increasingly important to the region. However, geopolitical risks could follow, given the Tuna Block’s location in a contested maritime area.

Contested and resource-rich block

Before Zarubezhneft took over the entire project this month, it jointly carried out the exploration and exploitation of the Tuna block with UK Port Energy (formerly Premier Oil).

However, due to the intensification of US sanctions against Russia following the Russia-Ukraine war, Harbor has decided to exit and sell its operating interests in two blocks in Indonesia, includingsomething 50% participation in the tuna production sharing contract. This left Russia fully responsible.

Due to its strategic location and abundant energy resources, the Tuna bloc has faced several pressures over the years, notably from China, which considers it part of its territory. Indonesia does not recognize the Chinese nine-dash line because it was deemed illegal by an international court, but Beijing has consistently pressured Jakarta to acknowledge its claims.

In 2021, for example, China lodges unprecedented protest against exploration and exploitation in the Tuna block. At the time, China asked Indonesia to stop drilling on a temporary offshore platform because it was located in Chinese maritime territory. Indonesia refused to accept China’s claim because it was clearly located within Indonesian territory, and this claim was adjudicated. illegal under international law by the 2016 South China Sea arbitration.

There have also been numerous reports that China sent a seeking message ship, Haiyang Dizhi 10, and a Chinese coast guard vessel to maneuver near the Tuna Block operating platform in 2021. This was seen as a threat to Indonesia’s sovereign rights to exploit energy resources. In 2016, there were also incidents in which Indonesian law enforcement fired on Chinese fishing boats in the Indonesian EEZ.

Under President Joko Widodo (2014-2024), Indonesia developed closer economic ties with China. However, it has also maintained its strong commitment to protecting its sovereign rights over oil and gas exploration in the North Natuna Sea.

Russia versus China in the tuna bloc?

This firm stance against Chinese intervention in the Natuna Sea took an unexpected turn after President Prabowo Subianto came to the office.

During the new president’s first official visit to Beijing, he and President Xi Jinping issued a joint statement who recognized Indonesia overlapping claims with China and aimed to promote their common development. However, it remains unclear whether “joint development” includes oil and gas exploration.

It is also unclear how this unprecedented step by an Indonesian president to recognize a joint claim with China will affect oil and gas explorations in the North Natuna Sea – and especially whether there will be another project with China.

Indonesia’s decision so far to grant a concession to Russian oil and gas company Zarubezhneft, rather than a Chinese company, suggests that the Indonesia-China joint development proposal for 2024 has not yet come to fruition.

However, given the increasingly close ties between Beijing and Moscow, it remains to be seen whether China will continue its intrusions and protests against Russia’s Zarubezhneft, as it did when Harbor Oil was involved.

Vietnam and China

Another important question is how this will affect the oil exports to Vietnam in 2026. In 2018, Indonesia committed to exporting oil to Vietnam this year. The two countries also signed a maritime delimitation agreement in December 2022. However, the DPR, Indonesia’s national legislature, has still not ratified the treaty.

This is interesting because the agreed demarcation of the EEZ between Indonesia and Vietnam in the North Natuna Sea also overlaps with China’s nine-dash line, and China has openly opposed the agreement.

It is unclear why Indonesia has not yet ratified the treaty. Is it because Indonesia, under Prabowo, recognized overlapping claims with China? Under normal circumstances, it would be rare for the DPR to take more than two years to conclude a simple maritime boundary delimitation treaty.

Sending signals

Recent developments in the North Natuna Sea are very significant, given the recent geopolitical changes that have seriously disrupted the global economy.

Energy autonomy has become increasingly vital due to the Hormuz crisis. How Indonesia deals with the tuna bloc will inevitably send geopolitical signals about its position in relation to major powers.

Amid this geopolitical contestation, Indonesia should strongly support the 2016 South China Sea Arbitral Tribunal and should not back down from China’s intrusions in the Indonesian part of the North Natuna Sea.