China’s Coast Guard and air patrols have again been making Beijing’s presence felt as operators engaging in upstream activities offshore Malaysia are forced to think about the geopolitical aspect of their plans.

China Coast Guard vessels have been regularly sighted in the vicinity of Petronas’ Kasawari field development offshore Sarawak since early June, according to the US think-tank Center for Strategic & International Studies (CSIS).

“It demonstrates again Beijing’s persistence in challenging its neighbours’ oil and gas activities within their own exclusive economic zones. And the air patrol, which was likely not a coincidence, suggests Beijing’s willingness to engage in parallel escalation to pressure other claimants to back down,” read a 7 July report from CSIS’ Asia Maritime Transparency Initiative (AMTI).

The activity coincides with a patrol by Chinese military planes near Malaysia, which prompted scrambles by Malaysian aircraft and recriminations from the Kuala Lumpur administration.

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Chinese Foreign Ministry spokesman Wang Wenbin said: “To my knowledge, it was a routine training conducted by China's air force over waters to the south of Nansha Islands. It doesn't target any country.

“During the training, China's air force strictly complied with international law and didn't enter the airspace of any other country. The Chinese side has communicated with the Malaysian side over this,” Wang said.

This is at least the third time since early 2020 that the China Coast Guard has allegedly harassed Malaysian E&P operations.

The latest tensions revolve around national upstream company Petronas Carigali’s Kasawari gas field on Block SK 316 offshore Sarawak. AMTI noted that from 19 to 24 May, Petronas used six tugs to transport materials to the port of Miri in Sarawak in preparation of the current installation of a wellhead platform at Kasawari.

Tactical formation

“The Malaysian government announced this in advance through a notice to mariners, which would have put both local operators and China on alert. On 1 June, just before the construction work at Kasawari was to begin, 16 Chinese military aircraft approached to within 60 nautical miles of Sarawak ‘flying in tactical formation’,” the report read.

Malaysian fighter jets scrambled from Labuan after the Chinese planes ignored attempts to communicate.

After the incident, Malaysia Foreign Minister Hishammuddin Hussein initially claimed that the aircraft had violated “Malaysian airspace and sovereignty”, summoned the Chinese ambassador to Malaysia and vowed to file a diplomatic protest.

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Washington-based CSIS noted that China Coast Guard vessels regularly operate around the nearby Luconia Shoals, staying there for months and often making passes by Malaysian offshore E&P operations.

“Ship-tracking data from commercial provider MarineTraffic shows that the CCG 5403 was operating in the area on 4 June when the Sapura 2000, a pipelay barge owned and operated by Malaysia’s Sapura Energy, arrived at Kasawari along with several offshore supply vessels. Sapura is contracted to install the jacket and topsides of the project’s wellhead platform.

“Automatic information system [AIS] data from the CCG 5403 shows it operating in proximity to the Sapura 2000 almost immediately after the latter arrived at Kasawari. This is despite the presence of the Royal Malaysian Navy’s Bunga Mas Lima, a naval auxiliary ship — and veteran of oil and gas standoffs — deployed to the area a day in advance of the Sapura 2000’s arrival, likely in anticipation of a response from Chinese law enforcement,” AMTI added.

Replacement vessel

According to a detailed account in the AMTI report, the CCG 5403 was later replaced by the larger CCG 5303, a 138-metre Zhaoduan-class cutter. AIS data shows that the Bunga Mas Lima returned to Sarawak on 13 June, but the CCG 5303 remained.

The report stated that the latter vessel’s AIS signal went dark from 17 June until 5 July, but a 3 July image showed it still operating near the Kasawari field, “suggesting it probably spent that time continuing to harass the Sapura 2000”.

On 3 July, the Sapura 3000 joined the Sapura 2000 to install the platform. AIS data from 5 July shows the CCG 5303 clearly objecting to that activity, passing less than 400 yards from the Sapura 3000, and about 200 yards from one of its offshore supply vessels, the Bes Elite.

As of last Wednesday, the CCG 5303, Sapura 2000, and Sapura 3000 all remained at Kasawari. AMTI has not observed any other activity from Malaysian law enforcement or military since the departure of the Bunga Mas Lima in June.

Two other Malaysia-flagged vessels, the SK Technik and MV Padas, have been chartered by Petronas for the hook-up and commissioning of the topsides of the KSDP-A platform. This work at Kasawari is expected to begin on 13 July and take about 20 days to complete.

“While the current tensions are likely to subside once installation of the wellhead platform is complete, a second phase of work at Kasawari slated for 2022 suggests that friction between Chinese law enforcement and Malaysian offshore energy operations off Sarawak is almost guaranteed to continue,” the CSIS concluded.