The Chinese Coast Guard (CCG) and Royal Malaysian Navy have been involved in yet another standoff over oil and gas drilling in the South China Sea as tensions mount between regional powers over resources in the strategic sea area.

The CCG vessel 5402 in mid-November approached the Borr Drilling-owned jack-up Gunnlod, which is working for Thailand’s national upstream company PTTEP on Block SK 410B off Sarawak, East Malaysia, according to the Asia Maritime Transparency Initiative (AMTI) of the Center for Strategic & International Studies (CSIS).

'High-stakes game of chicken'

The incursion impacted the rig and its support vessels that are operating just 44 nautical miles off Sarawak.

Malaysia deployed a naval vessel in response, and it continues to tail the CCG ship.

AMTI noted that analysis of AIS data from Marine Traffic and satellite imagery from Planet Labs revealed “this high-stakes game of chicken that would otherwise have remained under the radar”.

The vessel 5402 had left Hainan, southern China in late October on what would be a standard patrol route, stopping at two of China’s artificial island bases before taking up position at Luconia Shoals in Malaysia’s exclusive economic zone.

On 10 November, the vessel started patrolling in oil and gas blocks off Sarawak, passing close to Sapura Energy’s multi-purpose support vessel, Sapura Constructor.

Two days later, the 5402 headed east of the Luconia Shoals before returning to its post, “seemingly attracted by the arrival” of the Gunnlod, according to the Washington-based CSIS.

The jack-up rig is being supported by two anchor-handling tug supply vessels — the JM Abadi and the Lewek Plover.

PTTEP has the Gunnlod on charter drilling an appraisal well on its 2019 Lang Lebah giant gas discovery on Block SK 410B, for which fast-track development plans have been mooted. The jack-up will next likely drill exploration targets for PTTEP off Malaysia.

Later this month, the 5402 approached to within two nautical miles of the Gunnlod "presumably warning it to cease operations as the CCG has in other recent cases involving Malaysian and Vietnamese offshore drilling”, added the CSIS.

This is the nearest to shore the AMTI has ever documented such Chinese vessels.

Escalate or de-escalate?

In response, the Malaysian Navy deployed the KD Keris, which stayed near to the drilling rig before following the 5402 back to the Luconia Shoals.

As of 25 November, the Gunnlod remained on location and the CCG vessel had not returned.

“Recent history suggests China could escalate the standoff with further deployments,” said the CSIS.

“But it might also de-escalate, recognising that harassment of drilling operations so close to Malaysian shores is a significant provocation.”

Meanwhile, Malaysia’s national upstream oil and gas company Petronas Carigali is drilling with Transocean’s semi-submersible Deepwater Nautilus on nearby Block SK 316 off Sarawak, which could yet also attract Chinese interest.

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Malaysia last December submitted documentation to the United Nations Convention on the Law of the Sea with the aim of extending the area of its maritime boundaries in the South China Sea.

China for its part claims some 80% of the Luconia Shoals.

Neither government is known to have yet publicly commented on the latest standoff in these disputed waters.