The leak of a diplomatic letter last month in which China urged Malaysia to halt its offshore oil and gas activities near Luconia Shoals has brought renewed attention to undersea resources in the South China Sea. In the wake of the letter’s publication, Malaysian prime minister Anwar Ibrahim gave a rare public acknowledgement of Beijing and Kuala Lumpur’s opposing positions and Malaysia’s intention to continue extracting oil and gas resources, even in areas disputed by China.
Given Malaysia’s usually quiet approach to the South China Sea, this diplomatic spat was sure to catch the public eye. But Chinese opposition to Malaysian hydrocarbon development is nothing new. And remote sensing data from 2024 shows the China Coast Guard (CCG) constantly pressuring Malaysian oil and gas operations.
Automatic Identification System (AIS) data shows that the CCG has operated in Malaysian-claimed waters like clockwork in 2024. From January 1 through September 30, AMTI found nine different CCG vessels that spent time patrolling in Malaysia’s exclusive economic zone (EEZ) and continental shelf. At least one CCG vessel was on station nearly every day, remaining in the area for up to six weeks before being relieved by another ship.
AIS data of China Coast Guard ships found operating within Malaysian oil and gas concessions, January - September 2024
CCG ships on patrol in Malaysia’s EEZ spent most of their time near Luconia Shoals, a group of mostly submerged reefs 80 nautical miles northwest of Sarawak. Several vessels also rotated to patrol an area at the intersection between Malaysian, Indonesian, and Vietnamese continental shelf claims, making trips through Vietnamese oil and gas projects in blocks 06-01, 12W, and 05-03, as well as Indonesia’s D-Alpha block.
Luconia sits between a number of major Malaysian oil and gas projects, many of them started within the last two years. In fact, 2023 was a banner year for exploratory drilling by Malaysia’s Petronas, with 25 new wells (the highest annual total since 2015) leading to 19 discoveries and two appraisal successes which together amounted to over 1 billion new barrels of oil equivalent in offshore resources.
AIS data of China Coast Guard ships found operating in Malaysian oil and gas concessions, January - September 2024
According to announcements from Malaysia’s Marine Department, 15 new exploratory wells have been drilled off Sarawak in 2024. CCG vessels at Luconia made frequent tours to visit these new operations as well as many of the producing fields named in the leaked diplomatic note, passing as close as 1,000 meters from gas production platforms at Timi, Kasawari, and Jerun.
Despite the CCG’s efforts, Malaysia has not only continued its existing oil and gas production but also expanded exploratory activity. While China’s presence at Luconia Shoals is continuous, it doesn’t come close to matching the scale of activity farther north in the Spratly Islands, where Beijing has deployed dozens of coast guard and hundreds of militia ships to contest Philippine activities in disputed waters. However, with Malaysia’s expanding drilling and a potential reduction in China-Philippine tensions, Beijing could ratchet up the pressure on Malaysian hydrocarbon production.
