The Natunas, some 400 miles northeast of Sumatra, have been a subject of dispute since 1993, when Beijing published a map showing Chinese "historic claims" on a gas field northeast of the islands. Jakarta rejected these claims as without basis in international law. China has since sought to reassure Indonesia that it does not lay claim to the Natunas, nor all the waters of the South China. China renounced its claims on the Natunas in 1995, but not the gas field.
Indonesia is now the world's biggest exporter of LNG. There are significant gas deposits at the offshore Natuna gas field in the South China Sea, but proposals for an LNG project long remained hampered by the high quantities of CO2 associated with the gas. The East Natuna block was originally called the Natuna D Alpha block. Following the discovery by PERTAMINA-Agip Spa in 1973, in 1983 PERTAMINA -Esso succeeded to prove that the gas reserve in block D Alpha of the Natuna Sea was huge. The Natuna D-Alpha block has about 210-222 trillion cubic feet (TCF) of which 46 tcf is thought to be commercially recoverable, accounting for about a quarter of Indonesia's total commercially recoverable gas reserves of 182 tcf. The Natuna D-Alpha is about 1,100 kilometers (700 miles) north of Jakarta and 200 km east of the West Natuna fields, which feed gas to Singapore.
Indonesia and Exxon Corp. of the United States signed an agreement in January 1995 to invest $40 billion in the Natuna natural gas project in the South China Sea. The exploration and exploitation of natural gas would be conducted by Pertamina and an Exxon affiliate, Esso Exploration & Production Natuna Inc. Tests indicated that the natural gas had high carbon-dioxide content at 70%. Full development of the project would require 18 offshore platforms and 200 production wells. Production at a rate of 56.6 million cubic meters per day (m /d) of natural gas could last for 30 years. Japan was given the top priority to buy natural gas from the Natuna Field.
In the first quarter of 2008, the government announced that it had terminated Exxon Mobil’s rights to develop the 46 TSCF off-shore Natuna D-Alpha gas field and appointed state oil company Pertamina to run the project. The government said Exxon Mobil failed to show sufficient progress in developing the field. Exxon Mobil officials pointed to their expenditure of approximately $400 million for exploration activities and asserted its contract gave the firm the right to an extension until 2009. Pertamina has neither the financial nortechnical expertise to develop the Natunafield on its own. Exxon Mobil executives said they remained committed to a joint partnership with the GOI on the Natuna project, but the government and Exxon failed to reach an agreement on a new revenue-sharing deal.
Conoco Phillips has had a presence in Indonesia for more than 40 years. It has focused in two core areas: the South Natuna Sea and onshore South Sumatra. As of 2008 it had 11 exploration and production licenses comprising roughly 14.5 million gross acres. The company operated nine Production Sharing Contracts (PSCs), four of them offshore: South Natuna Sea Block B, Ketapang, Amborip VI and Kuma. The remaining five PSCs were onshore. ConocoPhillips is aparticipant in the West Natuna Gas Supply Group (WNG). WNG jointly markets natural gas from fields in three South Natuna Sea PSCs, including Block B, to SembGas in Singapore.
On 03 December 2010 Indonesian state oil and gas firm PT Pertamina signed an agreement with Exxon Mobil to make it a partner in the development of the huge Natuna D-Alpha gas field. On 17 December 2010 Pertamina signed agreements with Total and Petronas as partners in the development of the Natuna D-Alpha gas field.
Although China does not claim the Natuna Islands themselves, considered Indonesian territory, PRC maps of the region include the waters just north of the Natunas. Indonesia insists the area is part of its EEZ. These waters cover part of the world’s largest offshore gas fields. With an estimated 1.27 trillion cubic meters of recoverable gas, they represent 40% of Indonesia’s gas reserves.
China's southeastern expansionism has so far met with only token resistance, except for the Natunas. The unprecedented Indonesia-Australia bilateral security treaty concluded in late 1995 reflected Jakarta’s need for an ally in the event of confrontation with China around the Natunas. In September 1996 Indonesia conducted air, land and sea maneuvers near the natural gas-rich Natuna Islands that were meant to send an unequivocal signal that Jakarta is not about to abandon its claims on them. After East Timor’s secession, with Australia’s leading role in protecting the new state, Jakarta abrogated the treaty.
With a weak coastal defense navy and a defense force barely able to cope with internal unrest, Indonesia could not defend its South China Sea EEZ. China’s cartographic claim represent the only challenge to ownership of waters around the Natunas. The PLA Navy has not moved into the area.
In March 2002, scientists from the South China Sea region conducted a major biodiversity expedition to the waters off the Anambas and Natuna Islands in Indonesia. The two week expedition obtained over 3000 specimens representing a large diversity of plant and animal species. Many were new records for the area, and some were also new to science. The expedition, a result of the Workshop on Managing Potential Conflicts in the South China Sea, was seen as the first of others that will foster closer collaboration between regional scientists and managers.
Since 1990, a series of workshops entitled “Managing Potential Conflicts in the South China Sea” (WMPC-SCS) have been hosted in various cities in Indonesia by their Department of Foreign Affairs. These non-governmental gatherings, attended by various diplomatic, military and academic participants in their private capacities, have explored ways to nurture cooperation among the authorities bordering the South China Sea. This informal political process has its origins in the Third United Nations Conference on the Law of the Sea. The WMPC-SCS is structured to having several Technical Working Groups (TWGs) on different fields of current issues such as law of the sea, marine scientific research, marine pollution, safety of navigation etc.
Anambas and the Natuna Islands group consist of about 70 small islands spread in an area of about 120 miles east-west by 70 miles north-south. Some of the islands are hilly or mountainous, with major human populations established in two small towns named Tarempa in Jemeja Island, Anambas and Ranai in Natuna Besar Island, Natuna.
The depth of the water is generally not more than 60 meters. The sea bottom is generally flat or slightly sloping down from south to north. The sediment covering the bottom mostly sandy mud in the open sea. Reefs are mostly fringing the island but one or two solitary reefs may be found.
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