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MTJA, an example of maritime 'Shared Prosperity'

Last update: 22/09/2019
By Linda Khoo

BANGKOK, Sept 22 -- The Malaysia and Thailand Joint Authority (MTJA) set an example of maritime ‘shared prosperity’ in the region when it contributed US$10 billion to both countries since its establishment 40 years ago.

To date, MTJA has produced five trillions of standard cubic feet (TSCF) of gas and 65 million barrels of condensate.

Despite overlapping maritime claims in the disputed South China Sea, MTJA is a unique model of international cooperation on joint development of petroleum in an overlapping-continental-shelf-claimed area.

The joint body, established in 1979, is considered as the world’s first organisation that successfully manage international overlapped areas which arose from the excellent relationship between Malaysia and Thailand.

The two neighbouring countries inked an agreement to jointly explore and exploit non-living resources in the Joint Development Area (JDA) of approximately 7,250 square kilometres, located offshore about 150 kilometres (km) from Kota Bharu, Kelantan, Malaysia and 260 km from Songkhla, southern Thailand for mutual and equal benefits of the two countries.

The agreement also includes sharing cost and benefits from the exploration and production activities in the JDA under the Production Sharing Contract (PSC) at a ratio of 50:50 for 50 years.

At present, the JDA has three blocks of production of petroleum and natural gas, namely A-18, B-17 & C-19 and B-17-01, that produce a variety of economic benefits, including the employment of over 50,000 job opportunities.

The operators are – Block A-18 (3,000 km) is Carigali Hess Operating Company Sdn Bhd (a collaboration between Petronas Carigali from Malaysia and HESS Oil Company of Thailand while Block B-17 & C-19 and B-17-01 (an area of 4,250 km), is a collaboration between Petronas Carigali and PPTEPI Operating Company Sdn Bhd (CPOC).

Economic Affairs Minister Datuk Seri Mohamed Azmin Ali commended MTJA for the marvellous job for the past 40 years.

“This is a great model to show that with mutual respect and understanding, both nations can provide better opportunity and jobs, and also new growth area that can benefit both countries.

“I believe MTJA would be able to strengthen collaboration and ensure it continue to grow to ensure Malaysia and Thailand benefit from this strategic cooperation,” he told Bernama here recently.

On Friday, in conjunction of the 40th anniversary of the establishment of MTJA in Bangkok, Mohamed Azmin announced MTJA would provide an endowment of US$2 million to each government to support research and development (R&D) in petroleum activities for JDA.

He said the endowment was a clear commitment to ensuring the collaboration continued to grow and provide a better facility and R&D to be conducted for the future generation.

“We hope to see more initiatives to be embarked by MTJA, especially R&D in upstream and downstream oil and gas industry,” he said.

Meanwhile, Malaysian Co-Chairperson of MTJA Tan Sri Dr Rahamat Bivi Yusoff said MTJA has been playing a key role in strengthening energy security through government-to-government relations, working with the private sector and investing in research for the future.

“The revenue has contributed to the overall development of Thailand and Malaysia. Hopefully, we will continue to do so for years to come,” he said.

MTJA Thai Co-Chairman of MTJA Dr Kurujit Nakornthap said the assessment of the potential of petroleum in JDA has concluded that there is still a high volume of natural gas which can create energy security for both Thailand and Malaysia for at least the next 20 years.

“This will create other related benefits for the population and communities in the surrounding areas for both countries, including an increase of employment, stimulate economy and infrastructure development,” he said.

Meanwhile, Thai Energy Minister Sontirat Sontijirawong said MTJA’s proud achievements had brought about not only the equal financial benefits to both governments but also mutual energy security and economic developments to the two neighbouring nations from the natural gas production from JDA.

“I hope MTJA could serve as a model for dispute settlement, for a peaceful solution and a successful outcome,” he said.

In a statement, MTJA said Malaysia and Thailand have a framework for building sustainability both short term and long-term in the form of MTJA fund, focuses on research into technology and clean energy as well as creating participation in solving climate change.

MTJA also provided 16 research grants for universities with a value of US$25 million in areas, including facilities, health, safety, environment, sand production, power, sub-surface operations and carbon dioxide.


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