Malaysia - Vietnam
JDA17@MYVN
Asia
Memorandum of Understanding between Malaysia and the Socialist Republic of Vietnam for the Exploration and Exploitation of Petroleum in a Defined Area of the Continental Shelf Involving the Two Countries
Malaysian PSC modified to include JDA concept not available in public domain.
Map Source: https://cil.nus.edu.sg/wp-content/uploads/formidable/14/1992-MOU-between-Malaysia-and-Vietnam-for-the-Exploration-and-Exploitation-of-Petroleum.pdf
Implementation Date: MOU signed 5 June 1992. JDA concept was integrated into a previously executed Malaysian PSC.
Maritime border undefined in parts
Joint Management Model
Summary:
After Vietnam protested Malaysia’s award of Production Sharing Contracts (PCS) in the overlapping area, Malaysia suspended exploration and negotiated a JDA Memorandum of Understanding (MOU) with Vietnam. The MOU was signed in 1992 allowing the continuation of previously signed PSC contracts, modified to add the Vietnamese national energy company (Petrovietnam) to the PSC agreement.
The 1992 MOU covered their overlapping claims in the Gulf of Thailand. The long narrow (100 miles and less than 10 miles width) ‘Defined Area’ was to be jointly developed by their nominated State-owned corporations (Petronas from Malaysia and PetroVietnam from Vietnam). The coordination committee consists of 8 members equally nominated by national oil companies and have equal voting rights.
Subsequent agreements covered commercial arrangements, oil and gas sharing, and tax arrangements. These agreements have not been located and may not be in the public domain,.
The first petroleum was extracted from the Bunga Kekwa field on 29 July 1997.
Split:
(1) Both parties agree, pending final delimitation of the boundary lines of their continental shelves pertaining to the Defined Area, through mutual cooperation, to explore and exploit petroleum in that area in accordance with the terms of, and for a period of the validity of this Memorandum of Understanding.
(2) Where a petroleum field is located partly in the Defined Area and partly outside that area in the continental shelf of Malaysia or the Socialist Republic of Vietnam, as the case may be, both parties shall arrive at mutually acceptable terms for the exploration and exploitation of petroleum therein.
(3) All costs incurred and benefits derived from the exploration and exploitation of petroleum in the Defined Area shall be borne and shared equally by both parties.
<From JDA17@MYVN#1 MOU [2]>
Governance:
Malaysia and the Socialist Republic of Vietnam agree to nominate PETRONAS and PETROVIETNAM, respectively, to undertake, on their respective behalf, the exploration and exploitation of petroleum in the Defined Area; (b) Malaysia and the Socialist Republic of Vietnam shall cause PETRONAS and PETROVIETNAM, respectively, to enter into a commercial arrangement as between them for the exploration and exploitation of petroleum in the Defined Area provided that the terms and conditions of that arrangement shall be subject to the approval of the Government of Malaysia and the Government of the Socialist Republic of Vietnam
<From JDA17@MYVN#1 MOU [3]>
Other References:
Lan-Anh T. Nguyen, Diplomatic Academy of Vietnam, ‘Joint Development Between Malaysia and Vietnam’ presentation. This presentation gives an overview of the JDA arrangements and provides historical chronology.
<JDA institute Locator><Original Source>
International Institute for the Law of Sea Studies (ILSS) webpage entitled ‘Practice on Provisional Arrangements in maritime Disputed Areas, Joint Development Zones, Malaysia-Vietnam case’
<JDA Institute Locator> <Original Source>
Thao, Nguyen Hong, ‘Joint Development in the Gulf of Thailand’ [1999](Autumn) IBRU Boundary and Security Bulletin