Can Thailand, Cambodia unlock massive oil and gas reserves?

Cambodia and Thailand are trying out an obscure United Nations tool to try and settle a decades-long maritime territorial dispute that could lead to unlocking hundreds of billions of dollars in oil and gas reserves.

Earlier this month, Phnom Penh filed a notice for "compulsory consultation" under the UN Convention on the Law of the Sea (UNCLOS), which Cambodia and Thailand are both party to.

In effect, that invited Thailand to join Cambodia in UN-backed conciliation talks over their 26,000 square kilometers of overlapping claims in the Gulf of Thailand.

The filing comes after Thailand in May pulled out of a 2001 agreement with Cambodia that had committed the pair to settling the competing claims and jointly developing the oil and gas fields.

Thailand's pull-out of the MoU comes amid tensions between the neighbors that have been running high since a land border dispute turned deadly last year.

"The compulsory conciliation process may be useful in helping Cambodia and Thailand achieve an agreement on overlapping maritime claims," said Matthew Wheeler, a senior Southeast Asia analyst for the International Crisis Group.

Under the process of the UN convention's conciliation clause, Cambodia and Thailand have each selected two independent experts as "conciliators" to the ad hoc "conciliation commission."

The commission will investigate the facts and legal position of ​each state to deliver a set of non-binding recommendations, which are also sent in a report to the UN ​secretary general.

Tapping reserves a mutual interest

According to estimates cited by both the Thai and Cambodian governments, the overlapping claims area in the Gulf of Thailand may hold $300 billion worth of untapped oil and gas reserves by some rough estimates, including 11 trillion cubic feet of natural gas alone.

"Both countries would benefit substantially. Thailand's oil fields … have been in decline for a few years, leading to [liquefied natural gas] imports." said William Jones, an assistant professor at Thailand's Mahidol University.

Cambodia, meanwhile, is entirely dependent on imports for its oil and gas. And without any refineries of its own, Jones said, it would likely have to send any oil and gas it extracts from the Gulf to Thailand for processing, at least until it develops its own capacity.

"Regardless, given the high energy prices, dependency levels, and now the added uncertainty from the Middle East, the Gulf of Thailand would provide a good buffer for consumption and healthy profits for those involved," Jones told DW.

But the hurdles to reaching a deal may be just as great, especially in the shadow of last year's border fighting. Multiple armed clashes over competing land border claims left dozens of soldiers and civilians dead.

While Cambodia and Thailand have not exchanged fire for months, both armies remain on edge and a mutual mistrust runs deep.

And because the conciliation commission's recommendations will be non-binding, Cambodia and Thailand would have to take them on by choice.

How does the UN-backed process work?

The independent experts selected by Cambodia and Thailand have until late July to choose a chairman to round out the commission, which then has 12 months to issue a report with non-binding recommendations.

Bangkok initially hesitated to engage. Having lost a number of cases over competing land claims to Cambodia at UN courts in the past, Thailand would rather not get international bodies involved in its border rows.

"But once Cambodia officially began the process, then Thailand basically had two choices — just don't participate and look bad and have the [UN] secretary general choose your conciliators and all this for you, or just go into it … with eyes wide open,” Jones said.

The fact that Thailand ultimately chose to participate is "already a good sign," said Phattharaphong Saengkrai, a lecturer on international law at Thailand's Thammasat University.

Saengkrai said as the four conciliators are from Denmark, France, Germany and South Africa, their outside input also comes with the potential for fresh thinking.

"We need a breakthrough, and the breakthrough may come from the parties themselves. But with these five highly qualified and seasoned international lawyers and diplomats, they might come up with some ideas that both parties can agree on," he told DW.

International Crisis Group analyst Wheeler said the involvement of foreign lawyers and diplomats may also give Cambodia the "political space" it would need to step back from some of its more "excessive" claims in the Gulf of Thailand, "which would improve prospects for an equitable settlement."

Since UNCLOS took effect in 1994, its conciliation clause has been invoked only once before — by East Timor against Australia in 2016. Within two years, they had a deal.

Saengkrai said East Timor and Australia's conciliation started out under arguably even bleaker conditions than those now between Cambodia and Thailand.

Australia and East Timor started their conciliation talks following revelations that Australia had been spying on East Timor to try and gain the upper hand in earlier bilateral negotiations.

Despite these hurdles, both countries were able to reach an agreement "partly because of the extensive confidence-building measures introduced by the conciliators," Saengkrai said.

With Cambodia and Thailand having selected two of the conciliators that helped East Timor and Australia settle their dispute, he added, "we could expect some diplomatic wisdom from them again."

Overcoming bad blood

However, with bilateral ties at their lowest point in decades, the conciliators in Thailand and Cambodia's UNCLOS case have their work cut out for them.

"The political environment is really not conducive. There's just a lot of hurt feelings and hate on the Thai side, and I would imagine on the Cambodian as well," Jones said.

"The relations are quite poisoned, all the way from the top down to the bottom because of last year," he added.

Even if the leaders might want to compromise, Jones said, the nationalist fervor the fighting has kicked up among the public could prove challenging.

"The biggest obstacle is going to be the politics and optics behind it," Jones said.

"This includes how the governments prepare the populations in terms of their communications, prepping the ground months in advance, and building the political will to actually carry these recommendations out," he added.

Wheeler and Saengkrai agreed that public sentiment may prove the greatest obstacle to a deal, in Thailand especially.

"The good news is that conciliation is 12 months long at least, so the public sentiment may improve. But as of now it may be slightly too early," Saengkrai said.

He said the process could be extended — UNCLOS does not specify for how long — by mutual consent.

"We're talking about 12 to 18 months, so hopefully it will provide time to put the bad things that happened last year further in the rearview mirror," said Jones.

Edited by: Wesley Rahn