KUALA LUMPUR • Malaysia’s push to explore energy blocks off its coast has turned into a five-nation face-off involving American and Chinese warships, raising the risk of a direct confrontation as broader tensions mount between the world’s biggest economies.

The episode began in December, when Malaysia’s state-run energy giant Petroliam Nasional, or Petronas, contracted a vessel to explore two areas in the South China Sea in its extended continental shelf. Those waters are also claimed by Vietnam and China, which immediately sent ships to shadow the vessel.

The situation took a turn for the worse on April 16 with the arrival of a Chinese survey ship known as the Haiyang Dizhi 8, which last year was engaged in a stand-off with Vietnam over offshore energy blocks.

The United States this week sent at least two warships within some 50 nautical miles of the Malaysian ship, according to defence analysts privy to the information but who asked not to be identified.

US Secretary of State Mike Pompeo on Thursday accused China of “exploiting” the world’s focus on the Covid-19 pandemic with provocations in the South China Sea.

In a statement issued on the same day he held a video call with 10 South-east Asian foreign ministers, he said China “dispatched a flotilla that included an energy survey vessel for the sole purpose of intimidating other claimants from engaging in offshore hydrocarbon development”.

“The US strongly opposes China’s bullying and we hope other nations will hold them to account too,” Mr Pompeo said.

The US says it does not take a position on territorial disputes in the region even while staking a national interest in freedom of navigation, which involves challenging any claims that are not consistent with international laws.

As China gets more assertive in enforcing its claims, it has increased the risk of a potential confrontation with the US that could quickly escalate.

The US Indo-Pacific Command confirmed on Wednesday that three ships – the USS America, an amphibious assault ship; the USS Bunker Hill, a guided missile cruiser; and the USS Barry, a guided missile destroyer – were operating in the South China Sea, without giving precise locations. They were joined by an Australian Anzac-class frigate on April 18, according to the US Seventh Fleet.

“Growing animosity between the two sides would make it difficult to prevent an accidental collision from becoming a full-blown crisis,” risk consultancy Eurasia Group said in an analysis on Wednesday.

China has disrupted the efforts of Vietnam, the Philippines – and increasingly Malaysia – to exploit oil, gas and fishing resources off their shores. China claims about 80 per cent of the South China Sea.

This is “by far the biggest and most overt challenge yet to Malaysia’s South China Sea energy interests”, said Dr Collin Koh Swee Lean, research fellow at Singapore’s S. Rajaratnam School of International Studies.

Malaysia sought to tamp down tensions on Thursday, with Minister for Foreign Affairs Hishammuddin Hussein calling for all parties to work together to maintain peace.

“We must avoid unintended, accidental incidents in these waters,” he said.

Chinese foreign ministry spokesman Geng Shuang this week said its survey ship was “conducting normal activities in waters under Chinese jurisdiction” and called the situation “basically stable”.

Mr Greg Poling, director of the Asia Maritime Transparency Initiative in Washington, said China last year took similar actions against Petronas and Royal Dutch Shell in Malaysian waters as they conducted at least two other surveys of the continental shelf.

That was similar to China’s actions against Vietnam, when it repeatedly sent coast guard ships and the Haiyang Dizhi 8 to an energy block operated by Russia’s state-owned Rosneft Oil.

“But this is more problematic because it has become so public, and because Petronas has invested so much time and expense in exploring fields this far out,” Mr Poling said by e-mail. “I have no idea whether they’re likely to be commercially viable, but I do know that there’s no chance of Petronas actually producing hydrocarbons from them in the current environment.”

BLOOMBERG

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