Practice on Provisional Arrangements in maritime Disputed Areas, JOINT DEVELOPMENT ZONES, Malaysia-Vietnam case

Background
In the Gulf of Thailand, Vietnam and Malaysia lie opposite to each other
and have overlapping claims on the continental shelf. Vietnam wanted the
area to be delimited by an equidistant line between the coasts of the mainland
of the two countries, ignoring the Malaysian island of Redang and the
Vietnamese island of Hon Khoai altogether. The Malaysian claim on the
continental shelf made in 1979, however, was based upon an equidistant
line constructed between the Vietnamese mainland and Malaysian Islands.
Method of Shaping the Joint Development Zone
The joint development, the so-called “Defined Area”, is a long sword-shape.
In shaping the Defined Area the overlapping claims of both countries have
been accommodated. Points A and F are based on Malaysia’s claim. They
are equidistant points constructed by giving full weight to Malaysian island
of Redang while disregarding Vietnamese offshore islands. Point E is the
terminal point of the 1969 Indonesia-Malaysia continental shelf boundary.
It is the equidistant point from Indonesia, Malaysia and Vietnam constructed
by taking account of all the offshore features in the area. Points C and D
are derived from Vietnamese claims. These are equidistant points between
the mainland of the two countries.

Forms and Provisions
Malaysia and Vietnam concluded a Memorandum of Understanding for the
exploration and exploitation of petroleum in the Gulf of Thailand in 1992. In the Memorandum, they noted that “it is in the best interests of both countries, pending delimitation of their continental shelves located off the northeast
coast of West Malaysia and off the south-west coast of Vietnam, to
enter into an interim arrangement for the purpose of exploring and exploiting
petroleum in the seabed in the overlapping area”. The Memorandum
of Understanding has a “without prejudice” clause in Article 4. It provides
that, “Nothing in this Memorandum of Understanding shall be interpreted
so as to in any way prejudice the position and claim of either party in the
relation to and over the Defined Area”. The Memorandum of Understanding
shall come into force on a date to be specified by an exchange of diplomatic
Notes and shall continue to be in force for a period to be specified
by an exchange of Diplomatic Notes between the two parties.
Operational Mechanism and the Effectiveness of the Arrangement
Under the arrangement, all costs incurred and benefits derived from exploration
within the Defined Area are to be shared equally by the Parties. In
the event that a petroleum field is found in the Defined Area or partly outside
the Defined Area, the Parties should seek to agree upon terms for the
exploration and exploitation of the field.