On October 6, the Indonesian air force held a major exercise around the Natuna Islands in the South China Sea, where Indonesia has massive oil and gas claims and rich fisheries and where Chinese vessels have increasingly encroached into Indonesian waters. China, although recognizing Indonesia’s rights to the Natuna Islands, has failed to respect the country’s Exclusive Economic Zone (EEZ) that such rights should convey and, instead, claims that the waters surrounding the area fall within China’s so-called nine-dash line. The military drill involved thousands of personnel as well as F‑16, Sukhoi and Hercules aircraft.
While asserting that the exercises were to enhance preparedness for a future conflict scenario, Indonesian officials simultaneously sought to diffuse tensions with China by reiterating that they had no plans to conduct joint exercises with other countries and had no legal disputes over territory. Nevertheless, Chinese fishing and coastguard vessels have had repeated confrontations with Indonesian patrol boats and navy vessels. For its part, Indonesia has stated its intention to deploy extra warships, fighter jets and surface-to-air missiles to defend its EEZ.
This display of power stands in stark contrast to the intensive efforts of the two countries to do more business with one another, including a significant effort by President Widodo to attract Chinese investment for his administration’s ambitious transportation infrastructure development agenda. Despite this push, other policies have had a more estranging effect, notably Widodo’s “Global Maritime Axis,” which is designed to enhance the country’s maritime security in the defense of Indonesia’s national assets.
With regard to the Natuna Islands in particular, they could yield up to $253 billion per year from fishing, crude oil and natural gas, if fully developed. The Natunas have an estimated 1.27 trillion cubic meters of recoverable gas, making up some 40% of Indonesia’s total reserves. These statistics could serve as the ingredients of future conflict. The most lucrative asset in the Natuna Islands, the East Natuna gas field (formerly the NatunaD-Alpha block), is estimated to have around 46 trillion cubic feet in reserves and is the largest natural gas field in Asia. The gas field, however, reportedly requires advanced technology and a large investment of some $20 billion to $40 billion to develop, making the project commercially unattractive in today’s environment.