Exclusive-China protested Indonesian drilling, military exercises By

By Tom Allard, Kate Lamb and Agustinus Beo Da Costa

SYDNEY/JAKARTA (Reuters) – China told Indonesia to stop drilling for oil and in maritime territory that both countries regard as their own during a months-long standoff in the South China Sea earlier this year, four people familiar with the matter told Reuters.

The unprecedented demand, which has not previously been reported, elevated tensions over natural resources between the two countries in a volatile area of global strategic and economic importance.

One letter from Chinese diplomats to Indonesia’s foreign ministry clearly told Indonesia to halt drilling at a temporary offshore rig because it was taking place in Chinese territory, according to Muhammad Farhan, an Indonesian lawmaker on parliament’s national security committee, which was briefed on the letter.

“Our reply was very firm, that we are not going to stop the drilling because it is our sovereign right,” Farhan told Reuters.

A spokesman for Indonesia’s foreign ministry said: “Any diplomatic communication between states is private in nature and its content cannot be shared.” He declined further comment.

China’s foreign ministry, defence ministry and embassy in Indonesia’s capital Jakarta did not immediately respond to requests for comment.

Three other people, who said they were briefed on the matter, confirmed the existence of the letter. Two of those people said China made repeated demands that Indonesia stop drilling.

Southeast Asia’s biggest nation says the southern end of the South China Sea is its exclusive economic zone under the United Nations Convention on the Law of the Sea and named the area as the North Natuna Sea in 2017.

China objected to the name change and insists the waterway is within its expansive territorial claim in the South China Sea that it marks with a U-shaped “nine-dash line,” a boundary found to have no legal basis by the Permanent Court of Arbitration in the Hague in 2016.

“It (the letter) was a bit threatening because it was the first effort of China’s diplomats to push their nine-dash line agenda against our rights under the Law of the Sea,” Farhan told Reuters.

China is Indonesia’s biggest trade partner and second-largest source of investment, making it a key part of Indonesia’s ambition to become a top-tier economy. Indonesian leaders kept quiet about the matter in order to avoid conflict or a diplomatic spat with China, Farhan and two of the other people who spoke to Reuters said.

Farhan said that China, in a separate letter, also protested against the predominantly land-based Garuda Shield military exercises in August, which took place during the standoff.

The exercises, involving 4,500 troops from the United States and…