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Tuesday May 4, 2010

Ministry: Two oil-rich blocks claimed by Malaysia now Brunei’s

PETALING JAYA: Brunei has sovereignty over the two oil-rich petroleum blocks which Malaysia had earlier claimed ownership to according to international law, Malaysia’s Foreign Ministry said.

A statement issued by Wisma Putra said Brunei was entitled to exercise sovereign rights over the area under the UN Convention of the Law of the Sea (Unclos) 1982.

It said Malaysia acknowledged Brunei’s sovereign rights over the area in the Exchange of Letters signed by the two countries, undertaken by then Prime Minister Tun Abdullah Ahmad Badawi and the Sultan of Brunei Sultan Hassanal Bolkiah.

“Malaysia’s oil concession Blocks L and M, which coincided with Brunei’s Blocks J and K, are recognised under the Exchange of Letters as being situated within Brunei’s maritime areas and over which Brunei is entitled to exercise sovereign rights under Unclos,” it said yesterday.

The ministry said the Government terminated the production-sharing contracts over the two blocks to Petronas Carigali Sdn Bhd and Murphy Oil, which were awarded in 2003 as a result of the 2009 Letters of Exchange.

The letters also provided for the establishment of a commercial arrangement area for oil and gas, where Petronas may join in the exploitation of resources. The ministry said the 2009 Exchange of Letters was the culmination of 20 years of tough negotiations between the two countries.

It said the contents of the Exchange of Letters had been approved by the Malaysian Cabinet, and on which the state governments of Sabah and Sarawak had been briefed and consulted.

Besides solving the issue of the two countries’ overlapping claim over the stretch of the South China Sea and the establishment of the joint commercial arrangements to exploit oil and gas in the area, the 2009 agreement also provided for the final delimitation of maritime and land boundaries between Brunei and Malaysia.

The controversy over the two blocks arose after former prime minister Tun Dr Mahathir Mohamad, in a blog posting, asked why the two blocks no longer belonged to Malaysia.

He alleged that Abdullah had given away the blocks to Brunei in 2009 in exchange for Brunei dropping its claims on Limbang in Sarawak.

Abdullah, who refuted this, said in a statement that Malaysia and Brunei agreed to establish a final and permanent sea boundary in an exchange of letters on March 16, 2009.

He said while sovereign rights to the resources in the area now belonged to Brunei, the agreement included an arrangement under which Malaysia was allowed to participate commercially for a period of 40 years.

On the land boundary, both sides agreed to a joint survey to demarcate the agreed boundary, he said.

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