Border dispute hinders Total's work

  • Business
  • Tuesday, 17 Jun 2003

By Hong Boon How

EUROPEAN oil and gas group Total is hopeful that the Malaysian and the Bruneian governments will be able to settle quickly their border dispute concerning the offshore K and J blocks in the South China Sea. 

Total chairman and chief executive officer Thierry Desmarest said both countries had overlapping claims on the blocks and that the dispute had hindered the French group's oil and gas exploration activities in the area. 

Thierry Desmarest

“Our exploration in Block J has been suspended since a few weeks ago and we hope that both countries could arrive at a solution soon,” Desmarest told a press conference at the 8th Annual Asia Oil and Gas Conference in Kuala Lumpur yesterday. 

The disputed area, which Brunei claimed as its own Exclusive Economic Zone, is believed to span about 10,000 sq km and represents about half of the Sultanate's entire offshore territory. 

Petroliam Nasional Bhd (Petronas) and Murphy Oil's success with drilling in an adjacent block is expected to increase both countries' claim on the disputed area. 

According to Borneo Bulletin, a drilling team from Total was chased off Block J by the Malaysian navy in March. The newspaper also reported that a Royal Brunei naval vessel also showed up at the scene. 

Desmarest said Total had participated in the discussion and bidding for the offshore exploration with the Brunei government under international practices. 

“We were granted the deepwater block without any comment from anyone and were surprised to see the area being contested for by another country later on,” he said. 

Total executive vice president Christophe de Margerie said the company was keen to participate in the upstream oil and gas business in Malaysia but was facing difficulty in establishing a strong presence. 

“However, the company has entered into an agreement with Petronas and Amerada Hess to explore an offshore petroleum block in Sarawak,” he said. 

The company, he added, was expected to make a discovery in the block by the end of the year. 

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