Ambalat oil found by Eni last year, KL sticks to its claim
Ambalat oil found by Eni last year, KL sticks to its claim
Agencies, Jakarta/Kuala Lumpur
The Indonesian government said that Eni SpA, Europe's fourth- biggest oil producer, struck oil in the Ambalat offshore oil field in the Sulawesi Sea, prompting the biggest military standoff between the two countries in more than four decades.
Indonesia's Oil and Gas Regulatory Implementing Body (BP Migas) deputy of operations, Trijana Kartoatmodjo, said Eni and partner Unocal Corp. found oil and gas in two wells late last year.
"The discoveries are encouraging," he was quoted by Bloomberg as saying in Jakarta, declining to give an estimate of the amount of oil and gas in the area. "Eni plans to start drilling this year to get an exact estimate of the reserves."
BP Migas had earlier estimated that the oil deposits in Ambalat could range from 100 million barrels to one billion barrels.
Indonesia awarded the concession to exploit the Ambalat block, located adjacent to the disputed East Ambalat block, to Royal Dutch/Shell on Sept. 27. But the firm later sold it to Eni on Oct. 4, 2001. Eni owns a 55 percent share of the drilling venture while Unocal has the rest.
The dispute between the two biggest oil and gas producers in Southeast Asia became heated after Malaysia's state oil company, Petronas, awarded Shell the concession to exploit the East Ambalat block in February this year.
Indonesia -- which awarded a similar contract on the area to Unocal on Dec. 12, 2004 -- claimed the concession given by Malaysia resulting in overlapping between drilling areas in Ambalat and East Ambalat.
Malaysia disputed Indonesia's claim, saying it has sovereign rights and jurisdiction in the areas under a 1982 United Nations convention.
Indonesia's House of Representatives is scheduled to summon executives from Shell and Petronas to clarify the issue and check whether Shell used government data to bid for the East Ambalat oil block.
In Kuala Lumpur, Malaysia is prepared to defend its rights when it holds talks next week with Indonesia over the disputed area, Foreign Minister Syed Hamid Albar said.
The Malaysian delegation to the meeting had gathered all the facts to support its position, he was quoted as saying by the Bernama news agency.
Indonesia stationed seven warships in the area following the discovery, while Malaysia sent its navy and military planes. Both governments have said they are seeking a peaceful resolution to the dispute.
The two governments agreed last week to hold talks in Jakarta on Tuesday to end the tense stand-off.
Syed Hamid said the Malaysian team would include foreign ministry officials, legal officers and officials from maritime agencies.
"There will be many more meetings until both parties are able to agree through diplomatic means," he added.