Malaysia and Brunei talk over rival oil claims
Malaysia and Brunei talk over rival oil claims
Reuters, Kuala Lumpur
Malaysia and Brunei are in talks to settle a row over the
ownership of oil-rich waters that both covet in the South China
Sea.
"There is still a question we are sorting out on the offshore
dispute," Malaysian Foreign Minister Syed Hamid Albar told
Reuters. "We're working on it."
Malaysia's overlapping claim on Brunei's exclusive economic
zone (EEZ), which stretches 200 km (124 miles) offshore, has sent
shudders through the tiny sultanate's hierarchy.
It was depending on the untapped deep water oil fields to
guarantee the next generation's prosperity, after the Asian
financial crisis and bad investments depleted national coffers.
Brunei now produces about 200,000 barrels per day (bpd) of
crude and 1.1 billion cubic feet a day of gas -- most of it from
onshore.
Late in 2000, Brunei said it would offer exploration blocks
after declaring an EEZ, giving it rights to fishing grounds and
mineral extraction from the sea bed.
But last month, Malaysia forcefully reminded Brunei, wedged
between Malaysian territory on Borneo island, of its claim by
sending its navy to chase off a drilling team from TotalFinaElf.
The incident, according to sources in Brunei, precipitated an
urgent meeting between Sultan Hassanal Bolkiah and Malaysian
Prime Minister Mahathir Mohamad last month.
Both governments are keen to keep the dispute under wraps, and
Brunei, with 330,000 people and no army, can ill afford to
antagonize its neighbor.
There have been suggestions they could come to a sharing
agreement, but Syed Hamid was poker-faced.
"We are looking at various mechanisms," he said, when asked
late on Thursday.
Malaysia, which has had territorial disputes with all its
neighbors, argues Brunei only has jurisdiction over its
continental shelf, in water up to 200 meters deep. About three
quarters of the EEZ is in deeper water.
Total, which heads a consortium that won exploration rights
from Brunei Petroleum, has been left kicking its heels and the
French company has canceled supply vessel contracts, industry
sources said.
But Murphy Oil, which won exploration rights from Malaysia's
state-oil company Petroliam Nasional Bhd (Petronas), carried on
drilling.
On Monday, Murphy said it had finished in deepwater Block L,
and a rig was being moved to an adjoining block in the Kikeh
field, where it announced a substantial find late last year.
Royal Dutch/Shell has been negotiating a production sharing
agreement with Brunei Petroleum for a block adjoining Total's,
which closely corresponds to that of another block awarded to
Murphy by Malaysia, and will be watching developments carefully.