M'sia, RI in territorial dispute over oil: Report

M'sia, RI in territorial dispute over oil: Report

Agence France-Presse, Kuala Lumpur

Malaysian national oil and gas company Petronas' plan to
develop two new oil and gas blocks off Borneo Island may be in
jeopardy due to overlapping claims by neighboring Indonesia, a
report said Wednesday.

The New Straits Times newspaper said Indonesian national oil
company Pertamina is planning to award exploration contracts at
the end of the month for an area that falls within the two
blocks.

A few months ago, Petronas called for a major international
oil and gas companies to bid for Block ND6 and Block ND7 located
some 150 kilometers (94 miles) off Tawau in the eastern Sabah
state.

Petronas plans to award production sharing contracts in the
deep waters of the Sulawesi Sea before the end of the year, it
said.

The "intrusion" of Indonesia was worrying, the newspaper cited
an oil and gas industry source as saying, since it could disrupt
Petronas plans.

"The matter will have to be resolved between the governments
of the two countries," he added.

Indonesia has began negotiations with several companies this
month for a direct tender for exploration works in what is known
as the East Ambalat block and awards are expected to be made
soon.

Seismic studies have indicated potentially significant gas
reserves, arousing the interest of oil companies, the newspaper
said.

Malaysia is also engaged in a territorial dispute with Brunei
that has halted oil exploration work for months involving two
huge offshore blocks. But officials recently said they are moving
closer to resolving it.

Brunei, a tiny enclave surrounded by Malaysia's Sarawak state
on Borneo island, is the fourth largest producer of natural gas
in the world and third largest oil producer in Southeast Asia
after Indonesia and Malaysia.

The contested area represents about half of Brunei's entire
offshore territory and is vital to its plans to diversify its
oil-dependent economy.