Kuala lumpur (mt) - Under a "commercial" agreement with Brunei, Malaysia can now jointly develop oil and gas resources in two areas previously under dispute by both countries.
Although sovereign rights to the resources in what was known as Block L and Block M now belong to Brunei, Malaysia will be allowed to participate on a commercial basis for 40 years, said former prime minister Tun Abdullah Ahmad Badawi.
The terms were set in an agreement signed March 16, 2009 via an Exchange of Letters between (His Majesty) the Sultan of Brunei and himself in his capacity as prime minister, after the cabinet approved the deal on Feb 11, last year.
"This means that the agreement was not a loss for the country as far as the oil and gas resources are concerned."
He added that the financial and operational modalities for giving effect to the arrangement would be further discussed by the two sides.
Abdullah was responding to questions raised by his predecessor, Tun Dr Mahathir Mohamad, who said Abdullah had surrendered the two blocks in negotiations with (His Majesty) the Sultan of Brunei in exchange for Limbang, which straddles the Sarawak-Brunei border.
Dr Mahathir claimed no Petronas representatives were present during the meeting except for foreign office staff and the foreign affairs adviser to the prime minister.
Dr Mahathir added that the loss of the two blocks cost Malaysia at least US$100 billion (RM320 billion) from estimated reserves of almost one billion barrels of oil.
Dr Mahathir also claimed that the two exploration blocks were no longer a part of Malaysia. However, he did not cite the sources for his information about the meeting between Abdullah and the Sultan of Brunei. "Can Wisma Putra please explain why it did not stop Abdullah?" Dr Mahathir was quoted as saying.
Abdullah said both countries agreed to establish a final and permanent sea boundary and the agreement served to settle certain overlapping claims which existed in the past, including the area of the concession blocks.
Abdullah also said the Exchange of Letters also represented an agreement between the two countries to take certain specific steps which will finally establish a permanent land and sea boundary.
"Regarding the land boundary, both sides agreed to undertake a joint survey to demarcate the agreed boundary which shall be final and permanent.
"This work shall be carried out in two ways.
"First, the joint survey will confirm on the ground, the boundary in five sectors which had already been established by previous agreements in 1920, 1931, 1933 (two separate agreements) and 1939," he said in a statement.
Second, in other sectors where no land boundary agreements exist as yet, the joint survey shall determine the land boundary on the basis of the watershed principle.
"When the entire land boundary demarcation exercise is completed, there will be established a final and permanent boundary between Sarawak on the Malaysian side and Brunei on the other side.
When this is accomplished, there will no longer be any land boundary dispute between Brunei and Malaysia as a whole. This long standing issue, which had existed in the past as an irritant in the relations between Malaysia and Brunei, will be settled without any disadvantage for Malaysia." -- Courtesy of Borneo Bulletin
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