Brunei, Malaysia to share revenues from disputed oil blocks

Malaysia’s Foreign Minister Datuk Seri Anifah Aman acknowledged that neighboring Brunei owns two formerly disputed oil blocks, but that Malaysia will have a share of revenue produced from them.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, June 9 -- Malaysia’s Foreign Minister Datuk Seri Anifah Aman acknowledged that neighboring Brunei owns two formerly disputed oil blocks, but that Malaysia will have a share of revenue produced from them.

Aman said the revenue-sharing was made possible through a commercial arrangement agreed to in March by leaders of the two countries, but that the two sides are still discussing the ratio of the revenues to be shared.

“If we look strictly at the interpretation of the law based on [United Nations Convention on the Law of the Sea] 1982, it clearly belongs to Brunei,” said Aman in response to a question by opposition leader Datuk Seri Anwar Ibrahim.

Anwar had asked Aman to state the validity of the decision of the federal government to hand over Blocks L and M to Brunei, and why the issue of sovereignty of territorial waters of that area was not referred to the Malaysian parliament.

Earlier this year, Murphy Oil Corp.’s interests in Blocks L and M off Malaysia were terminated after resolution of a dispute with Brunei over control of the assets.

That agreement ended a dispute that erupted in 2003 when Petronas and Murphy were awarded two offshore leases, SB L and SB M. The blocks overlapped with Brunei's Blocks J and K, which had been awarded to Total SA and Royal Dutch Shell PLC (OGJ Online, Apr. 22, 2010).

Contact Eric Watkins at hippalus@yahoo.com.

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