Saturday May 1, 2010

Pak Lah refutes claims it was a deal with Brunei in ‘exchange’ for Limbang

PETALING JAYA: Former prime minister Tun Abdullah Ahmad Badawi has refuted claims by his predecessor that he signed away Malaysia’s rights to potential oil revenue in the South China Sea to Brunei.

Abdullah, who signed an Exchange of Letters with Sultan of Brunei Sultan Hassanal Bolkiah on Feb 16 last year, said the agreement allowed Malaysia to join in the exploration of petroleum resources from two areas known as Blocks L and M.

He said he signed the agreement after the Malaysian Cabinet approved the deal on Feb 11.

While the agreement stated that the sovereign rights of the resources in the two areas belonged to Brunei, he said it also included a commercial arrangement where Malaysia would be allowed to participate on a commercial basis to jointly develop the oil and gas resources in the area for 40 years.

“This means that in so far as the oil and gas resources are concerned, the agreement is not a loss for Malaysia,” he said in a statement yesterday.

Abdullah was responding to a blog posting by Tun Dr Mahathir Mohamad, entitled “Malaysia’s Generosity”, which asked why the two blocks no longer belonged to Malaysia.

Dr Mahathir said the two blocks had been claimed by Malaysia based on historical facts and Petronas had accordingly entered into a production sharing contract with US-based Murphy Oil to start drilling to produce oil.

He said the estimated reserves in the two blocks amounted to almost one billion barrels.

Dr Mahathir said Abdullah had negotiated with the Sultan to get back Limbang, which was claimed by Brunei but, in return, surrendered the two blocks to Brunei.

Dr Mahathir said Abdullah had also announced that the “Limbang Question” was settled but this was denied by Brunei the following day.

The blog was posted after a statement by Murphy Oil on April 21 saying its production sharing contracts covering Blocks L and M – which Brunei refers to as Blocks K and J respectively – awarded by Petronas Carigali Sdn Bhd in 2003 were formally terminated by a letter dated April 7 this year.

It said this was the result of Petronas informing it that the two blocks were no longer part of Malaysia.

On Brunei’s denial that the Limbang Question was settled, Abdullah said the two countries had agreed to undertake a joint survey to demarcate the agreed boundary.

He said firstly, the joint survey would confirm on the ground the boundary in five sectors which had already been established by previous agreements in 1920, 1931, 1933 (two agreements) and in 1930.

Secondly, he said in the other sectors where no land boundary agreement existed, the joint survey would determine the land boundary based on the watershed principle.

“When the entire boundary demarcation exercise is completed, there will be establised a final and permanent boundary between Sarawak on the Malaysian side and Brunei on the other side,” Abdullah added.

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