Abdullah Says Cabinet Approved Boundary Pact With Brunei

KUALA LUMPUR, April 30 (Bernama) -- Tun Abdullah Ahmad Badawi said he signed a land and sea boundary agreement with Brunei in March 2009 in which two overlapping offshore exploration fields came under Brunei after it was approved by the Malaysian Cabinet a month earlier.

In a statement on Friday, the former prime minister confirmed that Block L and Block M concessions now belonged to Brunei but the agreement provided that Malaysia would be allowed to participate in joint development of oil and gas on a commercial basis in the two areas for a period of 40 years.

"The financial and operational modalities for giving effect to this arrangement will be further discussed by the two sides. This means that in so far as the oil and gas resources are concerned, the agreement is not a loss for Malaysia," said Abdullah who had visited Bandar Seri Begawan for a two-day working visit on March 15 and 16 last year before he stepped down as prime minister two weeks later on April 3.

Abdullah was responding to questions raised by his predecessor, Tun Dr Mahathir Mohamad, who said Abdullah had surrendered the two blocks in negotiations with the Sultan of Brunei in exchange for Limbang which straddles the Sarawak-Brunei border.

Dr Mahathir said the loss of the two blocks cost Malaysia at least US$100 billion dollars (RM320 billion) from an estimated reserves of almost one billion barrels of oil.

Dr Mahathir also said Brunei had disclaimed that it had agreed to give up Limbang and Abdullah had made no mention of the two blocks when he announced that he had settled the Limbang claim.

Last week, United States-based Murphy Oil Corp said Malaysia's Petroliam Nasional Bhd (Petronas) had terminated the production sharing contracts for Blocks L and M as they "are no longer a part of Malaysia".

Abdullah, revealing details of the agreement for the first time, said he had signed the Exchange of Letters with the Sultan of Brunei on March 16 last year in specific steps to finally establish a permanent land and sea boundary between the two countries.

"In my capacity as the Prime Minister of Malaysia, I signed the Exchange of Letters with the Sultan of Brunei after the Malaysian Cabinet approved the deal on 11 February 2009," he said.

The two sides agreed to undertake a joint survey to demarcate the land boundary in two ways.

Firstly, the joint survey would confirm the ground boundary in five sectors which had already been established by previous agreements in 1920, 1931, 1933 (two separate agreements) and 1939.

Secondly, in the sectors where there were no agreements 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," Abdullah said.

On the maritime area, he said the two countries agreed to establish a final and permanent sea boundary.

"This agreement serves to settle certain overlapping claims which existed in the past which included the area of the concession blocks known before as Block L and Block M.

"Sovereign rights to the resources in this area now belongs to Brunei.

However, for this area the agreement includes a commercial arrangement under which Malaysia will be allowed to participate, on a commercial basis, to jointly develop the oil and gas resources in this area for a period of 40 years," he said.

Details of this would be further discussed and thus, in so far as oil and gas resources, the agreement was not a loss for Malaysia, he added.