Dear Colleagues
FYI
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Charles Gurdon
Menas Associates
T: +44-(0)1442-872-800
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Petronas Suspends Exploration Offshore Sarawak
Thursday, July 03, 2003
Petronas has suspended exploration and production operations in the
disputed Block L offshore Sarawak. The ongoing territorial dispute between
Malaysia and Brunei has caused other operators to also temporarily suspend
operations in the area. The disputed deepwater offshore site is part of an
exploration area both Malaysia and Brunei are trying to develop. "We will
not start work until the matter is resolved," Mohd Hassan Marican, Petronas
President and Chief Executive Officer said on the sidelines of the 21st
Asean Energy Ministerial Meeting in Langkawi, Malaysia. Petronas has
completed an initial survey of two blocks and drilled one well. The company
has stopped work to allow the two governments, Malaysia and Brunei, to sort
out the dispute.
A production sharing agreement for the block was awarded in 2002 by
the Brunei government and was signed in April by Total, BHP Billiton and
Amerada Hess. Block J is within the Exclusive Economic Zone claimed by
Brunei. The EEZ stretches 200 nautical miles out from Brunei's shore, in a
northwesterly direction. Block J also overlaps Block L, exploration rights
to which the Malaysian government has awarded to Murphy Oil and Petronas
Carigali. The two sites are located next to the oil-rich Kikeh Block, which
is already operated by Murphy Oil and Petronas and estimated to have
recoverable reserves of 400 million to 700 million barrels of crude.
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