Colleagues
I thought the article below from today's issue of Rigzone
might interest you
Best wishes - Charles
Charles Gurdon
Menas Associates
T: +44-(0)1442-872-800
www.menas.co.uk
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Malaysia & Brunei in Maritime Dispute
Monday, June 09, 2003
TotalFinaElf has halted exploration operations offshore the island of
Borneo because of a territorial dispute between Malaysia and Brunei over
potentially huge oil reserves. Industry sources said the dispute has
escalated and a Malaysian patrol boat recently chased an exploration vessel
away from the area, offshore exploration Block J. The Government of Brunei
signed a production sharing contract with TotalFinaElf, BHP Billiton and
Amerada Hess for Block J which is within the Exclusive Economic Zone claimed
by Brunei. The EEZ stretches 200 nautical miles out from Brunei's shore, in
a northwesterly direction.
The Malaysian and Brunei governments have opted to keep quiet about
the territorial dispute because negotiations between them on the sovereignty
issue are ongoing. In December, Malaysia won an International Court of
Arbitration ruling over Indonesia on the ownership of Sipidan and Ligitan
islands off Sabah, on the other side of Borneo island from the area it
disputes with Brunei. Malaysia and Singapore are also currently in legal
wrangles over the sovereignty of the tiny Pedra Blanca island, northeast of
Singapore.
On the Malaysian front, oil exploration work in the overlapping Block
L in the area is still going ahead. Petronas Carigali has started drilling
and carrying out seismic studies in Block L, and in the disputed area. The
whole area is considered promising, in terms of proven or expected reserves.
Lying adjacent to Block L lies is another site, Block K, which is operated
by Murphy Oil and Carigali, which has estimated recoverable reserves of 400
to 700 million bbl of crude. In January, the Malaysian government signed a
production sharing contract with Murphy Oil and Petronas Caligari for the
exploration of that block, with Murphy Oil holding a 60% stake.
The ongoing dispute between Malaysia and Brunei is expected to be a
long drawn out affair, with no quick solution in the horizon, industry
sources said. Due to the complicated nature of the situation a resolution
will not be quick. Although no official meetings have been set up to settle
this matter, the governments of both countries will have the opportunity to
discuss the dispute during the upcoming Asia Oil and Gas conference in Kuala
Lumpur in June 15-17 as well as at a meeting of Asean energy ministers in
Langkawi, Malaysia, in the first week of July. The dispute may have to be
sorted out in an international court if both governments fail to come to an
agreement
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