Positioning: Embarassments... part deux

Kikeh, Limbang, and Blocks J & K

1.       I actually have a lot of time for Brunei, as an oil-rich sultanate, which historically had gifted Sarawak to Malaysia, and sold Sabah to people, who later brought the state into Malaysia. Furthermore, they are a mulsim country, and given the right leaders who could develop the country and not be too embroiled in the next Rolls Royce and the next superhot model, could in the future be a friendly party and a powerful ally. But not in the present.

2.       So, when news broke of Pak Lah announcing Brunei does not dispute Limbang as Malaysia’s territory it came as a surprise as the dispute is not that well-known compared to the noisy neighbour’s claim of Batu Putih. And when it emerged that the price of dropping the claim is Block J & K, we need to stand up and ask the nature of the decision. And, when this decision was only ratified in the Cabinet “THIS YEAR”, and not through Parliament, then we have a national scale embarrassment and a major goof-up.

3.       Kikeh, located in southern Block K just next door is a major find, and rightfully ones Malaysia needs to be proud of given that it’s the first deepwater oil exploration. It’s Malaysia’s largest known oil reserves. If Block J&K which has just been signed away has anything similar, and the 26m peoples of Malaysia are now sharing a portion of this find with Brunei’s population of 0.3m, then we have had some lame duck for a PM. Stand your ground, and just give our friends in Brunei a modern equivalent of a bunga emas… but not selling the whole bloody family jewels

==================================================================

Foreign Source: Business Times (Singapore)

Pauline Ng In Kuala Lumpur 

Image : 

Date Published : 04 May 2010

But foreign ministry doesn't clarify issue of rights to waters outside the blocks

MALAYSIA'S Foreign Affairs Ministry (Wisma Putra) has affirmed the country's recognition of two previously disputed oil blocks as within Brunei's maritime areas under Exchange of Letters between former prime minister Abdullah Ahmad Badawi and Brunei's Sultan Hassanal Bolkiah last year.

The Exchange of Letters between both leaders on March 16, 2009 represents an agreement which has settled various outstanding issues between both countries, Wisma Putra said in a statement yesterday.

It stated the 'key elements' to the Letters as: the final delimitation of maritime boundaries between Malaysia and Brunei; the establishment of a Commercial Arrangement Area (CAA) for oil and gas; the modalities for the final demarcation of the land boundary between Malaysia and Brunei; and unsuspendable rights of maritime access for nationals and residents of Malaysia across Brunei's maritime zones.

With regard to the maritime areas, Wisma Putra said the Letters established the final delimitation of territorial sea, continental shelf and exclusive economic zone of both states, but did not provide specifics.

However, it said Malaysia's oil concession Blocks L and M, which coincided with Brunei's Blocks J and K, 'are recognised under the Exchange of Letters as being situated within Brunei's maritime areas, over which Brunei is entitled to exercise sovereign rights under the relevant provisions of the United Nations Convention on the Law of the Sea 1982'.

It further stated that the contents of the Letters were approved by the Malaysian Cabinet on Feb 11 this year and that the state governments of Sabah and Sarawak had been consulted and fully briefed.

Moreover, it noted that the establishment of the CAA incorporating these blocks would provide for revenue sharing from the exploitation of oil and gas between Malaysia and Brunei. It did not provide a time frame, but Mr Abdullah had previously stated the two blocks would be jointly developed for a period of 40 years.

Wisma Putra's statement notwithstanding, a number of matters remain unclear.

For one, the issue of rights to waters outside blocks L and M have not been clarified. Another is sovereignty over Limbang, the area between the two parts of Brunei.

Did Malaysia surrender its sovereignty over Limbang in order to jointly develop the two oil blocks, asked Opposition leader Lim Kit Siang?

Wisma Putra made no mention of Limbang in its statement, but following the signing of the Letters of Exchange in Bandar Seri Begawan, Mr Abdullah who stepped down as prime minister the following month had told reporters: 'Brunei has decided to drop the Limbang issue and, as a result, Limbang is part of Malaysian territory.'

Even so, political observers noted that Sultan Hassanal has not made any official comments on whether Brunei would forsake its claim on Limbang.

Few had considered the Exchange of Letters until last week when Murphy Oil announced its production-sharing contracts with national oil company Petronas covering blocks L and M had been terminated as they were no longer Malaysian territory.

Mr Abdullah's predecessor and his harshest detractor Mahathir Mohamad then accused him of signing away oil-rich territory and giving up US$100 billion in oil revenue.

Wisma Putra said the termination of the production-sharing contracts was in accordance with the establishment of the CAA, and that the Exchange of Letters had resolved the outstanding bilateral issues between both countries.

Because the waters off East Malaysia contain significant oil reserves and the country is heavily reliant on oil revenue, the matter is unlikely to fade away soon.