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<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published May 1, 2010
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Malaysia gave up oil blocks to Brunei, says Mahathir
Abdullah Badawi caused country to lose at least US$100b of oil, he says
By S JAYASANKARAN
IN KUALA LUMPUR
FORMER Malaysian prime minister Mahathir Mohamad has dropped a bombshell claiming that the country had lost territorial waters sitting on one billion barrels of oil equivalent to Brunei during the tenure of his successor Abdullah Ahmad Badawi.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>DR MAHATHIR
'It would seem that the loss of a huge oil-producing area - that is okay'</TD></TR></TBODY></TABLE>In a late Thursday post on his blog titled 'Malaysia's Generosity', Dr Mahathir said he had read in the newspapers that a substantial oil-producing offshore area in the South China Sea, namely Block L and Block M, 'were no longer a part of Malaysia'.
Last week, US-based Murphy Oil, which had entered into a production-sharing contract with national oil company Petronas to prospect the two blocks offshore Limbang in Sarawak announced that it was ceasing operations because it had been told the two blocks were 'no longer part of Malaysia'.
'It would seem that the loss of a huge oil-producing area - that is okay,' wrote Dr Mahathir.
Ironically, the opposition's Lim Kit Siang has also echoed the former premier's views, insisting on an explanation from the government.
Dr Mahathir is not only the current Petronas adviser but was also premier when the territorial dispute began in July 2002, when Murphy struck oil in 1,340 metres of water 150 kilometres off Sabah.
The field, Kikeh, had an estimated recoverable reserve of up to 700 million barrels, or 21 per cent of Malaysia's then oil reserves.
The find triggered interest in the deep-water prospects of the South China Sea and probably sparked the dispute between the two countries.
Soon after, Malaysia and Brunei hired prospectors to explore the two nearby blocks. The sultanate awarded one block to a consortium led by French major Total in 2003. Meanwhile, Petronas awarded both blocks to a subsidiary and to Murphy Oil.
In 2000, Brunei claimed sovereignty over the blocks as part of an 'exclusive economic zone' (EEZ), which stretches 200 nautical miles from its coastline. Malaysia had long claimed the same area as part of its own EEZ. But it wasn't a problem until Kikeh.
It got worse. According to the Far Eastern Economic Review July 2003 issue, Brunei sent in a gunboat in March 2003 to drive away a Murphy drilling ship in the area. In April, the Malaysian navy sent several gunboats into the disputed area to block the arrival of a Total ship. After a tense stand-off involving a single patrol craft from Brunei, Total backed off and both sides stopped work in the disputed areas.
For Dr Mahathir, there seemed to be no question of ownership. 'Block L and Block M had been claimed by Malaysia based on historical facts,' he wrote in his blog. 'Accordingly, Petronas entered into a production-sharing contract with Murphy Oil to start drilling to produce oil. It is estimated that the reserves amounted to almost one billion barrels.' It isn't clear if his estimate is right but oil industry sources told BT that it was 'possible'.
What's clear is that Mr Abdullah attempted to sort things out before he retired. 'Abdullah Badawi negotiated with the Sultan (in 2009) to get back Limbang in Sarawak,' said Dr Mahathir. 'In return he agreed to surrender the two blocks to Brunei.'
Limbang shares a border with Brunei and has long been claimed by the sultanate although for all intents and purposes, it has been part of Malaysia.
Dr Mahathir claimed that 'no Petronas representatives were present at the meeting - only foreign office staff and the foreign affairs adviser to the PM'.
'As we all know, Abdullah triumphantly announced that he had settled the Limbang claim with Brunei,' Dr Mahathir said, but 'no mention was made of the two blocks'.
Subsequently, however, Brunei denied that Limbang had been settled. 'The foreign office and Abdullah did not rebut Brunei's statement,' wrote Dr Mahathir.
'Now it is made clear that the two blocks are no longer a part of Malaysia,' said the former premier. 'Abdullah has caused Malaysia to lose at least US$100 billion of Malaysia's oil in this agreement. Can Wisma Putra please explain why it did not stop Abdullah?'
At press time, however, Mr Abdullah issued a rebuttal. He said that the discussions had revolved around establishing, once and for all, a boundary between the two countries. On the land side, a demarcation exercise would be carried out that, once completed, would establish a 'final and permanent' boundary between Sarawak and Brunei that would remove all previous 'irritants' (read Limbang) without 'any disadvantage to Malaysia'.
On the water side, Mr Abdullah conceded that the two blocks now belonged to Brunei but the agreement contained a clause that Malaysia would jointly develop the oil resources of the area for 'a period of 40 years'. This means, Mr Abdullah concluded, that as far as the oil and gas resources of the area are concerned, the agreement 'is not a loss for Malaysia'.
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Malaysia gave up oil blocks to Brunei, says Mahathir
Abdullah Badawi caused country to lose at least US$100b of oil, he says
By S JAYASANKARAN
IN KUALA LUMPUR
FORMER Malaysian prime minister Mahathir Mohamad has dropped a bombshell claiming that the country had lost territorial waters sitting on one billion barrels of oil equivalent to Brunei during the tenure of his successor Abdullah Ahmad Badawi.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>DR MAHATHIR'It would seem that the loss of a huge oil-producing area - that is okay'</TD></TR></TBODY></TABLE>In a late Thursday post on his blog titled 'Malaysia's Generosity', Dr Mahathir said he had read in the newspapers that a substantial oil-producing offshore area in the South China Sea, namely Block L and Block M, 'were no longer a part of Malaysia'.
Last week, US-based Murphy Oil, which had entered into a production-sharing contract with national oil company Petronas to prospect the two blocks offshore Limbang in Sarawak announced that it was ceasing operations because it had been told the two blocks were 'no longer part of Malaysia'.
'It would seem that the loss of a huge oil-producing area - that is okay,' wrote Dr Mahathir.
Ironically, the opposition's Lim Kit Siang has also echoed the former premier's views, insisting on an explanation from the government.
Dr Mahathir is not only the current Petronas adviser but was also premier when the territorial dispute began in July 2002, when Murphy struck oil in 1,340 metres of water 150 kilometres off Sabah.
The field, Kikeh, had an estimated recoverable reserve of up to 700 million barrels, or 21 per cent of Malaysia's then oil reserves.
The find triggered interest in the deep-water prospects of the South China Sea and probably sparked the dispute between the two countries.
Soon after, Malaysia and Brunei hired prospectors to explore the two nearby blocks. The sultanate awarded one block to a consortium led by French major Total in 2003. Meanwhile, Petronas awarded both blocks to a subsidiary and to Murphy Oil.
In 2000, Brunei claimed sovereignty over the blocks as part of an 'exclusive economic zone' (EEZ), which stretches 200 nautical miles from its coastline. Malaysia had long claimed the same area as part of its own EEZ. But it wasn't a problem until Kikeh.
It got worse. According to the Far Eastern Economic Review July 2003 issue, Brunei sent in a gunboat in March 2003 to drive away a Murphy drilling ship in the area. In April, the Malaysian navy sent several gunboats into the disputed area to block the arrival of a Total ship. After a tense stand-off involving a single patrol craft from Brunei, Total backed off and both sides stopped work in the disputed areas.
For Dr Mahathir, there seemed to be no question of ownership. 'Block L and Block M had been claimed by Malaysia based on historical facts,' he wrote in his blog. 'Accordingly, Petronas entered into a production-sharing contract with Murphy Oil to start drilling to produce oil. It is estimated that the reserves amounted to almost one billion barrels.' It isn't clear if his estimate is right but oil industry sources told BT that it was 'possible'.
What's clear is that Mr Abdullah attempted to sort things out before he retired. 'Abdullah Badawi negotiated with the Sultan (in 2009) to get back Limbang in Sarawak,' said Dr Mahathir. 'In return he agreed to surrender the two blocks to Brunei.'
Limbang shares a border with Brunei and has long been claimed by the sultanate although for all intents and purposes, it has been part of Malaysia.
Dr Mahathir claimed that 'no Petronas representatives were present at the meeting - only foreign office staff and the foreign affairs adviser to the PM'.
'As we all know, Abdullah triumphantly announced that he had settled the Limbang claim with Brunei,' Dr Mahathir said, but 'no mention was made of the two blocks'.
Subsequently, however, Brunei denied that Limbang had been settled. 'The foreign office and Abdullah did not rebut Brunei's statement,' wrote Dr Mahathir.
'Now it is made clear that the two blocks are no longer a part of Malaysia,' said the former premier. 'Abdullah has caused Malaysia to lose at least US$100 billion of Malaysia's oil in this agreement. Can Wisma Putra please explain why it did not stop Abdullah?'
At press time, however, Mr Abdullah issued a rebuttal. He said that the discussions had revolved around establishing, once and for all, a boundary between the two countries. On the land side, a demarcation exercise would be carried out that, once completed, would establish a 'final and permanent' boundary between Sarawak and Brunei that would remove all previous 'irritants' (read Limbang) without 'any disadvantage to Malaysia'.
On the water side, Mr Abdullah conceded that the two blocks now belonged to Brunei but the agreement contained a clause that Malaysia would jointly develop the oil resources of the area for 'a period of 40 years'. This means, Mr Abdullah concluded, that as far as the oil and gas resources of the area are concerned, the agreement 'is not a loss for Malaysia'.
</TD></TR></TBODY></TABLE>
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