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UpstreamOnline: Malaysia and Brunei ‘settle differences’

By Upstream staff

Malaysia and Brunei have reached a tentative deal to end a maritime border dispute that has halted exploration off Borneo for four years, sources in both countries said today.

A joint proposal to resolve the boundary issue is expected to be publicly endorsed by the leaders of both countries tomorrow, and could lead to the resumption of oil exploration in the area, sources told Reuters.

“It might resolve (the oil dispute),” a Malaysian source familiar with the proposal told the news agency. The source added that the proposal dealt with the sovereign boundary and that the next step would be to sort through the overlapping oil claims.

A source in Brunei confirmed the proposal was backed by both sides but also declined to give details, Reuters said.

Malaysian Prime Minister Abdullah Ahmad Badawi and Brunei’s sultan, Hassanal Bolkiah, met for annual bilateral talks in the Brunei capital today. The talks are due to end tomorrow morning.

The dispute erupted in 2003 when Malaysia and Brunei awarded production sharing contracts to four overlapping deep-water exploration blocks in the South China Sea, close to where a 440-million-barrel discovery had been made the year before.

Malaysian state oil player Petronas awarded blocks L and M to US player Murphy Oil, while Brunei awarded Block J to France’s Total , BHP-Billiton and Hess and Blcok K to Shell, Mitsubishi and ConocoPhillips .

A spokesman for Malaysia’s foreign ministry gave no immediate comment and said a joint statement on the outcome of the leaders’ talks would be issued tomorrow.

Officials from Brunei’s Petroleum Unit and its information ministry could not be immediately reached for comment.

13 August 2007 08:59 GMT  | last updated: 13 August 2007 08:59 GMT 

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