Malaysia and Indonesia may head towards dispute over oil claims

Malaysia and Indonesia appear headed towards a territorial dispute, with their national oil companies laying claim to potentially rich offshore oil-and-gas blocks off Borneo island.
Malaysia has said it was ready to contest any overlapping claim to the area. Petronas, Malaysia’s national oil company, said that it “was in advance stages of awarding the ultra-deepwater blocks… which are within the Malaysian territorial boundary”.
But Pertamina, the Indonesian oil company, is also planning to award exploration contracts for the two blocks, located about 150 km off the Malaysian eastern state of Sabah and Indonesia’s Kalimantan province.

Datuk Zainal Abidin Osman, a senior Foreign Ministry official, said that Malaysia was ready to contest any overlapping claim to the area.
“Malaysia’s rights over these areas have never been disputed by any country before as they are clearly ours,” Datuk Zainal was quoted as saying.
The blocks lie near the islands of Sipadan and Ligitan, which for years were the subject of a dispute between Malaysia and Indonesia. The International Court of Justice handed Malaysia sovereignty over the islands in 2002.

Malaysia has also been stepping up its maritime claims around a zone rich in oil and natural gas near the Borneo island state of Sarawak that has been disputed by neighbouring Brunei. The ambiguity resulted in a confrontation in March last year, when a Malaysian navy patrol vessel ordered out an exploration team from Total, the French company awarded the exploration contract by Brunei.
Subsequent negotiations on production-sharing are believed to have stalled.