THE WALL STREET JOURNAL: Malaysia Brushes Off Protest By Indonesia Over Oil Blocks: “Malaysia said Monday it had every right to award oil production contracts to Royal Dutch/Shell Group in two offshore blocks, dismissing protests and claims over the oil field by Indonesia.” (ShellNews.net) 28 Feb 05
DOW JONES NEWSWIRES
February 28, 2005
KUALA LUMPUR (AP)--Malaysia said Monday it had every right to award oil production contracts to Royal Dutch/Shell Group (RD) in two offshore blocks, dismissing protests and claims over the oil field by Indonesia.
The spat comes amid strain in Malaysia-Indonesia ties ahead of the crackdown from Tuesday on hundreds of thousands of illegal Indonesian workers here.
Malaysia's national oil company, Petronas (PET.YY), earlier this month awarded production sharing contracts to two of Shell 's Malaysian units and to Petronas Carigali Sdn. Bhd. for deep-water blocks ND6 and ND7, off the coast of Malaysia's Sabah state on Borneo Island.
Indonesia said the lucrative oil blocks are within its territory and accused Malaysia of violating its sovereignty.
Malaysian Prime Minister Abdullah Ahmad Badawi said the disputed offshore blocks area was "within our territory," and that Petronas had done nothing wrong.
"If the area is somebody else's, why should Petronas go in there?" Abdullah told reporters.
The blocks are near the Sipadan and Ligitan islands off Borneo, disputed for years between Malaysia and Indonesia. The International Court of Justice handed Malaysia sovereignty over the islands in 2002.
But Indonesia claims that Malaysia's water territory extends up to just 19 kilometers from the islands. The exact location of the oil blocks has not been disclosed.
Borneo, the world's third-largest island, is shared by portions of Malaysia and Indonesia, and all of Brunei.
Indonesia in November awarded a production sharing agreement contract to Unocal Corp. (UCL) to explore and exploit oil and gas in the East Ambalat Block, located in the same disputed waters.
-Edited by George Bernard