THE WALL STREET JOURNAL: Malaysia, Indonesia To Settle Oil Dispute Peacefully: “The leaders of Malaysia and Indonesia agreed Monday to diplomatically resolve a growing dispute over an offshore oil field in an area where both countries have sent warships and planes in recent days.”: “The latest problems with the oil field began when Malaysia's national oil company, Petronas, awarded production-sharing contracts in February to two of Shell's Malaysian units and to Petronas Carigali Sdn. Bhd. for two deep-water blocks.” (ShellNews.net) Posted 8 March 05

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KUALA LUMPUR (AP)--The leaders of Malaysia and Indonesia agreed Monday to diplomatically resolve a growing dispute over an offshore oil field in an area where both countries have sent warships and planes in recent days.

Malaysia's Prime Minister Abdullah Ahmad Badawi and Indonesian President Susilo Bambang Yudhoyono agreed in a telephone conversation that their foreign ministers will discuss the matter further, the two leaders announced separately.

The attempt to defuse the crisis came after Malaysia accused Indonesia of trespassing in its territory when a navy patrol ship crossed about eight nautical miles (9.2 miles; 15 kilometers) into Malaysian waters,

Indonesia now has at least five warships, two nomad aircraft, four F-16 jets and one helicopter in the area, said navy spokesman Lt. Col. Guntur Wahyudi.

Two more warships could be deployed there if needed, he said. The Royal Malaysian Navy also has stationed two warships in the area to patrol within Malaysian waters.

"To prevent any undesirable incidents which may create tension in the relationship between Indonesia and Malaysia, both of us agreed for the matter to be discussed at the diplomatic level," Abdullah said.

"Hopefully, in this way, any problem faced will, God willing, be resolved in a cordial manner," he said in a speech.

Foreign Minister Syed Hamid Albar was to leave for a three-day visit to Jakarta on Wednesday for talks with his Indonesian counterpart, Hassan Wirajuda, on the overlapping claims.

Also Monday, Yudhoyono visited an island near the disputed site off Borneo island.

"Solving the problem should be done without any confrontation, especially armed confrontation," Yudhoyono told Borneo officials and residents.

Also Monday, the chairman of Indonesia's parliamentary foreign affairs commission, Theo Sambugaga, demanded that Indonesia recall its ambassador to Malaysia to protest that country's claims in the area.

"We ask the government not to negotiate with Malaysia on this issue because it (Indonesia's ownership) is indisputable and not up for negotiation," Sambugaga told reporters.

Separately, about 100 Indonesians demonstrated outside the Malaysian Embassy in Jakarta, shouting "crush Malaysia."

The latest problems with the oil field began when Malaysia's national oil company, Petronas, awarded production-sharing contracts in February to two of Shell's Malaysian units and to Petronas Carigali Sdn. Bhd. for two deep-water blocks.

Indonesia said the lucrative oil blocks are within its borders. In the past 10 days, both Malaysia and Indonesia have deployed warships to the area, each claiming violations of its airspace and territorial waters.

The blocks of Borneo near Sipadan and Ligitan islands, disputed for years between Malaysia and Indonesia.

The International Court of Justice gave Malaysia sovereignty over the islands in 2002. But Indonesia claims Malaysia's water territory extends only 19 kilometers (12 miles) from the islands. The exact location of the blocks has not been disclosed.