Maritime Border Dispute Derails Brunei-Malaysia Oil Exploration

Kuala Lumpur - International oil companies are anxiously awaiting the outcome of a maritime border dispute between Malaysia and Brunei, oil industry sources told Reuters on Thursday. 

His Majesty the Sultan of Brunei and Malaysian Prime Minister Mahathir Mohamad discussed the dispute during talks in the northern Malaysian city of Penang last weekend.

 "That was an annual meeting between them and there were other matters which both leaders were interested in ... such as the exploitation of maritime resources in that area," Malaysian Foreign Minister Syed Hamid Albar was quoted as saying by local media after the meeting. 

That fleeting reference was the only public acknowledgement of a dispute that oil companies have known about for months. "There is without any question a dispute over ownership of the zone," one oil industry official told Reuters. 

In January 2003, it became clear there were conflicting views over where the boundaries lay, when Malaysian state oil firm Petronas signed a production sharing contract with Murphy Oil Corp in an oil exploration block off Sabah that overlapped a block Brunei awarded to TotalFinaElf a year earlier. 

BHP Billiton and Amerada Hess are part of the Total joint venture. In late 2003, Murphy announced it had made a "very significant oil discovery, in an adjoining block, and put preliminary estimates on the recoverable reserves in the Kikeh oil field at between 400 million and 700 million barrels. 

A Total official said he did not want to comment on the dispute.

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