Apr 30, 2010

Former PM Badawi denies giving away oil rights

Former premier Abdullah Ahmad Badawi has dismissed his predecessor Dr Mahathir Mohamad's allegations that he had 'given away' two large oil rich areas to Brunei. In a statement late this afternoon, Abdullah said the resources in the 'Block L and M' oil-rich areas in the South China Sea referred to by Mahathir were now shared by Malaysia and Brunei under a territorial and commercial deal inked on March 16 last year. Although Block L and M were now the sovereign rights of Brunei, Malaysia will be allowed to participate in joint efforts to develop oil and gas resources there for 40 years. According to Abdullah, the deal was meant to resolve protracted land and maritime boundaries.

KUALA LUMPUR, April 30 — Tun Abdullah Ahmad Badawi denied today that he signed away oil rights to Brunei after a scathing attack from his predecessor Tun Dr Mahathir Mohamad.

The former prime minister issued a statement today denying Dr Mahathir’s accusation that he had given up RM320 billion in potential oil earnings in return for Brunei dropping its claim over Limbang in Sarawak.

Dr Mahathir had claimed Abdullah had given away Malaysia’s claim to oil offshore of Limbang following a trip to Bandar Seri Begawan in the waning days of his administration last year.

Abdullah said today that the areas known as Block L and Block M would be jointly developed by the two countries for a period of 40 years.

“The financial and operational modalities for giving effect to this arrangement will be further discussed by the two sides. This means that in so far as the oil and gas resources are concerned, the agreement is not a loss for Malaysia,” said Abdullah in his statement.

The country’s fifth prime minister clarified that his visit to Brunei which was made three weeks before his departure was aimed at solving a long standing border dispute “without any disadvantage for Malaysia.”

The visit resulted in an agreement between the two countries to establish a permanent land and sea boundary.

“This agreement serves to settle certain overlapping claims which existed in the past which included the area of the concession blocks known before as Block L and Block M. Sovereign rights to the resources in this area now belongs to Brunei.

“However, for this area the agreement includes a commercial arrangement under which Malaysia will be allowed to participate, on a commercial basis, to jointly develop the oil and gas resources in this area for a period of 40 years,” said Abdullah.

He added that he signed the agreement to solve a border dispute with Brunei with prior approval from the Cabinet.

“In my capacity as the Prime Minister of Malaysia, I signed the Exchange of Letters with the Sultan of Brunei after the Malaysian Cabinet approved the deal on 11 February 2009,” said Abdullah.

Earlier today both former prime minister Tun Dr Mahathir Mohamad and the DAP’s Lim Kit Siang demanded an explanation from Abdullah after news reports emerged last week suggesting Malaysia had signed away its oil rights.

Murphy Oil, which had entered a production-sharing contract with national oil company Petronas, for Block L and Block M offshore of Limbang, announced last week that it was ceasing operations because “it was no longer part of Malaysia.”

“Abdullah Badawi negotiated with the Sultan (of Brunei) to get back Limbang in Sarawak. In return he agreed to surrender the two blocks to Brunei. No Petronas representatives were present, only foreign office staff and the foreign affairs adviser to the PM,” Dr Mahathir had said in a posting on his blog yesterday.

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