ENI found oil at Ambalat block: official

A senior official of upstream regulatory body BP Migas said Italian firm ENI Limited and its partners had found hydrocarbon resources in the disputed Ambalat block off Borneo Island last year.

Trijana Kartoadmodjo, BP Migas? operation deputy, said in South Sumatra?s capital of Palembang that the oil and gas resources were discovered in two wells, that is Aster I and Padma I.

He said the discoveries were ?encouraging? but he refused to provide details.

He also said ENI had planned to conduct a delineation drilling at the block this year.

The Malaysia and Indonesian governments have been locked in a dispute over the block as both claim the area as part of their territories.

The Ambalat block was first awarded by the Indonesian government to Anglo-Dutch oil giant Royal Dutch/Shell in 1999. After failing to find oil, the firm sold the block to ENI in 2001. The block is now 55 percent owned by ENI in partnership with several companies, including American firm Unocal Corp., which owns 45 percent of the block.

Last year, Indonesia gave Unocal the right to explore for hydrocarbons in the adjacent concession called East Ambalat block.

The dispute started after Malaysia awarded the so-called X,Y,Z block to Shell and Petronas Carigali, a subsidiary of state owned firm Petronas, in February this year, which overlaps with the Ambalat and East Ambalat blocks.

Tension mounted between both nations after both sent warships to demonstrate claims over the area. Both later agreed to pull out their warships from the disputed area and to settle the dispute through a diplomatic process. (Alex)