Indonesia, Malaysia may work together on disputed waters

Indonesia and Malaysia may work together to explore potentially oil-rich waters claimed by both nations, the leaders of the two countries said on Thursday, as reported by Reuters.

Both claim the Ambalat region in the Celebes or Sulawesi Sea off Borneo or Kalimantan's eastern shore, which caused tensions last year.

"It is possible that cooperation on energy can be done on the (Ambalat) waters," Indonesian President Susilo Bambang Yudhoyono told a news conference with Malaysian Prime Minister Abdullah Ahmad Badawi in West Sumatra's town of Bukittinggi.

Susilo also reiterated his pledge to settle claims with Malaysia over Ambalat region, where the two countries have awarded overlapping concessions to major oil firms.

"Indonesia would keep its good relations with Malaysia in regards to border (issues) over Ambalat," he said. "Looking ahead, territorial borders will be jointly managed in a mutually beneficial way."

Badawi, on a three-day visit to the scenic highland town of Bukittinggi, echoed Yudhoyono's statements, adding the Ambalat dispute was not an "easy matter".

"If necessary, we can work together to build the areas which are in dispute," he "That is a good option that needs to be considered."

At the height of the row last March, in the biggest test of ties between the Muslim-majority neighbours for many years, Indonesia sent warships and fighter jets to the area.

Tension has abated since the two countries appointed technical teams to try to work out a solution.

Last year, Malaysia struck an exploration deal with Anglo-Dutch giant Royal Dutch/Shell and state firm Petronas in the area while Indonesia gave U.S.-based Unocal Corp the right to explore hydrocarbons in the same area in 2004. (*)