RI rejects Malaysian offer on disputed Ambalat oil block

The Indonesian government has rejected the offer from the Malaysian government to jointly develop the disputed Ambalat oil block off the cost of East Kalimantan, Kompas daily reported on Saturday.

Minister of Foreign Affairs Hassan Wirajuda said in Bukittinggi on Friday that the Indonesian government would not talk about the cooperation until the problem related to the borderlines in the disputed oil block was settled.

"We told them that we (Indonesia) are more concerned about optimalizing efforts on settling the border areas first then talking about possible cooperation agreement," the minister was quoted as saying.

According to the minister, the Malaysian willingness to forge cooperation in the development of the disputed Ambalat oil bock was unveiled during a meeting between Malaysian Prime Minister Abdullah Ahmad Badawi and President Susilo Bambang Yudhoyono in the retreat town of Bukittinggi on Friday.

Under the proposal, the Malaysian government wanted its state oil company Petronas to cooperate with Indonesian state oil and gas firm Pertamina to jointly develop the Ambalat oil block.

Both Indonesia and Malaysia have claimed the Ambalat oil block as part of their territories.

The Malaysian decision to award a production sharing contract to Shell in the Ambalat area last year, had caused a tension between the two countries. Both countries had deployed warships to the disputed areas, but they later agreed to settle the dispute through a diplomatic process. (*)