RI to keep offering oil areas in disputed Kalimantan waters

Indonesia will keep offering oil and gas exploration rights in waters off Kalimantan (Borneo) island that are also claimed by Malaysia, The Jakarta Post reported on its website on Saturday citing Bloomberg.

Indonesia invited bids for rights in the East Ambalat block, and plans to award the contract this month. Malaysia's state-owned Petroliam Nasional Bhd., or Petronas, said the area falls within the ND6 and ND7 blocks it offered a few months ago, said Iin Arifin Takhyan, Indonesia's director general of oil and gas.

"We will hold government-to-government talks to settle the dispute," Iin said in an interview. "But the area lies within our territory and until there's a change in territorial boundaries, we will still offer the block."

The areas lie near the islands of Sipadan and Ligitan, which for years were disputed by Malaysia and Indonesia. Though the International Court of Justice handed Malaysia sovereignty over the islands in 2002, the two countries have yet to agree on maritime boundaries.

Petronas said its plan to develop two oil and gas blocks off the eastern Malaysian state of Sabah may be in jeopardy because of overlapping claims by Indonesia, the New Straits Times reported this week, without citing anyone.

A few months ago, Petronas called for oil and gas companies to bid for the two blocks, the report said. The company wants to award exploration contracts before the end of the year, it said.

Indonesia, Southeast Asia's biggest oil producer, said last month it is inviting bids for 21 oil and natural gas areas as part of its move to find reserves and stem a decline in production. It will pick the winner in mid-October.(*)