Malaysian national oil company Petronas said Saturday that it is in talks with Brunei to jointly develop two offshore oil reserves off Borneo island after the two nations ended a long-standing spat over ownership of the areas. Both Malaysia and Brunei awarded exploration contracts in 2003 to parts of an undersea site off Borneo with potentially large oil reserves. But exploration activities have since stalled because the countries discovered that some of the areas overlap. Petronas said in a statement that the two governments agreed the dispute areas belonged to Brunei through an exchange of letters in March last year as part of a deal to resolve long-standing issues. Following this, Petronas said it terminated its contract with US-based Murphy Oil Corp. in early April as the two blocks were no longer a part of Malaysia. It said it has been invited by Brunei to jointly develop the two blocks. “Petronas has set up a team that has begun negotiations with Brunei to work out the terms for this commercial arrangement,” it said. Former Prime Minister Mahathir Mohamad said the deal with Brunei cost Malaysia at least $100 billion in oil revenues from estimated reserves of almost a billion oil barrels.
