EXCHANGE OF LETTERS BETWEEN M'SIA-BRUNEI RESOLVED OUTSTANDING BILATERAL ISSUES

KUALA LUMPUR, May 3 (Bernama) -- The exchange of letters between Malaysia
and Brunei in March last year has resolved the outstanding bilateral issues
between the two countries through amicable settlement, Wisma Putra (Malaysian
Ministry of Foreign Affairs) said Monday.

The agreement, which had resulted in a new beginning in the bilateral
relations between the two states, was the culmination of 20 years of tough
negotiations between Malaysia and Brunei on various issues including maritime
boundaries," it said in a statement here.

The Foreign Ministry said one of the key elements of the agreeement inked by
former prime minister Abdullah Ahmad Badawi and the Sultan of Brunei,
Sultan Hassanal Bolkiah, on March 16, 2009, was the final delimitation of
maritime boundaries between Malaysia and Brunei.

The others were the establishment of a Commercial Arrangement Area (CAA) for
oil and gas, the modalities for the final demarcation of the land boundary
between Malaysia and Brunei, and unsuspendable rights of maritime access for
nationals and residents of Malaysia across Brunei's maritime zones.

"The termination of the production sharing contracts covering Blocks L and
M, which were awarded by Petronas to Petronas Carigali Sdn Bhd and Murphy Oil in
2003, is in accordance with the establishment of the CAA as provided for in the
exchange of letters," it said.



Wisma Putra said the exchange of letters would strengthen the existing
relationship and enhance good neighbourliness between the two countries.

Besides getting the Malaysian cabinet's approval on the contents of the
exchange of letters between the two countries, the state governments of Sabah
and Sarawak were also consulted and fully briefed on matter, it added.

Former prime minister Dr Mahathir Mohamad, in a blog posting on
Thursday, questioned why Blocks L and M no longer belonged to Malaysia and said
that the loss could cost Malaysia at least US$100 billion (RM320 billion).

Dr Mahathir claimed that his successor, Abdullah, had surrendered the two
blocks in exchange for Limbang.

Abdullah clarified that the land and sea agreement with Brunei was approved
by the Malaysian cabinet and that Malaysia would be allowed to participate in
joint development of oil and gas on a commercial basis in the two areas for a
period of 40 years.

-- BERNAMA