Debate Stirs Over Offshore Blocks' Sovereignty As Petronas Talks To Brunei

Malaysia's state-run oil company Petronas announced on May 1 2010 that it is in negotiations with the Sultanate of Brunei over the development of two offshore oil and gas blocks in the South China Sea. Malaysia agreed to transfer the sovereignty of the two blocks to Brunei in March 2009 but retained the right to jointly develop the oil and gas resources of the area with Brunei. Malaysia's former prime minister Abdullah Badawi, who presided over the deal with Brunei, has been facing growing domestic criticism over the agreement, which has been portrayed by leading political figures as a compromise of Malaysian sovereignty that has led to a significant loss of oil and gas revenues.

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