Malaysia's Petronas and Brunei's government have agreed to jointly develop one of two offshore blocks off Borneo island, the Malaysian government said on Wednesday.
The offshore exploration areas, formerly designated as Block L and Block M and now renamed CA1 and CA2, were awarded to Petronas and Murphy Oil Corp in 2003 but were cancelled in April after Malaysia and Brunei agreed that the blocks were not part of Malaysia.
Petronas and Brunei on Tuesday signed the production sharing agreement for Block CA1. Both countries hoped that the agreement for Block CA2 would be finalised soon.
"Both leaders noted that the signing represented a significant step forward in the development of cooperation between the petroleum authorities of both countries in this area," the Malaysian government said in a statement.
Malaysia and Brunei also said there was potential for future cooperation beyond Block CA1 and CA2 and a possible joint venture in a third country in oil and gas exploration. - Reuters
