The Exchange of Letters signed between Malaysia and Brunei in 2009 has resolved the outstanding bilateral issues between the two countries through amicable settlement.
This would strengthen the existing relationship and enhance good neighborliness between Malaysia and Brunei, Malaysian Foreign Affairs Ministry said in a statement here on Monday.
The statement said that on March 16, 2009, former Malaysian Prime Minister Abdullah Ahmad Badawi and Brunei Sultan Hassanal Bolkiah exchanged the letters that represented an agreement that had settled various outstanding issues between the two countries.
The key elements included the final delimitation of maritime boundaries between Malaysia and Brunei, the establishment of a Commercial Arrangement Area for oil and gas, the modalities for the final demarcation of the land boundary between the two countries.
According to the statement, the Exchange of Letters had established the final delimitation of territorial sea, continental shelf and exclusive economic zone of both states, recognizing also two Malaysian oil concession blocks coincided with Brunei's blocks.
The statement said that under the relevant provisions of the United Nations Convention on the Law of the Sea 1982, Brunei is entitled to exercise sovereign rights over the two Malaysian blocks situated within Brunei's maritime areas.
However, the establishment of the Commercial Arrangement Area (CAA) incorporating these blocks provided for a sharing of revenues from the exploitation of oil and gas in the CAA between the two states, said the statement.
The Exchange of Letters' contents, approved by the Malaysian Cabinet, was the culmination of 20 years of tough negotiations between Malaysia and Brunei on various issues. The successful exchange of letters resulted in a new beginning in the bilateral relations between the two nations.
Former Malaysian Prime Minister Mahathir Mohamad alleged his successor Abdullah Ahmad Badawi recently for surrendering two blocks of oil-rich areas in South China Sea to Brunei in exchange for the later dropping its claim over Limbang in Sarawak, East Malaysia.
He said that Abdullah's move had caused Malaysia to suffer a loss of over 100 billion U.S. dollars.
Abdullah then refuted Mahathir's words in a statement that Malaysia and Brunei agreed to establish a final and permanent maritime boundary in the Exchange of Letters on March 16, 2009.
While the said oil-rich blocks belong to Brunei now, Abdullah said Malaysia was allowed to participate commercially to develop the oil and gas industry for a period of 40 years.
Current Malaysian Prime Minister Najib Razak said that the issue had been discussed for over 20 years with the principles achieved in 2009, and was now left with the survey of the involved area.
Limbang is a district in the Sarawak State, East Malaysia that divides Brunei's land into two separate parts. When the states of Sabah and Sarawak joined Singapore and Malaya to form Malaysia in 1963, Brunei wanted to reclaim Limbang.
Singapore withdrew from Malaysia in 1965 to become an independent state.