M'SIA-BRUNEI CONSULTATION PAVES WAY FOR COOPERATION AND INVESTMENT

JOHOR BAHARU (Malaysia), Aug 29 (Bernama) -- The two-day 12th Malaysia-Brunei Annual Consultation which ended Thursday would serve to strengthen existing bilateral relations between the two countries that share land and maritime borders.

Southern city Johor Baharu could feel proud to have played host to the
event this time as the leaders agreed to sort out unresolved issues between the
two countries.

Prime Minister Abdullah Ahmad Badawi and the Sultan of Brunei, Sultan
Hassanal Bolkiah, who led their respective delegations, also agreed on a
number of matters, including the overlapping territorial disputes between the
two countries.

Bandar Seri Begawan and Kuala Lumpur also agreed on an exchange of letters
on a mechanism to solving the disputes.

Abdullah told a press conference after the consultation that took place at
a resort here, that the signing of the letters between the two countries would
be held soon, probably in Bandar Seri Begawan, Brunei.

The dispute between the two countries over the overlapping territorial
claims over the Spratly Islands in the South China Sea arose in 2003 when
Malaysia and Brunei each gave the rights to companies for oil and gas
exploration around the islands.

The disputed area is believed to have a reserve of 700 barrels of
crude
oil.

Malaysia's national petroleum company, Petronas, had awarded the Production
Sharing Contract (PSC) in that deep-sea area to Murphy Oil while Brunei gave the
contracts to explore for oil and gas to other companies.

Following the overlapping territorial claims, Malaysia and Brunei which are
both oil producers, had stopped exploratory activities in the area and began
negotiating over the dispute.

Meanwhile, the consultation on Tuesday and Wednesday also paved the way for
Brunei to be among the new investors in Iskandar Malaysia.

So far, the economic corridor has not received any investmet from the
oil-rich sultanate.

Brunei's potential investment in Iskandar Malaysia which covers 2,200 sq km
in southern Johor as well as in Sabah and Sarawak was touched upon during the
discussion between Abdullah and Sultan Hassanal Bolkiah.

At the same press conference, Abdullah revealed Brunei's interest in
investing in Johor's southern economic corridor.

Iskandar Malaysia, which was launched by the prime minister on Nov 2006, is
seen as a magnet for foreign investors which are competing to invest in the
various business and industrial sectors there.

Since its launching, Iskandar Malaysia has managed to pull in RM37 billion
in investments from local and foreign investors.

Sultan Hassanal Bolkiah was briefed on the developments taking place in
Iskandar Malaysia on the second day of the Malaysia-Brunei Consultation.

The Sultan was also taken in a helicopter to view the changing landscape of
Iskandar Malaysia with the various projects underway in the area.

Impressed with the potential of Iskandar Malaysia, Sultan Hassanal Bolkiah,
before departing for Bandar Seri Begawan, had asked a group of investors from
Brunei to go over and take a closer look at the investment potential in this
economic corridor.

Abdullah, who is also the joint chairman of Iskandar Malaysia, was
confident that Brunei which had not invested in the economic corridor, would do
so in the near future.