The Malaysian Embassy announced Monday the area of the Bukat block where Eni SpA, Italy's largest energy company planned to build a floating liquefied natural gas (LNG) plant falls outside the disputed territory between Malaysia and Indonesia.

Mohd Norhisyam Mohd. Yusof, the embassy's first secretary for bilateral and regional cooperation, said some parties had wrongly referred to the block as the disputed region.

"According to research conducted by the embassy, the Bukat block is located outside Malaysian territory, based on the 1979 Malaysian map," Norhisyam said.

The Bukat block is located near the disputed maritime area of Ambalat, off eastern Kalimantan.

Disputes over the territory, which is believed to contain huge oil and gas reserves, nearly sparked a military conflict between Indonesia and Malaysia in 2005.

The two countries have been involved in a tense dispute over ownership of the territory, which consists of the Ambalat block and the East Ambalat block.

Last week, Eni SpA's CEO, Paolo Scaroni, visited President Susilo Bambang Yudhoyono, Vice President Jusuf Kalla, and Energy and Mineral Resources Minister Purnomo Yusgiantoro, requesting the government protect its planned operation in the block.

Eni informed the government that it had found oil and gas reserves in the area.

The company currently operates six experimental wells in the block, each capable of producing a potential 4,000 barrels of oil per day.

The government has said it will throw full support behind Eni's plan.

Indonesia and Malaysia are still negotiating a solution for the Ambalat dispute.

"Malaysia and Indonesia are committed to settling this matter through negotiations and diplomacy," Norhisyam said.

-- JP/Alfian and Olivia Dameria

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