06-07-2025
Can federal govt give away Sabah territory?
COMMENT
| The Ambalat Block dispute is a story of oil, maps, and law. It is a tale of two neighbours - Malaysia and Indonesia - who both claim rights to a rich patch of sea.
But it is also a test of Malaysia's own federal system and its standing in international law.
Here, we break down the legal issues, the history, and what it all means for Malaysia and the region.
Where did the dispute begin?
The Ambalat Block spans 15,000 sq km in the Sulawesi Sea, just off Sabah's coast. It is rich in oil and gas - estimated to hold between 62 million and 764 million barrels of oil, and 348 million to 40 billion cubic meters of natural gas.
In monetary terms, this translates to a range between US$4 billion (RM16.8 billion) to over US$50 billion (RM211 billion).
Which country owns the territories is disputed.
Sabah, formerly 'North Borneo', was claimed by the sultanates of Brunei and Sulu. Later, both sultanates granted concessions to European syndicates, notably to Baron von Overbeck and Alfred Den.
These concessions led, in 1881, to the establishment of the British North Borneo Chartered Company. The company administered the North Borneo territory as a British protectorate. In 1946, after World War II, the company transferred its rights to the British Crown.
North Borneo thereby became a Crown Colony.
The Queen's gift
Then, something happened that weakened the federation's claim over the Ambalat Block...
