French oil company Total said today it had suspended exploration work in an oil block off Borneo island due to a territorial dispute between Malaysia and Brunei.

Total, leader of a consortium which last year won a Brunei tender for one of two huge offshore blocks, said it was "surprised" that Malaysia had entered territorial claims on the area.

Work had been halted to await the outcome of discussions between the two governments, said chairman and chief executive Thierry Desmarest.

"Exploration was suspended a few weeks ago," he told reporters on the sidelines of an Asia oil and gas conference here.

"We are surprised to see it is contested by another country. Under international practices, the waters are legitimate to Brunei. I hope at the end of the day there will be an amicable solution."

Total team chased off

Brunei last year awarded one block to Total and its partners US Amerada Hess and Australian BHP Billiton, and the other to Anglo-Dutch giant Royal Dutch/Shell group, involving Mitsubishi and ConocoPhillips, the New York-based International Oil Daily reported today.

Since early this year, however, the deepwater blocks have also been claimed by Malaysia whose state-owned oil firm Petronas awarded identical acreage to US Murphy Oil and its own subsidiary, Petronas Carigali, the publication of the Energy Intelligence Group said.

A drilling team from Total was chased off the block by the Malaysian navy in March, according to the Oil Daily , quoting reports from a Brunei newspaper.

The contested area represents about half of Brunei's entire offshore territory and is vital to its plans to diversify its oil-dependent economy.

The tiny enclave surrounded by Malaysia's eastern state of Sarawak on Borneo island is the fourth largest producer of natural gas in the world and third largest oil producer in Southeast Asia after Indonesia and Malaysia. - AFP