KUALA LUMPUR, Malaysia. July 3, 2025 — A heated political storm is brewing over Malaysia’s maritime boundary dispute with Indonesia in the Ambalat region, off the eastern coast of Sabah. Opposition coalition Perikatan Nasional (PN) has accused Prime Minister Dato’ Seri Anwar Ibrahim of compromising national sovereignty, reigniting a decades-old territorial contention.
PN leaders, including Fadhli Shaari, Hamzah Zainuddin, and Muhyiddin Yassin, issued statements alleging that Anwar’s recent agreement with Indonesian President Prabowo Subianto to explore joint development of the disputed Ambalat region—known as blocks ND6 and ND7 in Malaysia—signals a surrender of Malaysia’s rights. The opposition claims the move undermines national interests, overshadowing public concerns about judicial independence.
What is Ambalat, and Why the Controversy?
The Ambalat region, located in the waters east of Sabah and north of Kalimantan, has been a flashpoint since Malaysia included it in its continental shelf claim in a 1979 map, asserting ownership. Indonesia disputes this, calling the area Ambalat. In 2002, the International Court of Justice (ICJ) awarded Malaysia sovereignty over Sipadan and Ligitan islands but left the maritime boundary unresolved, perpetuating overlapping claims.
Malaysia’s state-owned PETRONAS once awarded exploration contracts to Shell for ND6 and ND7, while Indonesia granted similar rights to ENI and Unocal in Ambalat. With no resolution to the boundary dispute, the region’s estimated 1 billion barrels of oil and 1.4 trillion cubic feet of gas remain untapped—a resource base slightly smaller than Brunei’s oil fields but larger than many existing fields in Peninsular Malaysia, Sabah, and Sarawak.
Joint Development Proposal Sparks Debate
The current uproar stems from Anwar and Prabowo’s agreement in principle to pursue joint development of the disputed area, a move aimed at unlocking its economic potential. Former Economy Minister, Datuk Seri Rafizi Ramli strongly supports the initiative, citing a successful precedent: the Malaysia-Thailand Joint Development Authority (MTJDA), established in the 1970s to manage a similarly disputed area off Kelantan’s coast.
The MTJDA, with equal representation from both nations, enabled PETRONAS and Thailand’s PTTEP to develop oil and gas resources, now supplying 30% of Peninsular Malaysia’s gas needs. Rafizi argues that a similar model for Ambalat could prevent Malaysia from losing billions in annual revenue, especially as national oil reserves dwindle.
“I raised this during my time in Cabinet,” Rafizi said. “Joint development is proven and benefits both nations. If politicized and stalled, Malaysians—from Sabah to Perlis—will lose out.”
PN’s Strategy and Sabah’s Stake
Critics, including Rafizi, accuse PN of inflaming the Ambalat issue to stoke emotional sentiments, portraying the government as weak on sovereignty. However, the opposition insists the issue outweighs other concerns, such as judicial freedom.
To move forward, Rafizi urges the federal government to engage simultaneously with Indonesia and the Sabah state government to ensure Sabah’s interests are protected and profits are equitably shared. “PETRONAS needs this, and the rakyat will benefit,” he said, cautioning against knee-jerk opposition. “We can disagree, but let’s examine the merits first, not just attack.”
As Malaysia navigates this delicate diplomatic and economic challenge, the Ambalat dispute tests the balance between national pride and pragmatic cooperation, with billions in potential revenue hanging in the balance.