Petronas, Sabah state expand collaboration in upstream
Malaysian state-owned energy company Petronas and the government of Sabah state have signed a preliminary agreement to cooperate in the oil and gas upstream sector, Petronas said on February 23.
Petronas Carigali, a subsidiary of Petronas, and SMJ, a company wholly owned by the Sabah state, have penned a heads of agreement (HoA), which paves the way for SMJ’s potential acquisition of a 50% participation interest in the Samarang production sharing contract (PSC). The Samarang field is located approximately 50 km offshore Sabah.
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The Samarang PSC is a producing asset encompassing key oil and gas hubs in Sabah. Currently, it is producing approximately 36,000 barrels of oil equivalent per day (boe/d) for both oil and gas. The gas is delivered to customers in Kota Kinabalu and Labuan.
Earlier this year, Petronas signed a HoA which welcomed SMJ as its partner to Petronas Chemicals Fertiliser Sabah with a 25% of equity interest. Earlier this month, Petronas Carigali and E&P Malaysia Venture also signed a letter of understanding with SMJ on the back-in option arrangement on the Block SB409 PSC, giving the Sabah state government up to 20% participating interest upon completion of work commitment or commercial discovery, whichever is earlier.