SMJ Energy, Sabah’s oil and gas firm, is making a significant impact in the energy sector with a low-risk business model that emphasises practical, and steady growth.
its chief executive officer Dr Dionysia Kibat noted the company's current RM5.1 billion assets were generated focusing primarily on investments and calculated risks.
The company’s exclusive arrangement with national oil firm Petronas has enabled SMJ Energy to capitalise on high-yield assets without high-risk exploration.
This strategic access was granted through a Commercial Collaboration Agreement (CCA) between Petronas and the Sabah Government in December 2022, following which SMJ Energy was incorporated.
“We ensure greater participation, revenue, and influence without interfering in others’ assets,” Kibat told reporters, highlighting SMJ Energy's unique relationship with Petronas.
“We pursue profitable, producing assets while avoiding exploration risks and have free carry and back-in rights.”
Kibat noted that SMJ’s strategy focuses on stable, cash-generating assets and avoids high-risk exploration at a recent engagement with the local press in Kota Kinabalu.
SMJ’s 10% stake in LNG 9 has already yielded RM690 million in returns, and the firm earned approximately RM310 million from its 25% interest in the Samur downstream project.
These investments have generated consistent returns, securing a stable income stream for the Sabah Government.
SMJ Energy posted a net profit of RM259 million last year, and paid the state RM50 million in dividends, marking a 100% return on the state government’s initial investment.
Additionally, SMJ Energy contributed RM36 million in Sabah sales tax.
Kibat mentioned that SMJ Energy has no immediate plans to expand into downstream operations, instead prioritising sustained growth in its existing areas.
She however noted SMJ Energy is in the process of negotiating several new contracts to strengthen its business footprint but refused to speak further due to confidentiality clauses.
RAM Ratings awarded SMJ Energy an AAA rating in 2023, reaffirming it in September 2024.
The company also maintains a debt-free position in its Sabah International Petroleum (SIP) floating production and storage operations, securing stable cash flow. Under SIP, SMJ Energy owns two vessels, operating in Indonesian and Thai waters.
This acquisition was made possible through a Sukuk bond issuance in October of the previous year.
“Our debt stands at RM900 million, allocated to restructure SIP’s legacy debt,” she added.
As a state-owned company, SMJ Energy has also opened the oil and gas sector to local players, a shift from previous dominance by non-Sabahans.
Supporting Sabah’s oil and gas services and equipment (OGSE) sector is central to SMJ’s mission, empowering local contractors and increasing revenue-sharing opportunities for Sabah firms. Since its inception, SMJ has increased local participation in the oil and gas sector, created jobs, and boosted revenue.
Initiatives such as setting a local tender threshold and fostering partnerships between local and expert players have driven 143% revenue growth in the OGSE sector from 2021 to 2023, with a projected 1,000 jobs created by 2025. -November 9, 2024
