KUALA LUMPUR – With all eyes on Hibiscus Petroleum’s United Kingdom (UK) Marigold project, the company said it expects the project, with contingent resources of 43.6 million barrels of oil equivalent (BOE), to kick off by late this year or early 2023.
For now, the Malaysian petroleum exploration firm is awaiting approvals from the UK government and environmental bodies to execute the project, which has so far cost Hibiscus and its UK partner Caldera Petroleum US$100 million (RM418.65 million).
Hibiscus Petroleum managing director Dr Kenneth Gerard Pereira, however, told The Vibes that he is confident approvals will not take long, as he believes the authorities are “looking seriously into it”.
This is because on February 9, Chancellor of the Exchequer Rishi Sunak told the House of Commons that a subsidiary of Hibiscus, Anasuria Hibiscus’ Marigold cluster in the North Sea fields, is one of six projects to be fast-tracked for approvals in the UK.
The acceleration, according to Sunak, is to keep up with the UK’s growing energy needs.
We hope to start production as soon as possible, especially since oil prices are very attractive at the moment,” said Pereira.
Benchmark Brent crude oil prices climbed close to USD120 a barrel on Wednesday, with Russian oil exports disrupted as traders try to avoid becoming entangled in sanctions.
Substantial growth despite challenges ahead
Pereira, however, did not rule out the fact that the project, which is 87.5% Hibiscus owned and 12.5% owned by Caldera, can be challenging.
“We have to understand that the UK has committed to zero emissions by 2020. So we believe there will be a lot of scrutiny on their part. The technical solution that we use must also have the most minimal effects on the environment,” he said.
The UK government has indicated that it preferred the sub-sea tie-back to infrastructure technology, which refers to a development whereby new oil or gas wells underwater are connected via pipelines to existing infrastructure, such as a platform.
It is quite mitigated because we are using a lot of existing infrastructure already,” Pereira added.
The Marigold project is said to provide the company with a material, long-term growth opportunity in the UK’s North Sea.
Pereira said the company is already targeting substantial growth for the financial year between July 1, 2021 to June 30, 2022.
“We are targeting to produce up to 5.2 million BOE for the year. This is substantial, as compared to the 3.3 million BOE that was produced in the previous financial year ending June 30, 2021.”
Hibiscus Petroleum is Malaysia’s first listed independent oil and gas exploration and production company, having made its debut on Bursa in 2011.
It has producing assets in Malaysia, the UK, Vietnam and Australia.
More than 70 million BOE reserves
The acquisition of Spanish energy major Repsol Exploración SA’s upstream assets in Malaysia and Vietnam for USD212.5mil in the middle of last year has resulted in an increased production of 23,000 BOE per day from its previous 8,000 BOE per day.
As of January 2022, Hibiscus’ oil and gas reserves stood at 77.3 million BOE, with a further 73.2 million barrels of contingent resources that can be further developed into reserves.
The company’s net profit for the second quarter of financial year 2022 quadrupled to RM 48.49 mil, while earnings before interest, taxes, depreciation and amortisation stood at RM139.9mil.
For the six-month period ended December 31, 2021, net profit rose to RM 90.01 mil from RM 22.05 mil in the same period before.
The pure upstream oil and gas player, with a portfolio of assets in Malaysia, North Sea and Oceania, did not declare a dividend for the quarter.
At the end of trading yesterday, Hibiscus shares were up 6.56% at RM1.30. – The Vibes, March 4, 2022
