Petronas expands collaboration with Sabah in O&G industry

KUALA LUMPUR – Petroliam Nasional Bhd (Petronas) and the Sabah state government have inked a heads of agreement (HoA) to expand their collaboration in the oil and gas (O&G) industry.

In a statement today, Petronas said the HOA involves its wholly-owned subsidiary, Petronas Carigali Sdn Bhd (PCSB) and SMJ Sdn Bhd (SMJSB), a company wholly owned by the Sabah state government.

It said the HOA paves the way for SMJSB’s potential acquisition of a 50% participation interest in the Samarang Production Sharing Contract (PSC). 

The Samarang field is located approximately 50km offshore Sabah.

The agreement was signed by PCSB’s chief executive officer (CEO) Hasliza Othman and SMJSB CEO, Dr Dionysia Aloysius Kibat, witnessed by Petronas president and group chief executive officer Datuk Tengku Muhammad Taufik, Sabah Chief Minister Datuk Seri Hajiji Noor and Sabah Finance Minister Datuk Seri Masidi Manjun.

Commenting on the agreement, Tengku Muhammad Taufik said Petronas shares Sabah’s aspirations for mutual prosperity and the pursuit of sustainable development. 

“Having SMJSB on board as our upstream business partner underscores Petronas’ efforts to build a more inclusive environment for the O&G industry in Sabah, both offshore and onshore.

“SMJBS’s potential participation in the Samarang PSC also demonstrates Petronas’ continued commitment under the Commercial Collaboration Agreement to develop and unlock the full potential of Sabah’s oil and gas industry,” he added.

Petronas said the Samarang PSC is a producing asset encompassing key O&G hubs in Sabah, and it is currently producing approximately 36,000 barrels of oil equivalent per day (boe/d) for both O&G.

The gas is delivered to customers in Kota Kinabalu and Labuan.

Earlier this year, Petronas Chemicals Group Bhd had signed a HOA to welcome SMJSB as a partner to Petronas Chemicals Fertiliser Sabah Sdn Bhd as part of its efforts to provide greater revenue sharing with the Sabah government-linked company.

On February 15, PCSB and E&P Malaysia Venture also signed a letter of understanding with SMJSB on the back-in option arrangement involving Block SB409 PSC, giving the Sabah state government up to 20% participating interest upon completion of work commitment or commercial discovery, whichever is earlier. – Bernama, February 23, 2023