Business

Sabah formalises 50% participating interest in Samarang PSC

Finalised acquisition comes after signing of HoAs on Feb 22

Updated 1 year ago · Published on 04 Apr 2023 9:37PM

Sabah formalises 50% participating interest in Samarang PSC — The Samarang Production Sharing Contract has seven existing oil- and gas-producing fields namely Samarang, Samarang Kechil, Sumandak, Zuhal, Alab, Erb West, and Kinarut, and two gas-receiving terminals, in Kota Kinabalu and Labuan (pic for illustration purposes only). – File pic, April 4, 2023

KOTA KINABALU – Sabah has inked an agreement with Petronas Carigali Sdn Bhd (PCSB) to finalise the acquisition of 50% participating interest in the Samarang Production Sharing Contract (Samarang PSC).

This is a follow-up to the signing of heads of agreements (HoAs) between state-owned SMJ Sdn Bhd (SMJSB) and PCSB, which was witnessed by Chief Minister Datuk Seri Hajiji Noor in Kuala Lumpur on February 22 this year.

Both parties have also agreed on the terms of the joint-operating agreement, and PCSB will continue to be the operator for Samarang PSC, while SMJSB will be a non-operating partner.

Hajiji commended all parties for expediting the signing of the deal, adding that Sabah will pursue further deals and participation in the state’s oil and gas industry.

The Samarang PSC has seven existing oil- and gas-producing fields namely Samarang, Samarang Kechil, Sumandak, Zuhal, Alab, Erb West, and Kinarut, and two gas-receiving terminals – in Kota Kinabalu and Labuan.

PCSB has held 100% interest under the Samarang PSC since 1995 and has signed a supplementary agreement with Petronas in 2018 to extend the PSC operations until December 31, 2035.

SMJSB would be receiving half of the partners’ entitlement from oil and gas production of approximately 36,000 barrels of oil equivalent per day.

The conclusion of this acquisition is the second significant development between PCSB and SMJSB following the commercial collaborative agreement signed between Petronas and the Sabah government on December 7, 2021.

On January 9, 2023, SMJSB signed an HoA with Petronas Chemicals Group Bhd for the acquisition of 25% interest in the Sabah Ammonia Urea (Samur) petrochemical plant.

SMJSB had also signed a letter of understanding deal on the back-in option arrangement for Block SB409 PSC giving the Sabah government-owned entity up to 20% participating interest upon completion of the work commitment or commercial discovery, whichever is earlier. – The Vibes, April 4, 2023