KUALA LUMPUR – Sabah will now be able to acquire up to half of the Samarang production sharing contract (Samarang PSC), following the signing of the heads of agreement (HoA) between Sabah oil company SMJ Sdn Bhd and Petronas Carigali, which runs the Samarang oil field.
The signing of the Samarang PSC HoA today comes on the heels of last Wednesday’s letter of understanding on the back-in option arrangement for the Block SB409 production sharing contract.
The arrangement gives SMJ up to 20% participating interest upon completion of work commitment or commercial discovery, whichever is earlier.
Witnessing the signing ceremony at the Malaysian Petroleum Club, Petronas Twin Towers here today, Sabah Chief Minister Datuk Seri Hajiji Mohd Noor congratulated both parties, calling it another significant development for the state.
SMJ had also signed a HoA with Petronas Chemicals Group Bhd (PCSB) for the acquisition of 25% of participating interest in the Sabah Ammonia Urea petrochemical plant on January 9 this year.
Signing on behalf of SMJ was its chief executive officer Dionysia Aloysius Kibat while PCSB was represented by its CEO Hazliza Othman.
Also present at the signing ceremony was Petronas president and group chief executive officer Datuk Tengku Muhammad Taufik, Petronas’ Malaysia Petroleum Management (MPM) senior vice-president Mohamed Firouz Asnan, Sabah Finance Minister Datuk Seri Masidi Manjun, and Sabah State Secretary Datuk Seri Haji Safar Untong.
Petronas Carigali is the operator and has held 100% of participation in the Samarang PSC since 1995. It had signed a supplementary PSC agreement with Petronas in 2018 to extend the PSC operations until December 31, 2035.
Both parties will now finalise the farm-out agreement in which SMJ will assume an on-operating role in the Samarang PSC partnership.
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.
SMJ will receive 50% of partners’ entitlement from oil and gas production of approximately 36 thousand barrels oil equivalent per day, and will be a 50% co-seller of natural gas to existing gas customers in Kota Kinabalu and Labuan.
The signing of the HoA and the potential acquisition of the 50% participating interests in Samarang PSC would be the second significant development after the signing of the commercial collaboration agreement between Petronas and the Sabah government on December 7, 2021. – The Vibes, February 22, 2023
