Kuala Lumpur: Sabah, through SMJ Energy Sdn Bhd (SMJE), has acquired 20 per cent participating interest in the North Sabah Enhanced Oil Recovery Production Sharing Contract (EOR PSC) following the signing of the Farm-Out Agreement (FOA) with Petronas Carigali Sdn Bhd (PCSB) at Kuala Lumpur Convention Centre (KLCC), Monday.
Chief Minister Datuk Seri Hajiji Noor said this latest achievement reflects the State Government’s long-term strategy to strengthen Sabah’s energy sector through high-quality investments and close collaboration with Petronas.
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“With opportunities now expanding across the State from the West to the East Coast, we welcome reputable investors to partner with us in ensuring sustainable and lasting benefits for the people of Sabah,” he said after witnessing the exchange of documents in conjunction with the Commemoration of Sabah and Petronas Collaboration.
The acquisition, effective Jan 1, 2026, follows the Heads of Agreement (HoA) signed between SMJE and PCSB in November 2025, paving the way for today’s final transaction.
It is SMJE’s second upstream acquisition since entering the Samarang PSC in April 2023, which further solidifies its role as a strategic player in Sabah’s oil and gas landscape.
The North Sabah EOR PSC includes four producing oil fields located in shallow waters approximately 70 metres deep offshore Kota Belud.
The asset comprises 20 offshore platforms connected by a 143km, 24-inch pipeline that evacuates crude oil to the Labuan Crude Oil Terminal (LCOT).
Following the transaction, SMJE will assume a 20pc non-operating partner interest, while Sea Hibiscus Sdn Bhd continues as operator with a 50pc participating interest and PCSB retains 30pc.
The move is expected to raise SMJE’s crude entitlement, increasing its cargo lifting from 4.7 cargoes in 2025 to 7.0 cargoes in 2026, enhancing revenue streams and supply reliability for Sabah.
Deputy Chief Minister II cum Finance Minister Datuk Seri Masidi Manjun, who is also SMJE Chairman, said North Sabah is a strategic producing asset and SMJE’s participation signals a maturing role for the State in upstream activities.
“This move secures long-term value, builds commercial capability and ensures more benefits flow directly to the people of Sabah,” he said.
Under the current Sabah administration, he said SMJE continues to accelerate value creation through strategic partnerships, local participation and responsible resource management.
Earlier, an exchange of documents took place for the HoA between Petronas and Sabah Energy Corporation (SEC) for the Mutiara Cluster. This HoA establishes the framework for a future Gas Sales Agreement (GSA) to facilitate the cluster’s development, targeted for the first quarter of 2029.
Additionally, documents were exchanged for the Permata Cluster PSC between Petronas and Bridge Petroleum Limited, a newly-appointed Petroleum Arrangement Contractor (PAC).
The Permata Cluster is located offshore Sabah.
