SMJ Energy ushers in New Year with another deal
Published on: Wednesday, January 24, 2024
Lo (fifth left), Hasliza (fourth left) and Aliff (second right) and others giving a thumbs up after the signing ceremony at the Kuala Lumpur Convention Centre.
Kuala Lumpur: SMJ Energy Sdn Bhd (SMJESB) ushered in the New Year with another deal for up to 20 per cent stake in Block SB403 Production Sharing Contract (PSC), here, Tuesday.
Inking the Letter of Understanding (LoU), SMJESB, a wholly Sabah Government-owned company, is offered by Petronas Carigali Sdn Bhd (PCSB) and E&P Malaysia Venture (EPMV) of up to 20 per cent participating interest in Block SB403 PSC under the back-in option, which is exercisable upon completion of work commitment or commercial discovery, whichever is earlier.
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This is the SMJESB’s second exploration dealing with PCSB and EPMV through the same option. The first back-in option was signed on Feb 15, last year for Block SB409 PSC, situated offshore Sabah covering 14, 556sq km of area.
The event also marks the SMJESB’s latest achievement following the signing of the Commercial Collaboration Agreement (CCA) between the Sabah Government and Petronas on Dec 7, 2021, in line with its objectives to increase revenue sharing, have greater participation and say in the production and monetisation of oil and gas resources derive from the State.
Under the back-in option deal, SMJESB has the opportunity to access and review the information and data obtained from the exploration work programme before deciding to accept or turn down the back-in option offer. With that, it is able to manage exploration risk to the minimum.
No cost will be incurred by SMJESB should it choose not to take up the back-in offer.
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Situated offshore north of Sabah covering 10, 256sq km of area, Block SB403 was awarded to PCSB and EPMV by national oil company Petronas during the 2023 Malaysia Bidding Round (MBR).
The LoU was signed by SMJESB Executive Director Upstream Albert Lo, PCSB Chief Executive Officer Hasliza Othman and EPMV Head Aliff Anwar during a ceremony at the Kuala Lumpur Convention Centre.
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As a prudent financial investor, SMJESB focuses on profitable oil and gas-producing assets with strong cash flow, while securing exploration options with minimal exploration risks.
Apart from the two PSCs, SMJESB also has a 50 per cent stake in the Samarang PSC, a 25 per cent share in the Sabah Ammonia Urea petrochemical plant and through the acquisition of Sabah International Petroleum Sdn Bhd (SIP) last year, it also has a 10 per cent ownership stake in Petronas LNG9 Sdn Bhd that operates an LNG plant within the Bintulu LNG complexes.
Meanwhile, Petronas on Tuesday awarded production sharing contracts (PSCs) for six exploration blocks and one discovered resource opportunities (DRO) cluster marketed under the Malaysia Bid Round 2023 (MBR 2023), which is expected to garner more than RM1.3 billion worth of capital investment to the country in the form of exploration work activities.
The national oil firm said the seven new PSCs were awarded to Petronas Carigali Sdn Bhd, E&P Malaysia Venture Sdn Bhd, Petroleum Sarawak Exploration & Production Sdn Bhd, SM Energy Sdn Bhd, INPEX Malaysia E&P, PT Pertamina Malaysia Eksplorasi Produksi, Jadestone Energy (PM) Inc, Sarawak Shell Bhd, and E&P O&M Services Sdn. Bhd. (EPOMS).
Petronas Senior Vice-President of Malaysia Petroleum Management (MPM) Datuk Bacho Pilong said the award of the seven PSCs from MBR 2023 is a testament to investors’ confidence in Malaysia as a promising exploration and production investment destination.
“With these awards, all exploration blocks offshore Sarawak Basin and Northwest Sabah Basin have been fully licensed. Similarly in Peninsular Malaysia, we are pleased to see the ever-growing demand for its proven basins, which are supported by well-established and easily accessible infrastructure,” he said in a statement.
The blocks under the PSCs span across three regions in offshore Malaysia comprising two blocks in offshore Peninsular Malaysia, three blocks off the coast of Sarawak, as well as one exploration block and one DRO cluster situated off the coast of Sabah.
Petronas also launched the Malaysia Bid Round 2024 (MBR 2024) Tuesday, offering five exploration blocks and five clusters of DRO to potential investors.
It said the five exploration blocks are located in emerging basins namely Langkasuka Basin in the Straits of Malacca, Semporna and Sandakan basins off the eastern coast of Sabah, where the newly acquired multiclient data improves the subsurface imaging and offers a fresh look at multiple geological plays with large potential.
Additionally, the three DRO clusters offered are within shallow waters of Peninsular Malaysia and Sabah, and the two DRO clusters are within the deepwater realm of Sabah, located nearby existing facilities and enabled for quick monetisation, it added.
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