Petronas has awarded Block SB405, offshore the coast of Sabah, Malaysia, to ConocoPhillips East Malaysia Limited (COPEM) a subsidiary of ConocoPhillips and Petronas Carigali (PCSB). The award of this exploration block, which has an area size of 5,857 sq km in water depth of up to 100m, is expected to bolster exploration activities off the coast of Sabah following the opening of more block investment opportunities in the country.
COPEM is the operator for Block SB405 PSC, with a participating interest of 85%, while PCSB holds the remaining 15%. SB405 is the new addition to COPEM’s existing interests in five production sharing contracts (PSC) in Malaysia, which are Block J, G and Kebabangan located off the coast of Sabah; and SK304 and WL4-00 located off the coast of Sarawak.
Mohamed Firouz Asnan, Senior Vice President of Malaysia Petroleum Management, commented, “The entry of COPEM with its world class proprietary seismic technology into Block SB405 is expected to enhance the hydrocarbon resource potential off the coast of Sabah. This is an area that has a proven working petroleum system with previous discoveries such as Kuda Terbang and Nymphe fields. At the same time, the new investment of COPEM in Block SB405 represents enhanced confidence of foreign investors in the upstream sector in Malaysia.”
“The partnership with PCSB provides that winning combination to support the potential development of the resource within the North East Sabah basin area upon successful commercialisation of the discoveries. Under our right asset, right player strategy, we hope to unlock the full potential of the hydrocarbon resources in Malaysia towards successfully delivering clean and reliable energy to our customers in Malaysia and abroad,” he added.
More blocks on offer
Alongside signing the PSC with COPEM, Petronas has also announced that it will be offering 13 offshore exploration blocks offshore Malaysia at the upcoming Malaysia Bid Round (MBR) 2021 with six discovered fields included to incentivise investors.
Mohamed Firouz Asnan said, “MBR 2021 will feature significant enhancements which include larger block areas coupled with flexible bidding options and low entry costs. We will also be offering relatively new fiscal terms to be applied in the PSCs such as enhanced profitability (EPT) for the shallow water blocks, the late life assets (LLA) and small field assets (SFA) which are designed to match the risk and rewards of the investments with the type of assets available.”
“These terms have been formulated based on the feedback from industry players, taking into account market conditions, further strengthening Malaysia’s position as the oil and gas hub in a growing and thriving market of South East Asia. Besides improved fiscal terms, Malaysia offers good network connectivity by way of established world-class infrastructure which enables ease of monetisation,” he added.
In recent months Malaysia has shown high potential for future oil and gas development offshore with fresh discoveries, such as PTT Exploration & Production announcing its biggest find to date in the SK 410B block, set to boost already high production levels of natural gas and oil. The news distributions by Petronas will only serve to bolster and consolidate the country’s position as one of the highest producing countries in Asia.