ENEOS secures 50-year tenure at Malaysian block with new contract extension

The Malaysian subsidiary of Japan’s ENEOS Xplora has signed an agreement with Malaysia’s national oil and gas company, Petronas, to extend the production sharing contract (PSC) for a block situated off the coast of Sarawak, offshore Malaysia.

The 10-year extension will enable ENEOS and its partners to remain at block SK10 from 2028 to 2038. The PSC was awarded to ENEOS Xplora Malaysia and PETRONAS Carigali back in 1987, with the former being the operator.

Following the discovery of the Helang field in 1990, the first production started in 2003. Since then, Xplora Malaysia has steadily enhanced output through a series of development activities, which led to gas production from the Layang and Beryl fields in 2017 and 2018, respectively. 

ENEOS Xplora, which was known as JX Nippon at the time, started producing oil from Layang in 2019, with oil production from Helang following suit a year later.

Natural gas produced from SK10 PSC is transported through subsea pipelines to the liquefaction plant in Bintulu, Sarawak, owned by Malaysia LNG. There, it is processed into liquefied natural gas (LNG) and exported to East Asian countries, including Japan. 

Since ENEOS claims the LNG volume from the block accounts for approximately 4% of Japan’s total annual LNG imports, the block is seen as a significant contributor to the region’s stable energy supply. 

Based on information from ENEOS’ website, Petronas Carigali has a 25% interest in the block, while the remaining 75% is divided between ENEOS Xplora (78.7%), INPEX (15%), and Mitsubishi Corporation (6.3%).

Two months ago, ENEOS and its partners won PSCs for two blocks offshore Indonesia, the Gaea and Gaea II, as part of the second round of the Indonesia Petroleum Bidding Round (IPBR) 2024.

According to EnQuest, which is set to become the blocks’ operator, these present an unrisked resource potential comprising several trillion standard cubic feet for the company and its joint venture partners.