Petronas inks farm-out deal for oil & gas field off Sabah
Petronas Carigali (PCSB), a wholly-owned subsidiary of Malaysia’s state-owned energy giant Petronas, has entered into a farm-out agreement (FOA) for an oil and gas asset off the coast of Sabah with SMJ Sdn Bhd (SMJSB), a company wholly-owned by the Sabah state government.
This deal has been signed by Hasliza Othman, PCSB’s Chief Executive Officer and Dr Dionysia Aloysius Kibat, SMJSB’s Chief Executive Officer for the sale of Petronas Carigali’s 50 per cent of non-operating participating interest in the Samarang production sharing contract (PSC).
According to Petronas, the transaction is currently pending regulatory approvals and fulfilment of conditions precedent. This follows a heads of agreement, which PCSB and SMJSB inked to record the duo’s agreement, confirming SMJSB’s participation in the Samarang PSC. This is superseded by the execution of the FOA, based on the firm’s statement.
Furthermore, the FOA marks the second significant development between PCSB and SMJSB, following the commercial collaboration agreement (CCA) signed between Petronas and the Sabah government on 7 December 2021.
Under the FOA, Petronas Carigali will continue to be the operator of Samarang PSC with SMJSB on board as the non-operating partner and “this collaboration bears testament to Petronas’ continuous commitment to achieving its shared aspiration of sustainable growth for the domestic oil and gas industry,” says the company.
Located approximately 50 km off the coast of Sabah, the Samarang field is currently producing approximately 36,000 barrels of oil and gas equivalent per day (kboe/d). The gas, at 134 million standard cubic feet per day (MMscf/d), is part of the supply for customers in Kota Kinabalu and Labuan.