Petronas launches 2021 Malaysia bid round

Malaysia’s state-owned oil company Petronas has launched the Malaysia Bid Round (MBR) 2021 with 13 exploration blocks on offer.

The round, themed “Grow Your Energy Portfolio With Us”, was held through a virtual event held on 26 February, with over 250 potential and existing investors streaming live from North America, United Kingdom, and Europe as well as the Asia Pacific region.

Petronas offered 13 blocks in the 2021 round. Three are situated in the Malay basin (PM340, PM327 and PM342), four in the Sabah basin (SB409, SB412, 2W and X), and the remaining six are located in the Sarawak basin (ND3A, SK4E, SK328, SK427, SK439 and SK440).

Included in blocks PM342, SK4E, SK328 and SB409 are six discovered fields as a base for investors to explore more and help accelerate monetisation.

MBR 2021 also features the offering of four deepwater blocks (ND3A, 4E, 2W and X) off the coast of Sarawak and Sabah which saw prominent exploration discoveries in recent years.

Petronas added that this year’s MBR focuses on exploration blocks but that opportunities around late-life assets and undeveloped smaller discovered fields will be made available in the second half of this year. 

For this year’s bid round, Petronas introduced three new production sharing contract (PSC) terms. The first is the enhanced profitability PSC terms (EPT) which will be applied to nine shallow-water blocks, out of the 13 blocks offered. The EPT terms are formulated based on the feedback received from industry players to provide more attractive returns under current market conditions.

The small field assets (SFA) and late-life assets (LLA) PSC terms introduced recently were also developed based on market feedback to provide opportunities for industry players with niche capability to extract greater value from discovered resources and LLAs.

Petronas also incorporated several non-fiscal enhancements for the exploration blocks being offered such as larger block size, flexible bidding options such as the option to merge two adjacent blocks under one PSC, transferable minimum work commitments between two adjacent PSCs and a phased exploration period.

At the same time, the company is offering three large areas for study arrangement. First is the area to the south of the Malay Basin in Peninsular Malaysia with Pre-Tertiary and basement emerging plays yet to be explored. The second and third area covers the deepwater north of Luconia that extends northeasterly to Sabah which could have an extension of proven plays.

Petronas SVP of Malaysia Petroleum Management Mohamed Firouz Asnan said: “As an industry, we need to continue with exploration activities to seize the immense opportunities that the energy transition presents. If we don’t, we would then position ourselves out of the new energy equation.

“While exploration & production opportunities may appear everywhere around the world, I believe you will find ‘advantaged barrels’ here in Malaysia in diverse forms and when you seize the right opportunities that complement your portfolio, you will not only balance but also strengthen your portfolio. We hope to see new investors this year, including existing players to further grow their portfolio in Malaysia”.

Following the MBR 2021 launch, Petronas will host a virtual data room which will be accessible from 1 March until 6 August, allowing potential investors to conduct data room reviews. Petronas plans to award the PSCs to successful bidders before the end of the year.