Shell to invest in another deepwater project in Malaysia

Shell’s Malaysian business, Sabah Shell Petroleum Company (SSPC), has taken a final investment decision (FID) on Phase 4 of the Gumusut-Kakap-Geronggong-Jagus East (GKGJE) deepwater offshore development project in Malaysia. This comes only months after the first oil from Phase 3 of the project.

SSPC is the operator of the Gumusut-Kakap semi-submersible floating production system (GK-Semi FPS) located off the coast of Sabah, Malaysia. GKGJE Phase 4 development is a subsea tie-back project expected to achieve the first oil in late 2024. It involves drilling four wells and ties back to the GK-Semi FPS, Shell explained in a statement on Monday.

Ivan Tan, Chairman of Shell Malaysia and Senior Vice President for Upstream Malaysia, said: “Taking FID for GKGJE Phase 4 reaffirms Shell’s continued commitment to deliver competitive and sustainable projects to meet the world’s energy demands. I would like to thank Petronas, our co-venturers and the government for their support in achieving this milestone.”

The GKGJE project is a joint venture among Sabah Shell Petroleum Company and Shell Sabah Selatan, ConocoPhillips Sabah, Petronas Carigali, PTTEP Sabah Oil Limited, PT PERTAMINA Malaysia Eksplorasi Produksi and others.

On a related note, the first oil delivery for an earlier phase of the project, Phase 3, was achieved on schedule earlier, on 31 July 2022. Phase 3 consists of two oil producer and two water injection wells to enhance the recoverable oil volumes from the field.

Petronas also confirmed this milestone in a statement on Monday, saying that the four wells will add around 25,000 barrels per day to GK’s existing production capacity once fully completed in 1Q 2023.

Located in water depths of 1,200 meters, Gumusut-Kakap was the first deepwater offshore project for Shell in Malaysia and began production via the GK-Semi FPS in 2014.

The Phase 2 development involved the incorporation of four additional subsea tieback wells to GK-Semi FPS and was completed in 2019. It achieved its first oil in August 2019.

This is Shell’s second FID for a project in Malaysia made in a month. Namely, the company in early September announced plans to develop the Rosmari-Marjoram gas project located offshore Sarawak with expectations to reach the first gas in 2026.