Sabah International Petroleum is upbeat
Published on: Thursday, July 25, 2019
By: David Thien
KOTA KINABALU: Not many Sabahans know or have heard of Sabah International Petroleum Sdn Bhd whose chairman is the Chief Minister of Sabah.
According to its Technical Director, Eur Ing Andrew Waterson, Sabah International Petroleum Sdn Bhd will soon settle repayment of its loan to the Sabah Development Bank Berhad by next year. He is very upbeat about the company’s future, having spent years living in Malaysia and married to a Malaysian.
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He and the company’s office and most staff are still based in Kuala Lumpur as the firm originated from there.
Sabah International Petroleum Sdn Bhd was formerly known as M3nergy Bhd when it participated in the earlier edition of the Sabah Oil and Gas Conference and Exhibition here.
M3nergy was also formerly known as Trenergy Bhd, in which Melewar Group held a substantial stake then. It was delisted in 2010 through a management buyout before Sabah Development Bank Berhad took over the loss-making company to recover loan liabilities.
Former Chief Minister Tan Sri Musa Aman headed the wholly-owned oil & gas (O&G) outfit of Sabah Development Bank Bhd, which intended to participate in the development of oilfields off Sabah. M3energy had secured two FPSO vessel charter contracts from Petronas.
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Like Air Asia, M3nergy Bhd got loans from Sabah Development Bank Bhd, before the then State administration acquired the company to be playing a role like what Petros is doing for the Sarawak government.
Petroleum Sarawak Berhad (Petros) is a oil and gas exploration firm established and owned by Sarawak Government.
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After GE14, Malaysian federal government changed hands. On May 22, 2018, Petronas responded to Sarawak state attorney-general that it disagrees that Petronas need to apply license from Petros to operate in Sarawak waters.
On 4 June 2018, Petronas filed a suit in the Federal Court in order to assert its position as the exclusive owner of Malaysian oil resources (including Sabah and Sarawak) and the 1974 Petroleum Development Act is still valid.
On June 22, 2018, the Federal Court denied Petronas application to start legal proceedings against Sarawak because the case is not within the jurisdiction of the Federal Court.
On July 10, 2018, Sarawak state assembly passed the Oil Mining (Amendment) Bill (2018) in order to regulate oil and gas activities in the state.
All oil and gas companies operating in Sarawak waters would be given grace period until the end of 2019 to comply with Oil Mining Ordinance 1958.
After the change of Sabah Government, current Chief Minister Datuk Seri Panglima Shafie Apdal now headed the restructured leadership of Sabah International Petroleum Sdn Bhd.
Sabah International Petroleum Sdn Bhd, a wholly-owned oil & gas (O&G) outfit of Sabah Development Bhd wants to bid to explore for more oilfields off Sabah.
“Sabah International Petroleum Sdn Bhd is important to the state. The company will be a platform for Sabah to be involved more in upstream O&G activities,” said a leader as Sabah own companies have lagged behind in terms of O&G activities.
“There are lots of oil awaiting exploration and development off Sabah. Petroliam Nasional Bhd (Petronas) is helpful. It is looking at those opportunities which may be made available to Sabah companies.”
“It doesn’t mean that Sabah International Petroleum Sdn Bhd can go to Petronas to ask for contracts.”
Petronas practises open tender to award contracts.
Previously, Sabah Development Bank Berhad had also been providing bridging financing for M3nergy like for FPSO vessel that has cost US$250 million (RM815 million) to US$300 million to buy and convert the old Aframax tanker renamed ‘Ratu Nusantara’.
The FPSO is anchored at Bukit Tua field on a five-year contract with Petronas Carigali Ketapang II Ltd (PCK II), with an option of two years’ extension which is expected to contribute half of the company’s revenue which is expected to provide a new income stream going forward for the firm.
Bukit Tua field is off east Java Island, Indonesia. The oilfield is operated by PCK II, a joint venture between Petronas, which holds an 80 per cent stake, and PT Saka Ketapang Perdana, which owns the remaining 20 per cent.
The firm used to own two FPSO vessels and one floating storage offshore (FSO) vessel in the face of softening crude oil prices and slowdown in the upstream O&G sector. M3nergy used to operate an oilfield in Ujong Kulon, Indonesia, under a production-sharing contract.
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