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Kuala Lumpur: Sabah has entered a deal with Petronas and a venture company that will allow it to secure up to 20-percent production stake in the energy company’s 14,555sq km exploration block in the state’s southwest.

The Sabah Government has signed a Letter of Understanding (LoU) with Petronas Carigali Sdn Bhd (PCSB) and E&P Malaysia Venture (EPMV) on the Back-In Option arrangement on Block SB409 Production Sharing Contract (PSC).

With the signing of the LoU, the Sabah State Government through its wholly-owned company SMJ Sdn Bhd (SMJSB) will be offered a Back-In Option of up to 20 per cent participating interest, exercisable upon completion of work commitment or commercial discovery, whichever is earlier.

Situated offshore South West Sabah covering 14,556 sq km of area, Block SB409 was awarded to PCSB and EPMV by Petronas during the 2022 Malaysia Bidding Round (MBR).

The LoU was signed by SMJSB Chief Executive Officer, Dr Dionysia Aloysius Kibat, Puan Hasliza Othman, CEO PCSB and EPMV Head, Aliff Anwar at the Kuala Lumpur Convention Centre here today.