Kuala Lumpur: Sabah is clearing the way for a potential acquisition of 50 per cent participating interest in the Samarang Production Sharing Contract (Samarang PSC) following the signing of the Heads of Agreement (HoA) between SMJ Sdn Bhd (SMJSB) and Petronas Carigali Sdn Bhd (PCSB).
Witnessing the signing ceremony at the Malaysian Petroleum Club, Petronas Twin Towers here Wednesday, Chief Minister Datuk Seri Hajiji Noor congratulated both parties, saying this is another significant development for Sabah.
The Samarang PSC HoA signing came on the heels of last Wednesday’s Letter of Understanding (LoU) deal on the back-in option arrangement for Block SB409 Production Sharing Contract giving the Sabah State-owned entity up to 20 per cent participating interest upon completion of work commitment or commercial discovery, whichever is earlier.
SMJSB had also signed a HoA with Petronas Chemicals Group Bhd (PCGB) for the acquisition of 25 per cent participating interest in the Sabah Ammonia Urea (Samur) petrochemical plant on Jan 9.
Signing on behalf of SMJSB was Chief Executive Officer Dr Dionysia Aloysius Kibat, while PCSB was represented by Hazliza Othman who is the Chief Executive Officer of PCSB.
Also present at the signing ceremony were Petronas President and Group Chief Executive Officer Datuk Tengku Muhammad Taufik, Senior Vice President Malaysia Petroleum Management (MPM), Petronas, Mohamed Firouz Asnan, Sabah Finance Minister Datuk Seri Masidi Manjun and Sabah State Secretary Datuk Seri Sr. Safar Untong.
PCSB is the operator and currently holds 100 per cent of the participation under the Samarang PSC since 1995 and has signed a supplementary PSC agreement with Petronas in 2018 to extend the PSC operations until Dec 31, 2035.
Both parties will work to finalise a farm-out agreement in which SMJSB will assume a non-operating role in the Samarang PSC partnership. The Samarang PSC has seven existing oil and gas producing fields, namely Samarang, Samarang Kechil, Sumandak, Zuhal, Alab, Erb West and Kinarut and two gas receiving terminals in Kota Kinabalu and Labuan Island.
SMJSB would be receiving 50 per cent of partners’ entitlement from oil and gas production of approximately 36,000 barrels oil equivalent per day (kboe/d) and will be a 50 per cent co-seller of natural gas to existing gas customers in Kota Kinabalu and Labuan.
The signing of the HoA and the potential acquisition of the 50 per cent participating interests in Samarang PSC would be the second significant development after the signing of the Commercial Collaboration Agreement (CCA) between Petronas and the Sabah State Government on 7 December 2021.
