The contracts feature oil and gas discoveries located offshore Peninsular Malaysia and off the coast of Sabah.
KUALA LUMPUR: Petroliam Nasional Bhd (PETRONAS) has awarded the production sharing contracts (PSCs) for three Discovered Resource Opportunities (DRO) Clusters and one exploration block offered under the Malaysia Bid Round 2024, which was launched earlier this year.
Covering nine fields and one exploration block, these contracts feature oil and gas discoveries located offshore Peninsular Malaysia and off the coast of Sabah.
Under the Small Field Asset PSC, the Raja cluster, located offshore Peninsular Malaysia, comprising Rhu, Ara and Janglau fields – was awarded to Dialog Resources Sdn Bhd, a full subsidiary of Dialog Group Bhd
while the Erb South field was awarded to EPOMS Sdn Bhd.
Meanwhile, the Ubah Cluster, located off the coast of Sabah and consisting of five fields – Ubah, Rempah, Bagang, Batai and Biris – was awarded to ConocoPhillips Malaysia New Ventures Ltd, Sabah Shell Petroleum Company Ltd, and PETRONAS Carigali Sdn Bhd (PCSB) under the Deepwater Revenue-over-Cost PSC.
In addition, Block PM515, which is an exploration block, was awarded under the Enhanced Profitability Terms PSC to PCSB and E&P Malaysia Venture Sdn Bhd.
The awards were done through Malaysia Petroleum Management (MPM), a governing body entrusted to act for and on behalf of PETRONAS in the overall management of Malaysia’s petroleum resources throughout the lifecycle of upstream oil and gas assets.
Senior vice-president of MPM, Datuk Bacho Pilong said with the strong track records and proven capabilities of these contractors, he is confident they will continue to contribute significantly to the growth of Malaysia’s petroleum sector.
He opined that Block PM515 holds great potential for significant discoveries while the DRO Clusters are primed for accelerated development due to their sizeable resources and proximity to nearby facilities.
“The Ubah Cluster can greatly benefit from integration with the Kebabangan field, especially considering that both are operated by the same contractors – this integration can lead to various synergies and advantages for the operations of both fields,” he said.
He added that 2024 has seen the awarding of 18 PSCs across exploration, DRO and Late Life Asset, which is a testament of investors’ confidence in PETRONAS’ innovative asset offerings with high monetisation potential, solidifying Malaysia’s position as a preferred destination for upstream investments.
Meanwhile, in a filing with Bursa Malaysia, Dialog explained that its unit Dialog Resources will assume 100% participating interest and the role of operator for the Raja Cluster SFA PSC.
“The 14-year contract comes with a two-year pre-development phase that allows Dialog Resources to finalise the field development plan and move into a subsequent two-year development phase with first commercial production expected by the end of the development phase.
“The production phase will continue for the remaining 10 years or up to the expiry of the contract, whichever is earlier,” the group said.
It said the Raja Cluster SFA PSC includes minimum work commitment during the pre-development phase which will encompass a technical feasibility study, 3D seismic data reprocessing, and specialised studies. A field development and abandonment plan will be developed to determine the feasibility and commerciality of the asset and submitted to PETRONAS for approval.
“We will issue a subsequent announcement once the field development and abandonment plan has achieved Final Investment Decision and received approval from PETRONAS,” said Dialog.
The group, which has seen its share price decrease by about 27% over the last six months, said the participation in Raja Cluster SFA PSC is in line with its strategy to continue to expand and diversify across the upstream, midstream, downstream and renewable businesses of the energy sector.
It reiterated its focus and pursuit of diversification across the energy sector to strategically weather different economic and oil price cycles, in line with its goal of generating long term recurring and sustainable income.
Furthermore, Dialog said the contract is not expected to have any material effects on the group’s earnings, net assets and gearing for the current financial year ending June 30, 2025, but it is expected to contribute positively to Dialog’s future earnings.
