KOTA KINABALU: Sabah hopes to continue earning from its collaboration with Shell International Eastern Trading Company (SIETCO) as it extends its one-year Sales and Purchase Agreement (SPA) to three years.
State Finance Minister Datuk Seri Masidi Manjun said through the state-owned SMJ Energy Sdn Bhd (SMJE), Sabah had gained revenue of just under RM580mil through sales of four cargoes of crude oil to date.
"This marks a significant milestone for the company, and we believe there is more revenue to be made," he said, adding that the extension of the SPA makes sense for all parties involved.
Moving forward, he hopes this collaboration would enhance Sabah’s capability to generate more revenue from the oil and gas industry.
Masidi made these remarks during his speech prior to witnessing the signing of the SPA extension between SMJE and SIETCO at the Sabah International Convention Centre here on Monday (May 20).
He stated that Sabah was currently monetizing its crude oil entitlement from the 50% interest in the Samarang Production Sharing Contract (PSC) through this collaboration.
"It has been a fruitful collaboration with smooth and incident-free technical operations as well as regular and prompt monthly revenue," he said.
Masidi noted that in addition to the 50% interest in the Samarang PSC, SMJE also holds a 25% stake in Petronas’ Sabah Ammonia Urea petrochemical plant.
SMJE also had two back-in options to acquire up to 20% participating interest in Block SB409 PSC and Block SB403 PSC, as well as a 10% stake in Petronas LNG9 Sdn Bhd, which operates a liquefied natural gas (LNG) plant within the Bintulu LNG Complex via Sabah International Petroleum Sdn Bhd.
He stated that the operating assets were profitable and generate healthy cash flow for the state government.
"It is with these cash flows that the state is able to diversify its funding sources, optimize the capital structure, and support our growth strategy, where SMJE continues to acquire profitable and producing oil and gas assets," Masidi said.
Given the untapped oil and gas resources, he was confident that Sabah would achieve greater revenue sharing, greater influence, and greater participation in state oil and gas development through the concerted efforts of the state government, stakeholders, and both state and private agencies.
"Sabah is not lacking in learned and experienced people. Those talents who are still outside Sabah are welcome to come back and contribute to the growing demand for experts in the oil and gas industry," he added.
