Petronas farms out key Malaysia producing asset

Malaysia’s national upstream company Petronas Carigali has signed a deal with SMJ to farm out a half share in the Samarang production sharing contract offshore Malaysia.

Petronas Carigali will continue to operate the Samarang PSC with SMJ on board as the sole partner. The Samarang field, which is located approximately 50 kilometres off the coast of Sabah is currently producing approximately 36,000 barrels of oil equivalent per day. The 134 million cubic feet per day of gas output is part of the supply for customers in the state capital Kota Kinabalu and in Labuan.

SMJ, a company wholly owned by the Sabah state government, is acquiring a 50% non-operated interest in Petronas Carigali’s Samarang PSC, which Petronas earlier said includes “key oil and gas hubs in Sabah”. The mature Samarang field was discovered back in 1972 and came onstream three years later.

Finalisation of the farm-out is currently pending regulatory approvals and fulfillment of conditions precedent.

Petronas on Wednesday said the farm out agreement marks the second significant development between the duo following the Commercial Collaboration Agreement signed in December 2021 between Petronas and the Sabah state government.

The farm out agreement was signed Petronas Carigali’s chief executive Hasliza Othman and SMJ’s chief executive Dionysia Aloysius Kibat. The companies in March had inked a Heads of Agreement to confirm the Sabah player’s participation in the PSC.

“This collaboration bears testament to Petronas’ continuous commitment to achieving its shared aspiration of sustainable growth for the domestic oil and gas industry,” commented Malaysia’s national energy giant.