PETRONAS, Malaysian government sign HOA to expand oil and gas sector

World Oil Staff February 23, 2023

(WO) — PETRONAS and the Sabah State Government have signed a Heads of Agreement (HOA) for the potential acquisition of a 50% participation interest in the Samarang Production Sharing Contract (PSC). The Samarang field, located approximately 50 km offshore Sabah, Malaysia, is a producing asset that encompasses key oil and gas hubs in the region.

The agreement was signed between PETRONAS Carigali Sdn Bhd (PCSB) and SMJ Sdn Bhd (SMJSB), a company wholly-owned by the Sabah State. The HOA paves the way for SMJSB's potential acquisition of the participation interest in the Samarang PSC.

The signing ceremony was witnessed by PETRONAS President and Group Chief Executive Officer, Datuk Tengku Muhammad Taufik, Sabah Chief Minister, Datuk Seri Panglima Haji Hajiji Haji Noor and Sabah Finance Minister, Datuk Seri Panglima Masidi Manjun. According to Datuk Tengku Taufik, the partnership with SMJSB underscores PETRONAS' efforts to build a more inclusive environment for the oil and gas industry in Sabah, both offshore and onshore.

The Samarang PSC currently produces approximately 36,000 boed for both oil and gas. The gas is delivered to customers in Kota Kinabalu and Labuan. PETRONAS' continued commitment to the Commercial Collaboration Agreement aims to develop and unlock the full potential of Sabah's oil and gas industry.

On Feb. 15, PCSB and E&P Malaysia Venture also signed a Letter of Understanding with SMJSB on the back-in option arrangement on the Block SB409 PSC, giving the Sabah State Government up to 20% participating interest upon completion of work commitment or commercial discovery, whichever is earlier.

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