Hibiscus Petroleum added that Carnarvon Hibiscus
KUALA LUMPUR: Hibiscus Petroleum Bhd
has received consent from Petronas Carigali Sdn Bhd to acquire Royal Dutch Shell's 50% participating interest in the 2011 North Sabah enhanced oil recovery (EOR) production sharing contract (PSC).
CUrrently, the PSC is operated by Sabah Shell Petroleum Co Ltd, in partnership with Shell Sabah Selatan Sdn Bhd and Petronas Carigali. The Shell units each own 25% stake in the contract.
Under the terms of a conditional agreement signed in October last year, Hibiscus' indirect unit SEA Hibiscus Sdn Bhd would buy the 50% stake from Shell for US$25mil and assume the role of operator of the PSC.
In May this year, Hibiscus said Petronas Carigali had given the go-ahead for Shell to sell its stake in the PSC, subject to certain conditions which Shell was reviewing.
The PSC comprises four producing oil fields and associated infrastructure as well as pipeline infrastructure and the Labuan Crude Oil Terminal.
Total oil production averaged about 18,000 barrels a day in 2015. The PSC provides long-term production rights until 2040 with identified future development opportunities.
"The Proposed Acquisition is in line with the Group’s strategy to invest in profitable development and producing business operations in core geographical areas of interest. The North Sabah EOR can provide the Group with immediate access to proven and probable oil and gas reserves with future potential upside," said Hibiscus in a statement.
Currently, Hibiscus' main operating asset is a 50%-stake in the Anasuria Cluster, a concession in the North Sea off the UK, which was acquired in March 2016.
The group is optimistic that oil prices will increase or remain at the current level in the near to medium term, supporting its performance as it increases production in the Anasuria Cluster.
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
