Sabah formalises 50% stake in Samarang PSC

KOTA KINABALU: Sabah has formalised the acquisition of 50% participation interest in the Samarang Production Sharing Contract (PSC) with the signing of the joint operating agreement (JOA) on Tuesday (April 4).

The agreement with PETRONAS Carigali Sdn Bhd (PCSB) was a follow-up to the heads of agreement (HOA) signed earlier in Feb 22 between state-owned SMJ Sdn Bhd (SMJSB) and PCSB witnessed by Chief Minister Datuk Seri Hajiji Noor (pic) in Kuala Lumpur.

Both parties also agreed on the terms in the document inked, where PCSB will continue as the operator for Samarang PSC with SMJSB as non-operating partner, said Hajiji in a statement on Tuesday (April 4).

"I commend all parties for expediting the signing of this deal, and Sabah will pursue further deals and participation in the state's oil and gas industry," he added.

The acquisition was the second significant development between PCSB and SMJSB, following the commercial collaborative agreement (CCA) signed between PETRONAS and the Sabah state government on Dec 7, 2021.

PCSB is the operator and prior to the JOA, held 100% participation interest under the Samarang PSC since 1995, and has signed a supplementary PSC agreement with PETRONAS in 2018 to extend the PSC operations until Dec 31, 2035.

Under the new agreement, SMJSB would be receiving 50% of partners' entitlement from oil and gas production of approximately 36,000 barrels of oil equivalent per day (boe/d).

The Samarang PSC has seven existing oil and gas producing fields namely Samarang, Samarang Kechil, Sumandak, Zuhal, Alab, Erb West and Kinarut, and two gas-receiving terminals in Kota Kinabalu and Labuan Island.

Earlier this year on Jan 9, SMJSB had also signed a HOA with PETRONAS Chemicals Group Bhd (PCGB) for the acquisition of 25% interest in the Sabah Ammonia Urea (Samur) petrochemical plant.

SMJSB had also inked a letter of understanding (LOU) on the back-in option arrangement for Block SB409 PSC, giving the state-owned entity up to 20% participation interest upon completion of the work commitment or commercial discovery, whichever is earlier.