KOTA KINABALU: Sabah’s strategy to restructure one of its overseas energy investments has delivered another major return for the state, securing a further 10 years of contracted income through the extension of the FPSO Ratu Nusantara charter in Indonesia until 2036.
The floating production vessel, operating at the Bukit Tua oil field offshore East Java, generates long-term revenue for the state through Sabah International Petroleum (SIP) and its subsidiary, PT M3 Ketapang Sejahtera.
The latest agreement ensures the investment will continue contributing to the state well into the next decade, said SMJ Energy Sdn Bhd (SMJE) in a statement.
It said that the extension also marks another milestone in the transformation of SIP under SMJE.
It revealed that when SMJE assumed responsibility for the company, SIP faced significant financial challenges that required a comprehensive restructuring.
Through disciplined financial management and a long-term commercial strategy, SMJE restored the company's financial health, eliminated its borrowings and repositioned it as a profitable energy investment that now generates sustainable returns for Sabah, it said.
Sabah's Finance Minister and SMJE chairman, Datuk Seri Masidi Manjun, said the contract renewal was earned through performance rather than entitlement as it was not handed to them, but obtained through commercial performance and operational excellence.
“By turning around SIP, SMJE did more than revive a state-owned company. We transformed it into a strategic asset that continues to generate long-term value for Sabah.
“This renewal shows that Sabah can successfully own and manage world-class energy assets while ensuring the benefits flow back to our people,” he said.
The contract exchange ceremony was held in Jakarta on July 10 and officiated by the Head of Indonesia's upstream oil and gas regulator (SKK Migas), Djoko Siswanto.
The decision to renew the charter reflects more than 11 years of consistent performance.
Since the contract was first awarded in 2012, FPSO Ratu Nusantara has achieved first oil, secured an earlier extension during the global pandemic and recorded more than 2.7 million man-hours without a single lost-time injury.
This track record gave SKK Migas and Petronas company PC Ketapang II Ltd the confidence to extend the charter for another decade.
For SMJE, the extension secures another ten years of contracted revenue, providing a stronger platform to pursue future strategic investments that will continue creating long-term value for Sabah, said Masidi, adding that its impact extends beyond financial returns.
He said while the investment generates income for Sabah, FPSO Ratu Nusantara is operated entirely by an Indonesian offshore workforce, creating skilled employment and strengthening a partnership between Malaysia and Indonesia that has grown over more than 13 years.
Both sides expressed their commitment to exploring broader opportunities for cooperation in the energy sector in the years ahead, he said.
