Deepwater drilling for oil in Malaysian waters is moving into high gear with the arrival of specialised drillships in the coming months, analysts said.
Yesterday Petronas Carigali Sdn Bhd’s head of deepwater development Rosli Hamzah was quoted in Singapore as saying that Transocean Ltd’s drillship Deepwater Expedition would arrive in Malaysian waters in September, while the second ship Frontier Phoenix was scheduled to be in by November.
“The average day rates for drillships capable of operating at depths over 4,000 ft (1.2km) are presently around US$425,000 a day. This is above semi-submersible day rates of US$309,000 and US$399,000 a day,’’ AmResearch analyst Alex Goh said yesterday.
Transocean is the world’s largest offshore drilling contractor with 139 mobile offshore drilling units plus three ultra-deepwater units under construction.
Rosli said Malaysia needed three drillships between 2010 and 2015 as deepwater areas will make up for as much as 40% of the country’s oil output in 10 years.
Currently deepwater accounts for 4% of Malaysian oil and gas production that totalled about 1.6 million barrels of oil equivalent a day.
Crude oil production stood at about 657,000 barrels a day, down from more than 750,000 barrels a day a few years back.
Deepwater exploration and production (E&P) is a relatively new venture in this region. Deepwater project often refers to drilling activities at depth of 1,000 ft below the oceon floor.
With crude oil price in the international market keeping above US$70 per barrel, this previously prohibitively expensive and risky venture appears to be the main part of Petronas’ gambit to boost the country’s stagnant domestic oil reserves of 20 billion barrels of oil equivalent.
The drillships’ arrival, according to AmResearch’s Goh, highlighted Petronas’ commitment to re-direct capital expenditure to its home market. As it is, the first deepwater oil production in the country, known as Kikeh field 110-km off the Sabah coast, started production about three years ago.
Recent reports suggested that development activities at the Gumusut and Kakap fields are picking up pace, and the two fields are targeted for production in 2012.
Meanwhile, early estimate showed the next three deepwater fields in Malikai, Kebabangan and Jangas would cost a further RM13bil to develop, CIMB Research said in a recent review on the industry.
Petronas has budgeted RM40bil on capex for the year ending March 31, 2011, and some estimate suggested that RM11bil would be spent on deepwater projects over the next few years.
Source : The Star
