Monday, 31 October 2011

Petronas: policy to award licences to oil/gas firms stands

Malaysia's state oil firm Petronas said on Friday it has not changed its policy of awarding licences to companies involved in its oil and gas production areas.

Petronas denied a local media report that said it would abolish its licensing system as part of a move to encourage greater competition in the oil and gas industry.

"All companies wishing to commence or continue any business or service related to Malaysia's oil and gas upstream operations and activities must apply for a licence from Petronas," the firm said in a statement.

"This policy... has not changed and applies to all local and foreign company service providers and suppliers," Petronas added.

Saturday, 29 October 2011

Kuantan residents threaten sit-in if rare earth ore arrives

Kuantan folk have threatened to block operations of a controversial rare earth plant by holding a sit-in as claims that Lynas Corp is ready to ship in ore has heightened tension among increasingly nervous residents.

Although the Australian miner has denied any plans to ship in material from its Mount Weld mine, it has also said it is confident of starting operations by the end of the year.

Leaders of local anti-Lynas movements told The Malaysian Insider that after more than six months of lobbying against the RM1.3 billion refinery due to fears of radiation pollution, residents are now threatening to stop the plant at all cost.

“They are threatening to lie down in front of the factory. People are getting nervous and some are planning to move out of Kuantan,” Save Malaysia Stop Lynas chief Tan Bun Teet said.

This is despite the federal government giving its assurance that “there will be no importation of raw materials into the country, and no operational activities will be allowed on site” until Lynas meets conditions set out in July by an international team of radiation experts.

Although none of the community leaders contacted by The Malaysian Insider have planned a sit-in, they also refused to take responsibility over public anger should the government allow Lynas to bring in the ore to Kuantan port.

“I am not in control of the people. If it comes down to that (ore in Kuantan), people have said that they are prepared to sit-in,” said Kuantan MP Fuziah Salleh, who has led protests against the plant.

Andansura Rabu, whose Badar represents Beserah residents living as close as two kilometres away from the plant in the Gebeng industrial zone, said that after last Sunday’s Green Gathering had its police permit pulled at the 11th hour, locals were “getting more tense.”

“Anything can happen,” he said.

PKR vice-president Fuziah said yesterday the Kuantan Port Consortium told occupants of the port area “that Malaysia can expect the rare earth oxide from Mount Weld to arrive in Kuantan by the end of this month.”

Some 1,000 people, led by Fuziah and Bersih chairman Datuk Ambiga Sreenevasan, gathered in Kuantan over the weekend in protest against Lynas.

Lynas has refuted claims of radiation pollution, assuring Kuantan residents they would face “zero exposure.”

It is awaiting approval from the government after submitting its proposals on 11 conditions recommended by an expert review panel from the International Atomic Energy Agency (IAEA).

These include a comprehensive, long-term and detailed plan for waste management that covers decommissioning and remediation.

Tuesday, 25 October 2011

Malaysia's Petronas announces tender in Uzbekistan

TASHKENT, Uzbekistan -- The Malaysian Petronas Carigali Baisun Operating Company, a wholly-owned subsidiary of Petronas Carigali Overseas, has announced a tender for the provision of comprehensive services for the appraisal drilling in 2011-2014 under the PSA to develop gas fields in Boysun investment bloc in the Surkhandarya region in southern Uzbekistan, local media reported.

The report did not specify the parameters of the appraisal drilling program.

The principal directions of the further implementation of the PSA are conducting in-depth evaluation work to open up new and evaluate hydrocarbon reserves in the identified fields.

The bids are accepted until Nov. 21, and it will be summarized in late 2011.

Monday, 24 October 2011

Dayang shares up after Murphy contract extension

Shares of Malaysian oil and gas services provider Dayang Enterprise Holdings Bhd rose as much as 5.3 per cent today after its maintenance services contract with Murphy Oil was extended.

The value of the contract was estimated to range between RM50-RM100 million (US$15.9-US$31.8 million) to provide topside maintenance services.

Dayang shares were up 4.1 per cent to RM1.77 per share as at 0824 GMT, compared to the broader market’s rise of 1.1 per cent. – Reuters

Petronas to award jobs to unlicensed firms, report says

State oil firm Petronas will award contracts to unlicensed energy services companies to encourage greater competition in the oil and gas industry, The Edge weekly newspaper said citing unidentified sources.

The move would be a departure from the current practice where Petronas only hands out jobs to licensed players in certain segments such as oil and gas equipment makers and offshore support vessel operators, the report said.

The liberalisation measure is aimed at drawing more foreign investment to develop Malaysia as a regional energy hub, it added.

Petronas was not immediately available for comment.

The move would expose local energy services companies such as Malaysia Marine and Heavy Engineering Holdings Bhd , Kencana Petroleum and Ramunia Holdings Bhd to competition.

But the change would not apply to the bumiputra vendor programme, where companies controlled by ethnic Malays are given preference under a policy aimed at redistributing national wealth, The Edge said.

Thursday, 20 October 2011

MMHE to Fabricate Topsides and Jackets for Exxon's Project, Offshore Malaysia

ExxonMobil Exploration and Production Malaysia Inc. (EMEPMI), a subsidiary of Exxon Mobil Corporation, has signed a RM236 million contract with Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) to fabricate facilities for the Telok Gas development project in offshore Terengganu.

Its chairman and president Hugh W. Thompson said MMHE will fabricate and construct the topsides and platform jackets for the project operated by ExxonMobil.

“The project will involve installation of two gas satellite platforms, Telok A and B, tied back to the existing Guntong gas hub and the installation of facilities is planned to commence in the third quater of 2012,” he said in his speech at the contract signing ceremony here today.

He said 14 development wells are planned in the project which is expected to start in the first quarter of 2013.

”This will provide additional supplies for Malaysia’s power and industrial needs and also help promote the overall growth of the natural gas sector,” he added.

Thompson said an estimated 1,400 workers will be involved in various aspects of the fabrication, project management and support services at the yard and at the site and main offices.

“The fabrication work will take appoximately 18 months and during this period, we expect that the presence of the large project workforce will also be contributing towards the local economy,” he said.

At the ceremony Thompson represented EMEPMI while MMHE was represented by its managing director-cum-chief executive officer Dominique De Soras.

De Soras in his speech said the project comprises two topsides and two corresponding jackets supporting the platforms.

“The topsides, known as Telok A and Telok B, are unmanned facilities wellhead topsides with an estimated weight of 1,735 metric tonnes (MT) and 1,648 MT respectively.

“Both topsides are expected to produce 450 million standard cubic foot (MSCF) of gas per day in the Telok field offshore peninsular Malaysia (Terengganu),” he added.

CSWIP Welding Inspector 3.1 course at Shah Alam

We will conduct CSWIP Welding Inspector 3.1 at Shah Alam in November. Details regarding the course are as follow :

Date :
14 ~ 18 November 2011

9.00am ~ 5.00pm

Exam date:
21 November 2011

K9/9 SEC 9
(Behind Concorde Hotel)

Course fee & exam (initial) :
RM5,000 only

Lecturer :
From TWI

Please feel free to email us at for further clarification.

Many thanks & best regards

Wednesday, 19 October 2011

Traditional owners meet Malaysian gas chiefs

Traditional owners from the Port Curtis Coral Coast Native Claimant Group travelled to Kuala Lumpur recently to meet with Petronas senior executives.

Gladstone resident Tony Blackman was among the delegation, which was led by Mackay-based Mal Walker. Santos Australia representatives also attended.

The delegation was briefed on the $16 billion GLNG Gladstone Project.

They were also given a tour of the Petronas LNG plant in Bintulu Sarawak - the largest stand alone LNG plant in the world.

Mr Walker said the visit could signal massive employment, training and business opportunities for Queensland's indigenous people.

"Everyone will benefit - not just Murris, all people."

"After meeting the senior executives of Petronas at the official launch of the GLNG project on Curtis Island in May this year we were extended a personal invitation to meet with them in Malaysia, to see for ourselves what impact the plant may have on our traditional lands.

"Additionally, Petronas, its partners Santos, Korea Gas and European energy conglomerate Total along with construction contractors Bechtel, have given major undertakings in regard to indigenous employment, training and business opportunities that we wished to pursue on a personal level.'

'Santos, Petronas and partners in the GLNG Project have been considerate of the community's needs, and wish to ensure that this project will leave a positive and lasting legacy, particularly in regard to the traditional owners," Mr Walker said.

Tuesday, 18 October 2011

SILK bags Petronas Carigali jobs

SILK Holdings Bhd unit Jasa Merin (Malaysia) Sdn Bhd has been awarded three long-term charter contracts from Petronas Carigali Sdn Bhd worth RM55.3 million.

In a filing to Bursa Malaysia today, SILK said each contract is for the provision of one Anchor Handling Tug Supply Vessel (AHTSV).

The long-term contracts for two of the vessels, which will commence in October, are for a primary period of one year each, with an option to extend a further year.

The third vessel, to commence in early November, has a two-year primary contract period, with an option to extend another year.

The contracts are expected to contribute positively to SILK's earnings and net assets for the financial years ending July 31, 2012 and July 31, 2013 but will not affect the company's share capital and shareholding structure, it added.

Friday, 14 October 2011

KNM wins US$200m Sri Lanka contractel

Units of Malaysian oil and gas services provider KNM Group Bhd’s have secured a Sri Lankan waste-to-energy plant contract worth US$200 million (RM624 million), the company said in a stock exchange filing today.

The subsidiaries, led by KNM Process Systems Sdn Bhd, will undertake the engineering, procurement, construction and commissioning of the plant in Colombo awarded by Orizon Renewable Energy (Pvt) Ltd.

Orizon is a subsidiary of Malaysia’s Octagon Consolidated Bhd. The construction of the plant will commence in the second quarter of 2012 and will be completed in 2014, Octagon said in an earlier statement.

The project is not expected to contribute positively to KNM’s financial performance until 2012. — Reuters

Heat Exchangers

Function :
A heat exchanger is a piece of equipment built for efficient heat transfer from one medium to another. The media may be separated by a solid wall, so that they never mix, or they may be in direct contact.[1] They are widely used in space heating, refrigeration, air conditioning, power plants, chemical plants, petrochemical plants, petroleum refineries, natural gas processing, and sewage treatment. The classic example of a heat exchanger is found in an internal combustion engine in which a circulating fluid known as engine coolant flows through radiator coils and air flows past the coils, which cools the coolant and heats the incoming air.
Contruction Code & NDT :
Technique Inspection :
Titanium, Stainless Steel, CuNi, AlBrass - Eddy Current
Carbon Steel - IRIS or RFET
In-service defect :
Tube leaking, Erosion, attack at buffer plate area.

Baffle plate normally will give false indication to RFET & Eddy Current. However, please interpreate the baffle plate areas for fretting defect or Ammonia attack.

Wednesday, 12 October 2011

New Petronas training centre in Kimanis

Sabah will be home to a new RM50mil oil and gas training centre in south-western Kimanis about 80km from here.

Petronas is setting up Kimanis Petroleum Training Centre by 2013. Currently, the centre is operating from temporary premises in Membakut Jaya.

The temporary facility was opened yesterday by Foreign Minister Datuk Seri Anifah Aman, who is the Kimanis MP.

Petronas vice-president (exploration and production business) Ramlan A. Malek said: “The centre is another step by Petronas in our efforts to develop the capability here and create a pool of skilled personnel among Sabahans who will participate in and contribute towards the development of the oil and gas industry.”

He said the company hoped that the facility would help qualified Sabahan youths find employment.

At present, he said 25 Sabahans were undergoing training at the Membakut Jaya centre.

Petronas is expecting to spend about RM45bil in large-scale projects in Sabah and these include the power plants in Kimanis and Lahad Datu, an oil and gas terminal, a 512km gas pipeline between Sabah and Sarawak and a fertiliser plant in Sipitang.

Tuesday, 11 October 2011

KNM wins US$200m Sri Lanka contractel

Units of Malaysian oil and gas services provider KNM Group Bhd’s have secured a Sri Lankan waste-to-energy plant contract worth US$200 million (RM624 million), the company said in a stock exchange filing today.

The subsidiaries, led by KNM Process Systems Sdn Bhd, will undertake the engineering, procurement, construction and commissioning of the plant in Colombo awarded by Orizon Renewable Energy (Pvt) Ltd.

Orizon is a subsidiary of Malaysia’s Octagon Consolidated Bhd. The construction of the plant will commence in the second quarter of 2012 and will be completed in 2014, Octagon said in an earlier statement.

The project is not expected to contribute positively to KNM’s financial performance until 2012.

Keppel Mourns Loss of 5 Shipyard Workers

Mr. Mok Kim Whang, President and General Manager of Keppel Subic Shipyard, expressed deep regret over the incident that occurred at the Keppel Subic Shipyard in the Philippines on October 7, 2011 at around 10:20 am in the morning.

The incident occurred at a dock where a vessel was being repaired. A stern ramp fell on a scaffolding underneath a ramp where the workers were working. As a result, five of the workers died while seven were injured.

The injured workers have been sent to the hospital.

Keppel would like to offer its deepest condolences to the families of the victims, and are rendering the necessary assistance to them.

The investigation is still on-going, and Keppel is cooperating with the authorities in the Philippines.

Labuan Shipyard to Build PSV for Tanjung Offshore

The recent signing of a RM100 million contract by Labuan Shipyard Engineering Sdn Bhd (LSE) for the engineering, construction, testing and delivery of a 77m DP2 Diesel-Electric Propulsion Platform Supply Vessel with Tanjung Kapal Services Sdn Bhd (TKS) has placed the company in a better position in the marine and oil & gas industries.

Its chief executive officer, Mohd Azman Nasir, told Bernama Thursday the project, the first to be built in the country, would be designed to transport deck cargo, personnel, consumables and equipment between the offshore platform and shore base. It would also cover the areas of external fire fighting, pollution prevention and rescue operations.

“We are glad to be given such a big role and trust by TKS to undertake the project, this would enable us to play our role in the growth and development of the marine and oil & gas industries of the country,” he said.

The contract, signed on Sept 30, also marks a significant milestone in the continuous business and working relationship between LSE and TKS, he said.

He said LSE would execute the project in accordance with the stringent safety and quality standards and requirements of the marine and oil & gas industries.

This is LSE’s first major marine project designed to serve the upstream oil & gas sector, he said, adding that the company was looking forward to taking on bigger roles in the development of the industry.

Monday, 10 October 2011

Malaysian O&G Firms Secure UK Contracts Worth RM5.2 Million

Nine Malaysian oil and gas firms which participated at the Offshore Europe 2011 exhibition have secured RM5.2 million in contracts for safety equipment and mechanical seals.

In a statement today, the Malaysia External Trade Development Corporation (Matrade) said the contracts included the sale of fire retardant coveralls and safety shoes worth RM5 million.

The exhibition was held from Sept 6-8, in Aberdeen, the United Kingdom.

"An additional RM54.7 million in potential sales are under negotiation through the exhibition.

"The business segments involved are for customised rotating equipment, design, fabrication and packing of components, lubricants, fluids, greases, coolants, oil treatments, software on online vessel business risk management, mechanical seals, gaskets and containers," the agency said.

Matrade also said that Malaysia has gained international recognition and established an excellent track record in the global oil and gas industry.

"As a continuous effort by Matrade to enhance and promote the exports of Malaysian products and services in the oil and gas sector, the agency will be organising similar programmes to Ashgabat (Turkmenistan), Tashkent (Uzbekistan), Basra (Iraq) and Yangon (Myanmar)," it added.

Sunday, 9 October 2011

Production Separator

Function :  Separate between oil, water & gas. 
Slug Catcher : Reduce the effect of slugs (Large gas bubles or liquid plugs)
Construction Code : ASME VIII 
NDT Acceptence Criteria : ASME V & ASME VIII
In-service Defect : Normally at the Inlet & Water Out. Between phase level (water/oil/gas) 

Saturday, 8 October 2011

MHI Receives Large-scale Fertilizer Plant Order To Produce Ammonia and Urea in Malaysia

Mitsubishi Heavy Industries, Ltd. (MHI), jointly with APEX Energy Sdn. Bhd. of Malaysia, and PT Rekayasa Industri (REKIND) in Indonesia, has received an order from PETRONAS Chemical Fertilizer Sabah Sdn. Bhd. (PCFSSB) for a project to construct a large-scale ammonia/urea fertilizer plant. PCFSSB is a subsidiary of PETRONAS Chemicals Group Berhad (PCG), which is an affiliate company of PETRONAS, the national oil company of Malaysia.

The contract was signed today in Malaysia. The plant will be the first large-scale fertilizer plant order from Malaysia in 15 years since1996 when MHI received an order from PETRONAS.

The new urea fertilizer plant will be built in Sipitang, approximately 145 kilometers southwest of Kota Kitabalu, the mercantile city in Sabah State on the Island of Borneo. Using natural gas as its feedstock, the plant will have a capacity to produce 2,100 mtpd (metric tons per day) of ammonia and 3,850 mtpd of urea fertilizer.

It will adopt process technologies from Haldor Tops╬Že A/S of Denmark, Saipem S.p.A. of Italy, and Uhde Fertilizer Technology B.V. of the Netherlands. The plant is slated to go into production in 2015.

The order calls for plant engineering, procurement and construction (EPC). MHI, as leader of the consortium, will be responsible for the basic and detailed design work, the procurement of equipment and the dispatch of technical advisors for installation and test operation. APEX Energy and REKIND will take charge of a portion of the equipment procurement and construction work.

PCFSSB is a company selected by PCG to implement the fertilizer plant construction project and its operation after completion. APEX Energy is a construction company, which locates its head office in Kuala Lumpur, the capital of Malaysia. REKIND is a plant engineering company headquartered in Jakarta, Indonesia.

The Sabah State of Malaysia, which has prospered as a tourist destination and timber supply area, is abundant in natural gas and increasing its interest in fertilizer production as the State seeks higher value from its natural gas resources and pursues advances in industrial development and agriculture. The fertilizer plant construction project is in line with these initiatives.

MHI received an order in 1996 and delivered an ammonia/urea fertilizer production plant to PETRONAS Fertilizer (Kedah) Sdn. Bhd., PF(K)SB, a subsidiary of PETRONAS, in 1999. The high evaluation made by PETRONAS of the operational track record of the PF(K)SB's plant is believed to have led to this new project.

The demand for fertilizer is expected to continue expanding steadily due to rising food production needs in response to global population growth.

In Asia in particular, demand for fertilizer plants is increasing for the replacement of old plants. MHI, building on the strength of this latest large-scale order, now looks to conduct aggressive marketing activities in a quest to boost its presence in the fertilizer plant market in Asia while also targeting orders worldwide in the fields of synthetic gas and petrochemicals.

Friday, 7 October 2011

Hassan Marican appointed director of US oil giant

Tan Sri Hassan Marican, who retired as Petronas CEO last year because of friction with the Najib administration, has accepted another directorship outside Malaysia, this time at US oil and gas giant ConocoPhillips.

Since leaving Petronas at the beginning of last year, Marican has accepted several directorships with Singapore GLCs including at Sembcorp, SembCorp Marine and Singapore Power.

ConocoPhillips said today that Marican was appointed as a new outside director effective December 1, 2011.

Marican was part of the board that had appeared to have clashed with Prime Minister Datuk Seri Najib Razak back in late 2009 over the appointment of a former senior aide as a Petronas director despite the prime minister having absolute powers in board appointments.
It was reported then that the former aide — Omar Mustapha — was rejected twice and was appointed only after Najib had put his foot down.

Petronas had also decided not to sponsor the Malaysian-backed Lotus F1 Racing team, going instead with the Mercedes Formula One team.

Marican was widely credited with turning Petronas into the only other state-run major international player in the oil and gas space apart from Norway’s Statoil.

The former Petronas chief stepped down on February 2010 after 15 years with the company and was appointed a director with Singapore GLC Sembcorp Industries by June.

Marican’s flurry of overseas appointments also come at a time when Malaysia is grappling with a chronic brain drain that threatens to derail its developed country ambitions.

ConocoPhillips is a global integrated energy company. The company is headquartered in Houston with approximately 29,900 employees, US$160 billion (RM506.05 billion) of assets and US$244 billion in annualised revenues as of June 30, 2011.

Thursday, 6 October 2011

NAFAS Plans To Expand Fertiliser Plant In Gurun

The National Farmers Association (NAFAS) plans to implement the second phase of the expansion of its fertiliser plant,Petronas Fertiliser Kedah (PFK) in Gurun, to meet increasing demand.

NAFAS chairman, Tan Sri Abdul Rashid Abdul Rahman said the plant expansion is currently being finalised and is expected to be implemented in the near future.

He said PFK had the capacity to produce 310,000 metric tonnes of fertiliser annually but was producing only 270,000 metric tonnes at present.

"The expansion will almost double the production capacity of PFK," he told reporters after closing a leadership course for children of farmers and the launch of the technical and executive scheme for farmers children(ATTES) at the EDC-UUM here last night.

NAFAS through its subsidiary, Malaysian NPK Fertiliser Sdn Bhd (MNFSB), owns a 80 per cent stake in PFK, while the remaining 20 per cent is held by Petronas Fertilizer Sdn Bhd (PFK). The company is a subsidiary of Petroliam Nasional Bhd (Petronas).

PFK is also the largest producer of fertiliser in South East Asia and is set over 29.14 hectares (72 acres), Abdul Rashid said, while adding, just 30 per cent of the total area, has yet to be developed.

He however declined to state the cost of the plant expansion.

"The aim of the project is to produce quality fertiliser at a competitive price to aid farmers," he said.

Meanwhile, the ATTES is specifically to assist university graduates in the technical field related to agriculture, with the aim of giving them useful experience.

Abdul Rashid said NAFAS had allocated RM200,000 to undertake the pioneer scheme from January next year and it would involve 20 graduates who would be paid a monthly allowance of RM1,200 to attend training for a year.

Wednesday, 5 October 2011

Sembcorp Marine appoints ex-Petronas CEO to the board

(Reuters) - Singapore's Sembcorp Marine has appointed the former CEO of Malaysian oil giant Petronas, Mohd Hassan Marican, as an independent director on its board.

Hassan, an accountant who put Malaysia's national oil firm on the world map, currently serves as a director of Sarawak Energy Berhad, Sembcorp Industries, Singapore Power and Lambert Energy Advisory Ltd.

Tuesday, 4 October 2011

Subsea Manifold

A subsea manifold is a structure which are built to stay in deep water. Normally its was built for deep & ultradeep water ranges  7,000 ft or more. 
Construction Code :- API & AWS 
NDT Spec :- AWS 
Example Company that built this in Malaysia :- Aker

Monday, 3 October 2011

Puncak acquires Global Offshore Malaysia

Malaysian water treatment company Puncak Niaga will fully acquire construction and subsea services company Global Offshore Malaysia (GOM) and pipelay barge owner KGL for $59 million, the company has announced.

Puncak had agreed to spend $23.6 million to acquire a 40% stake in the companies in May this year under an arrangement with Global International Vessels, with an option to acquire the remaining 60% at a later date.

Puncak told Bursa Malaysia Thursday that it had had decided to exercise that option – meaning the two companies would become its subsidiaries with immediate effect.

At the time of its May acquisition, the company said in an announcement that the acquisition would give it a platform for entry into the oil and gas industry.

“With the acquisition ... Puncak Group will have the necessary licences required to undertake oil and gas works in conjunction with Petronas,” it said at the time.

“The acquisition will enable Puncak Group to make further forays into the oil and gas industry which the Group has identified as a sector (in which) it intends to strengthen its presence and emerge as a significant player.”

GOM was awarded the contract for integrated transportation and installation of offshore facilities for the first stake of a pipelay barge contract for Petronas Carigali and a consortium of ten other oil companies, Puncak said at the time.

Labuan-based KGL is the owner of pipelay barge DLB 264.

Sunday, 2 October 2011

Kursus CSWIP Welding Inspector 3.1

Salam semua

Pihak kami akan menjalankan kursus CSWIP WELDING INSPECTOR 3.1 di Shah Alam, Selangor. Sijil kehadiran dan pensyarah adalah dari The Welding Institute (TWI).

Masa dan tarikh adalah flexible.

Yuran kursus dan exam (initial) ialah RM5,000.

Sila email kepada kami untuk pertanyaan dan tempahan. Tempat adalah terhad kepada 10 orang sahaja.

Petra Energy to buy more vessels

Sarawak-based Petra Energy Bhd is looking at buying more work barges, work boats and supply vessels to support its increasing role in the offshore brown field work particularly in the oil and gas hubs in Sabah and Sarawak.

Executive director and chief operating officer Ahmadi Yusoff said the proposed aquisitions would be premised on a right mix of vessel portfolio and growing opportunities in offshore oil and gas operations.

"Depending on the crane capacity, the acquisitions will cost RM100 million per barge to support our current fleet of three workbarges and two work boats," he told a media briefing in conjunction with the Kumang Cluster Onshore Tie-in facilities handing over ceremony here last night.

The project, involving procurement, construction and commissioning of the Kumang Cluster onshore tie-in at the Malaysia LNG Sdn Bhd SC-2 and Bintulu Integrated facilities onshore upgrading and modifications were completed ahead of schedule on Aug 30.

In recognition of its health safety and environment standards, Petra Energy received accolades from Petronas Carigali and MLNG for 835,000 safe manhours achievement for the project earlier this month. Ahmadi, who has been instrumental in the turnabout operations at the Kumang project office here, said currently the group's major contracts include the RM400 million hook-up construction and commissioning (HUCC) contract for Petronas Carigali awarded in December last year.

Another project is the RM1.1 billion Sabah/Sarawak HUCC and major maintenance contract awarded in late 2008.

He said the company's immediate priority was to focus on onshore brown field opportunities in Sabah and Sarawak like in Kimanis (Sabah), Labuan and Bintulu as well as developing hubs in Peninsular Malaysia as part of its expansion plans.

These include opportunities in areas of topside major maintenance and construction; hook-up and commissioning in the immediate and short-term besides marginal and small field redevelopment in the medium to long term.

"We also see strong growth potential in fabrications work for the oil and gas industry," he said, adding that Petra Energy had established a collaboration with Labuan Shipyard and Engineering in Labuan to undertake minor and major fabrication works and had acquired a facility in Tanjung Kidurong here.

The two new yards would complement its current fabrication facilities in Shah Alam and Labuan, he said.

On human capital needs, Ahmadi said the company, currently supported by a professional, technical and contract workforce of about 2,600 personnel based onshore and offshore, would continue to grow its human capital portfolio in the core business areas of its services.

At present, it was working closely with the Dayak Chamber of Commerce and Industry, Sarawak, to assist on youth development, especially in skills training programme, he said.

At the same time, Petra Energy planned to reinforce its partnerships and collaborations with all oil and gas majors in the industry, which were undergoing a transformation phase emphasising on the domestic market, he said.

He was confident the government’s Economic Transformation Programme and Petronas’ focus on rejuvenating existing fields, development and production of marginal fields and intensifying drilling of exploration wells are set to create exponential growth in the industry.

"Petra Energy sees the awarding of new contracts following the new development that will change the landscape as a huge opportunity, especially in making a strong presence in Sabah and Sarawak," he added

Saturday, 1 October 2011


1. (C) In recent weeks we have picked up a number of hints that the long-running dispute between Brunei and Malaysia over delineation of offshore oil exploration zones may finally be nearing a compromise settlement. There has been no exploration activity in the zones, designated as Blocks "J" and "K" by Brunei, since naval incidents that occurred in 2003.

A senior oil industry executive told Ambassador that the head of Malaysian national oil company Petronas recently commented to the CEO of a major American firm that he expected the dispute to be solved this year. Working level contacts at the Ministry of Foreign Affairs and Trade told us that, even though their government is confident it could win any international arbitration over the dispute with Malaysia, it might be willing to forego such arbitration and reach a compromise in order to avoid causing a fellow Islamic country to lose face.

In our view, these talking points have more to do with avoiding a loss of face by Brunei, which has long maintained that it will accept nothing less than total control over the offshore blocks and that the Malaysian claim has no merit.

2. (C) Local oil industry executives have outlined for us the shape that an eventual resolution could take, at a level of detail not heard previously. They foresee a production sharing arrangement that allocates 65-75 percent of oil and gas output by volume (not revenues) from the disputed offshore blocks to Brunei and the rest to Malaysia.

Companies that have signed competing contracts with Brunei and Malaysia would have their contracts honored based on a pro rata calculation of each country's share; for example, a company which had signed a contract with Brunei for 25 percent of the production rights in the disputed zone might end up receiving 25 percent of 75 percent of total output, or 18.75 percent. Royalties, taxes, and the prices charged to third country customers would depend on the terms dictated by the country with which the original contract was signed, either Brunei or Malaysia.

One sticking point may be a decision on which firm will be named as overall operator for the production sharing area, and how much compensation it will receive. French company Total, which has a contract with Brunei for exploration in the disputed zones, is an obvious candidate because of its long presence in the region and experience in deep-water drilling, but others will also be interested.

3. (C) The sudden flurry of activity on this long-standing dispute is probably attributable to the start of offshore production earlier this year by U.S. firm Murphy Oil under the terms of its contract with Malaysia. Murphy's rig is in a Malaysian offshore zone undisputed by Brunei, but is located very near the disputed area and taps a reservoir that probably extends under the area claimed by Brunei.

The large amount of gas located below the oil in this area produces strong pressure that serves to push the reservoir's hydrocarbons towards Murphy's well. Local oil industry executives who briefed Bruneian government officials on this situation told us that the information was a wake-up call on the need for a resolution sooner rather than later, especially in light of high world-wide demand for exploratory rigs and drilling equipment and resulting long wait times for putting such equipment to use in new locations.

The Bruneians have realized that the longer they wait to reach an agreement that allows them to begin drilling in Blocks J and K, the less oil and gas they may ultimately be able to extract. This serves as powerful motivation to get serious in their negotiations with Malaysia and look for a compromise. That motivation is enhanced by the need for Brunei to identify new gas reserves that will underpin the renegotiation of contracts for the supply of Liquefied Natural Gas to Japan, due to expire in 2013.

4. (C) Comment: As we previously reported, the ultimate decision on whether and when Brunei should reach a compromise agreement with Malaysia over the offshore fields will be made personally by the Sultan, which is another way of saying the decision process will be deliberate and opaque. It is entirely possible the hopeful signs mentioned above will amount to naught.

It is in the U.S. interest, however, for a resolution finally to be reached given the stakes involved with the potentially extensive reserves that could be opened for production. We understand that the industry's upper estimates for potential reserves in the J and K Blocks reach up to 5 billion (sic) barrels. If proved, these reserves could help ease the pressure on East Asian oil and gas markets significantly for a long period after production begins and so lessen the likelihood of potential conflict over access to energy resources.

Oil & Gase Production Facilities

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