Petronas awards production sharing contract for Sabah block

Petronas has awarded a contract for a partnership including ConocoPhillips Sabah Gas Ltd and Shell Energy to extract natural gas from a block in Sabah.

A partnership comprised of the two firms and Petronas’s upstream unit will operate a block measuring 1,046-sq km located near key discoveries such as Kebabangan, Kinarut and Erb West, the company said today.

ConocoPhillips will operate and own 40 per cent of the block, while Shell Energy Asia Limited and Petronas Carigali will own 30 per cent each. Petronas gave no probable reserves or value of the contract.

Petronas, which concluded a US$5.3 billion (RM16 billion) takeover of Canada’s Progress Energy Resources Corp , has seen earnings fall as production declines due to natural field depletion and operational challenges.

Petronas made seven new oil discoveries and inked two production sharing contracts in Malaysia in the quarter ended September 30, when net profit fell more than 21 per cent to RM12.4 billion as production in Sudan remains on hold.

It has collaborated with partners such as Exxon Mobil Corp and Shell to derive more oil from marginal fields, in a bid to meet the government’s goal of attracting US$444 billion in investment by 2020. — Reuters