Sources said Talisman is among those expressing interest in taking over Murphy Oil’s Block PM311, off Peninsular Malaysia.
Murphy owns a 75% operating stake in Block PM311, which is home to two gas discoveries, Pertang and Kenarong, that were until late 2013 being considered for commercial development.
The proposed field development, involving the construction and installation of a central processing platform and a satellite wellhead platform, aims at extracting up to 80 million cubic feet per day of gas ad 1500 barrels per day of condensate from the two gas fields.
First gas from Kenarong-Pertang was said to be targeted to flow from as early as 2016.
However, this is widely expected to slip given the production facilities have yet to be tendered.
Nevertheless, Block PM311 could offer Talisman the opportunity to benefit from near-term production, which ranks high on the Calgary-based independent’s agenda.
Chief executive Harold Kvisle said at a recent results briefing that 70% of Talisman’s planned $3.2 billion capital spending in 2014 will be invested in “near-term, high netback production within two core regions, the Americas and south-east Asia”. To date, Talisman has reiterated its extended commitment towards Block PM3-CAA off Vietnam, while refraining from commenting on any planned asset acquisition in south-east Asia.
However, sources have identified the Canadian independent, with its long track record of exploration and development successes in the region, as a strong candidate to land a brownfield production sharing contract for Block PM9 from Malaysia’s Petronas, and to take over Chevron’s operating interest in Block B off Vietnam.
Each of the three blocks — PM9 and PM311 off Malaysia and Block B off Vietnam — could require investment or more than $1 billion, primarily for field development purposes.
Progress on Talisman’s reported asset acquisition drive has been slow.
Some sources suggest the Canadian independent could still be reviewing its priorities in view of an ongoing rationalisation of its portfolio.
Talisman flagged its intent to let go of another $2 billion worth of assets, though these are likely to exclude any of its producing fields in south-east Asia.
While Talisman appears keen to extend its footprint in the region, Murphy has reportedly begun the process to sell off up to 30% of its Malaysian operations.
In additon to Block PM311, industry observers expect smaller or more mature oil and gas fields off Sarawak could fall under Murphy’s review.
However, Block H, which hosts the Rotan liquefied natural gas project, will not be up for grabs.