State player Petronas has said oil production has started on the second small field of the three-field cluster oil development off peninsular Malaysia.
The Kuala Lumpur-headquartered oil and gas company said that oil production had started at the Banang field in mid-July and was generating around 6000 barrels in daily output.
The Kapal, Banang and Meranti (KBM) cluster has already been producing from the Kapal field since it came on stream last December.
Banang is producing to a single mobile offshore production unit, one storage tanker with around 600,000 barrels storing capacity, one well bay module and one flexible flow line.
The KBM project is the third Malaysian marginal oilfield to enter production through a risk service contract where the state oil company gives a private player a fixed fee and a share of the profits in return for paying exploration costs.
Cepsa-owned Coastal Energy and domestic partner Petra Energy are providing the upfront development capital and carrying out the development drilling and production of the KBM fields in exchange for a remuneration fee and recovery of costs, while Petronas remains the owner of the project.