A joint venture comprising Malaysian services companies Petra Energy and Uzma has been awarded a conditional contract to explore and develop any discovered oil and gas at onshore permit SK433 in Sarawak, East Malaysia.
Petra will be the operator and the contract, awarded by Sarawak's state-owned petroleum company Petros, has a total duration of 29 years.
Phase one of the contract is for four years with an option to extend for another year, and covers exploration and appraisal activity.
If phase one is successful, phase two would involve development and production activities.
Block SK433 is located in the Miri-Marudi area in northern Sarawak and contains a discovery called Adong Kecil.
Petra Energy said the risk factors affecting the contract "comprise the usual exploration, development and production risks for a petroleum contract, which Petra Energy will take appropriate measures to minimise".
Petra said it was in a good position to undertake the contract, after having had experience in upstream field development and production in the Kapal Banang Meranti Small Fields Risk Service Contract since 2012. It also undertook the operations and maintenance of the Banang oilfield offshore Terengganu, as a continuation of the RSC, under a Technical Services Agreement with Petronas.
Uzma brings expertise and experience spanning sub-surface knowhow, well services capabilities and production optimisation.
Uzma also has capabilities in hydrocarbon production, having had experience from heavy oil fields in Inner Mongolia and marginal field operations in the Tanjung Baram SFRSC project, added Petra.
There is no financial value attached to the contract because it is based on production of the asset, added Petra.
The award followed a competitive bidding exercise managed by Petros earlier this year of blocks SK433 and SK334, the company said.
The Office of the Chief Minister of Sarawak issued a statement saying the state government had endorsed the conditional award of Block SK433, and that it signified the “operationalisation” of the state government’s control of oil, mining and exploration in all the onshore areas of the state, pursuant to a commercial settlement agreement between the state and Petronas on 7 December last year.
Petros was quoted as saying: "The successful investor met the technical and financial essential capability requirements and has also submitted an acceptable bid of work programme of activity commitments aimed at rejuvenating exploration and production activities for the Block SK433 contract area."