Petronas tempts FPSO players with new Malaysia offshore opportunity

Malaysian national oil company Petronas has launched a pre-qualification exercise for a floating production, storage and offloading vessel required at its Sepat full-field development offshore Peninsular Malaysia.

The Malaysian operator is seeking to lease an Aframax-sized FPSO vessel, with an oil production capacity of at least 30,000 barrels per day, multiple people familiar with the bid process told Upstream.

Leading Malaysian and local “bumiputra” companies are likely to chase the FPSO project, one person noted.

Bumiputra is a designation for companies that are majority-owned by Malaysian shareholders. Some of the key contenders that could be eyeing the FPSO tender include MISC, Bumi Armada, MTC, HBA Future Energy and possibly one or two outsiders like T7 Global, another one suggested.

The bidding process is still in its early phase with more clarity on potential bidders likely to emerge in the coming months, sources said. Assuming the pre-qualification meets Petronas' approval, it is possible that an invitation to tender could be issued to its preferred bidders before the end of 2024, industry sources said.

A number of Petronas FPSO tendering processes have not completed in recent years, but there is some optimism that Sepat could go the distance to award, a third person suggested.

Redeployment of an existing FPSO is likely to be high on Petronas' wishlist. While there are a number of stacked, or idle, FPSOs in the region that could be suitable for Sepat, competition for quality redeployment vessels is tight, including in Malaysia where ConocoPhillips is developing the Salam Patawali project.

Upstream has requested comment from Petronas about its further plans for the Sepat redevelopment.

Sepat development

The Sepat field offshore Terengganu is already producing through an early production system that started more than 10 years ago.

That system comprises a mobile offshore production unit, and a floating storage and offloading vessel.

The concept for the full-field development has swung from an FPSO to an FSO and has now swung back to three wellhead platforms connected to an FPSO, sources told Upstream.

Subsea pipelines will connect the wellhead platforms to the FPSO, while gas production of a maximum 35 million cubic feet per day will be reinjected and/or used for gas lift.

A conceptual engineering contract for the Sepat redevelopment was performed by MMC Oil & Gas Engineering, sources told Upstream.

The Sepat field is understood to be located in a water depth of 65 metres in Block PM313 about 130 kilometres east of Kuala Terengganu.

It is understood oil was discovered at the Sepat field in 2003.

Kelidang floater

Petronas is separately carrying out the tender process for a leased FPSO vessel required for its giant Kelidang ultra-deepwater gas project offshore Brunei Darussalam.

The Kelidang FPSO will have a gas handling capacity of up to 450 million cubic feet per day. The Kelidang Cluster fields — Kelidang North East, Keratau and Keratau South West — have combined reserves of several trillion cubic feet of gas plus small amounts of associated liquids that would utilise the floater’s storage capacity.