Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

Idemitsu Kosan Co has acquired interests in two oil and gas blocks located off the coast of Sarawak in Malaysia from South Korean SK earthon, and signed production sharing contracts (PSC) for the developments.

The acquired interests are for the Block SK427, awarded under Malaysia Bid Round (MBR) 2021, and the Ketapu Cluster, awarded under MBR Plus Round I.

Idemitsu acquired 40% stake, and as a result, the company secured the right to explore, develop, and produce oil and natural gas in the blocks proportionate to its participating interests.

The PSC for the blocks was signed with Petroliam Nasional Berhad (PETRONAS), a national oil company in Malaysia, Petroleum Sarawak Exploration and Production, a subsidiary of Petroleum Sarawak Berhad (PETROS), a state-owned oil and gas company in Sarawak PSEP,  and SK earthon.

Idemitsu is currently conducting oil and gas upstream business in Vietnam and Norway as our main focus areas.

“We expect that this acquisition in Sarawak, Malaysia, where multiple oil and gas fields have been discovered and developed historically to serve as a foothold for us to establish a new core.

“In the blocks participated in this time, several promising structures have been identified by the subsurface data acquired in 2023, and Idemitsu will continue to contribute to mature the possibility towards the development phase through collaboration with its partners in the evaluation and drilling of exploration wells,” Idemitsu said.

Idemitsu conducted the acquisition via its subsidiary Idemitsu Sarawak E&P. With respect to the exploration project expenditure of the interests, Idemitsu Sarawak plans to receive an investment from the Japan Organization for Metals and Energy Security covering up to 50% of the expenditure that Idemitsu Sarawak will bear in the future.

“By participating in the blocks in Malaysia, in which PETRONAS is also providing cooperation, we aim to further expand oil and gas upstream activities using the blocks as a foothold while also actively attempting and pursuing carbon-neutral initiatives in the region, including carbon capture and storage (CCS),” Idemitsu said.

SK earthon is the operator of both blocks with 45% working interest, with partners PSEP and now Idemitsu Sarawak holding 15% and 40% in the developments, respectively.

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