Shell, Petronas Carigali, Petros Get Hold of Offshore Block in Sarawak, Malaysia

OE Staff July 28, 2021

Illustration only - An offshore field in Malaysia - wanfahmy

Malaysia's Petronas has awarded Block SK437 offshore Sarawak, Malaysia to Petronas Carigali, Sarawak Shell Berhad, Petroleum Sarawak Berhad (Petros).

Block SK437 is located to the southwest of the prolific Central Luconia province, measuring 2,015 square kilometers in size and in water depths of up to 50 meters.

"The award of this block is expected to bolster exploration activities in the country and in particular off the coast of Sarawak," Petronas.

Petronas Senior Vice President of Malaysia Petroleum Management Mohamed Firouz Asnan, Mohamed Firouz said, "During its 130 years in Malaysia, Shell and other partners have built a legacy of milestones that contribute to the success of the country's oil and gas industry. It is our hope that this new partnership with PSEP and PCSB in Block SK437 would bring the industry to greater heights through complementary strengths and capabilities."

"We also welcome [Petros] first involvement in an offshore exploration PSC, expanding its current portfolio with participating interests in producing PSCs of MLNG and Kumang Cluster. "

Shell will operated the offshore block with 85% stake, while Petronas Carigali and Petros will own a 7.5% each and the duo will be carried during the exploration phase.

"SK437 is a new addition to Shell's existing interests in 15 PSCs in Malaysia, of which eight are located off the coast of Sarawak, whilst the remaining seven are located off the coast of Sabah," Petronas noted.

Worth noting, Shell said in March it was exploring options to sell its non-operated interests in the Amended 2011 Baram Delta EOR Production Sharing Contract (PSC) and the SK 307 PSC, offshore Malaysia. The assets located offshore Sarawak, Malaysia, are operated by Petronas Carigali and Sarawak Shell Berhad is a non-operating partner. Reuters reported last week that Shell had launched the sale of those stakes.

Petronas on Wednesday also called for interested parties to take part in Malaysia Bid Round 2021 (MBR 2021) which is currently ongoing with the bid submission deadline set on September 3, 2021.

"With 13 exploration blocks being offered, the MBR 2021 is set to open up more investment opportunities for investors to explore and monetize hydrocarbon resource potentials in Malaysia," Petronas said earlier this year when launching the licensing round.