Malaysia Oil and Gas Projects Advance with Petronas' PSC and Farm-Out Deals

Malaysia’s Petronas has strengthened upstream collaboration in Sabah through a new oil and gas production sharing contract (PSC) award and an equity transfer agreement involving state-linked partners.

Petronas Carigali, a wholly owned subsidiary of Petronas, signed a farm-out agreement to transfer a 20% non-operating participating interest in the 2011 North Sabah Enhanced Oil Recovery production sharing contract to SMJ Energy, which is owned by the Sabah State Government.

Following completion, Petronas Carigali will retain a 30% non-operating interest, while SEA-Hibiscus will continue as operator with a 50% stake.

Separately, Malaysia Petroleum Management (MPM), on behalf of Petronas, awarded the PSC for the Permata Cluster offshore Sabah to Bridge Petroleum Limited, marking the company’s entry into Malaysia as operator of the small-field asset development.

The cluster is estimated to contain about 10 million barrels of oil equivalent of untapped resources, with first production targeted as early as 2029 through subsea tie-back developments.

“These initiatives reflect the State Government’s long-term strategy to strengthen Sabah’s energy sector through high-quality investments and close collaboration with Petronas. With opportunities now expanding across the state from the west to the east coast, we welcome reputable investors to partner with us in ensuring sustainable and lasting benefits for the people of Sabah,” said Sabah Chief Minister Datuk Seri Panglima Hj Hajiji Hj Noor.

Complementing the developments, Petronas and Sabah Energy Corporation exchanged a heads of agreement for gas market arrangements supporting the Mutiara Cluster development, targeting a future gas sales agreement by the first quarter of 2029.

Petronas said additional exploration and discovered resource opportunities will be offered in the Malaysia Bid Round 2026, scheduled for launch on February 10.