50% acquisition of contract to boost Hibiscus Petroleum output
KOTA KINABALU: Hibiscus Petroleum Bhd's acquisition of 50 per cent participating interest of the North Sabah Enhanced Oil Recovery (EOR) Production Sharing Contract (PSC) will significantly boost the Group's oil production and proved and probable (2P) reserves.
The acquisition will more than double the Group's current daily output to about 9,000 barrels of oil per day, reaching 40 per cent of its oil production target of 20,000 barrels per day by 2021.
Hibiscus Petrolum Bhd, through its indirect wholly-owned subsidiary, SEA Hibiscus Sdn Bhd, has completed its acquisition of 50 per cent participating interest from Sabah Shell Petroleum Co Ltd and Shell Sabah Selatan Sdn Bhd for the 2011 North Sabah EOR PSC and the joint operating agreement between Shell and Petronas Carigali Sdn Bhd in relation to the PSC on March 31 this year.
The North Sabah PSC is Hibiscus Petroleum's second revenue stream aside from the Anasuria Cluster in United Kingdom (UK).
Following the USD25 million acquisition, Hibiscus Petroleum is the operator of North Sabah PSC effective April 1, 2018, with Petronas Carigali as partner.
The acquisition from Shell provides Hibiscus Petroleum with its first asset in Malaysia. Hibiscus Petroleum has the rights to manage North Sabah until 2040.
SEA Hibiscus chief executive officer Dr Pascal Hos, who is also the co-founder of Hibiscus Petroleum, said the Group would work on ensuring the North Sabah asset ran smoothly on a daily basis and further developing the fields.
He said the Group would be spending over USD50 million to further develop the North Sabah asset, adding that the good cash flow generated from the asset would help fund a lot of the work.
"The two main objectives for the asset is to get the production back up and bring down the total cost of production," he said in an interview session here yesterday.
On a 100 per cent PSC basis, North Sabah boasted an average daily production of 14,600 barrels last year.
He said the Anasuria Cluster and North Sabah would boost Hibiscus Petroleum's production to about 9,000 barrels of oil per day from around 3,500 barrels per day previously.
Dr Hos said the North Sabah PSC would bring the Group towards achieving its target of 20,000 barrels per day by 2021 from oil production operation licences that Hibiscus Petroleum obtained in the UK, Malaysia and Australia.
The North Sabah asset includes 20 offshore platforms across four producing fields, namely St Joseph, South Furious, SF30 and Barton located 33 kilometres from Kota Kinabalu, and the Labuan Crude Oil Terminal.
Meanwhile, Hibiscus Petroleum managing director Dr Kenneth Pereira said the company currently has 287 employees, of whom 260 are dedicated to operate North Sabah.
Some 202 employees in Hibiscus are East Malaysians, including 132 Sabahans, he said.
He said the company has transferred 215 people from Shell to Hibiscus to continue working on North Sabah during the acquisition.
He said the North Sabah production was a relatively large asset in terms of the number of facilities, including 20 platforms and 135 wells.
"Had we not have the support of the people from Shell who joined us in running this asset, we would not have felt as confident," he said.
Also present was SEA Hibiscus head of operations, Edmund Ang.