SMJ Energy signs second exploration deal
KUALA LUMPUR: SMJ Energy Sdn Bhd (SMJESB) steps into the new year with another deal for up to 20 per cent stake in the Block SB403 Production Sharing Contract (PSC), here, on Tuesday.
Inking the Letter of Understanding (LoU), SMJESB, a wholly Sabah Government owned company, is offered by PETRONAS Carigali Sdn Bhd (PCSB) and E&P Malaysia Venture (EPMV), of up to 20 per cent participating interest in Block SB403 PSC under the backin option, which is exercisable upon completion of work commitment or commercial discovery, whichever is earlier.
This is the SMJESB’s second exploration dealing with PCSB and EPMV through the same option. The first back-in option was signed on Feb 15 last year for Block SB409 PSC, situated offshore Sabah covering 14,556 sq km of area.
The event also marks the SMJESB’s latest achievement following the signing of the Commercial Collaboration Agreement (CCA) between the Sabah Government and PETRONAS on Dec 7, 2021, in line with its objectives to increase revenue sharing, have greater participation and say in the production and monetisation of oil and gas resources derive from the state.
Under the back-in option deal, SMJESB has the opportunity to access and review the information and data obtained from the exploration work programme before deciding to accept or turn down the back-in option offer.
With that, it is able to manage exploration risk to the minimum. No cost will be incurred by SMJESB should it choose not to take up the back-in offer.
Situated offshore north of Sabah covering 10, 256 sq km of area, Block SB403 was awarded to PCSB and EPMV by national oil company PETRONAS during the 2023 Malaysia Bidding Round (MBR).
The LoU was signed by SMJESB Executive Director Upstream Albert Lo, PCSB Chief Executive Officer Hasliza Othman, and EPMV Head, Aliff Anwar, during a ceremony at the Kuala Lumpur Convention Centre.
As a prudent financial investor, SMJESB focuses on profitable oil and gas-producing assets with strong cash flow, while securing exploration options with minimal exploration risks.
Apart from the two PSCs, SMJESB also has a 50 per cent stake in the Samarang PSC, a 25 per cent share in the Sabah Ammonia Urea petrochemical plant, and through the acquisition of Sabah International Petroleum Sdn Bhd (SIP) last year, it also has a 10 per cent ownership stake in Petronas LNG9 Sdn Bhd that operates an LNG plant within the Bintulu LNG complexes.