Exploration company Salamander Energy has made a move into Malaysia after striking its first production deal for the country.
The Asian-focused firm has signed a production sharing contract (PSC) for Block PM322 in the Melaka Straits off Malaysia’s west coast peninsular.
Salamander will take an 85% interest as operator for the block, which contains the Port Klang discovery made by Sun Oil in 1991.
“We have been targeting an entry into Malaysia for some time and I am delighted that we were able to find an opportunity that is an excellent strategic fit with our model of building out from discovered resources,” said chief executive James Menzies.
“There are numerous fallow discoveries in Malaysia that would provide further running room in country and we look forward to building a successful business in Malaysia over the coming years.”
Only six wells have ever been drilled in the Malaysian side of the Melaka Strait, but Salamander believes the area shows potential of extending the Sumatran basins into Malaysian waters.
It already operates Bualuang oil field in the Gulf of Thailand, which was discovered at the same time as the Port Klang find.
Salamander says it will shoot 3D seismic and drill one exploration well at the site before December 2016.
Meanwhile the company has completed installation work on the Bualuang Bravo platform ahead of hook up and commissioning for the field.
Focus now switches to setting up the Bravo pipeline and FSO riser by mid-2014, with switchover from the current floating production and storage unit to a new vessel due for completion by next summer.
The new facilities will save the firm around £12million in operating costs.