Petronas has awarded Ping Petroleum two production sharing contracts (PSCs) for discovered oil and gas resources in Malaysia marking the company’s debut in its home country.
The first PSC is for the development and production of oil and gas resources in the Meranti cluster located 80 km offshore Kuala Terengganu. Ping Petroleum is the operator of the Meranti Cluster with 60% participating interest, while Duta Marine holds the remaining 40%.
The second PSC is for the development and production of oil and gas resources in the A Cluster located 290 km off the coast of Miri, Sarawak, offshore Malaysia. Ping is the operator of the A Cluster with 70% participating interest, while Petroleum Sarawak Exploration & Production holds the remaining 30%.
Dialog Resources and Petroleum Sarawak also won a bid for the Baram Junior Cluster in Sarawak.
Petronas announce the awards on Tuesday following its Malaysia Bid Round 2022 (MBR 2022). The PSCs were awarded under the Small Field Asset (SFA) terms introduced in 2020.
Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Executive Chairman of DNeX, which owns Ping Petroleum, said the company is pleased to expand its portfolio onto the Malaysian shores with the maiden awards secured from Petronas
“The inclusion of the Meranti Cluster and A Cluster in PPSB’s portfolio will re-establish the company’s position in our home territory, build on our proven track record for low-cost developments and operations in the UK and allow us to diversify our revenue stream and operations across multiple geographies. The total development cost for the two clusters will be determined after the development concepts have been finalised.”
He said the two clusters can contribute to the material increase of Ping’s contingent resources and support further growth opportunities, while reinforcing its energy business.
DNeX through its oil and gas upstream exploration and production unit, Ping Petroleum Limited currently has two assets namely the Anasuria and Avalon fields in the North Sea, United Kingdom. The company focuses on shallow water production and development opportunities and is currently the joint operator of the Anasuria cluster (production) and sole operator of Avalon (development).
Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said DNeX’s energy unit is in a unique position to capitalise on its proven track record of being amongst the lowest-cost upstream producers of late-life assets in the UK North Sea.
“This will ensure we can continually remain profitable in the event of oil price fluctuations. The demand side is also expected to remain broadly favourable despite a global economic slowdown, heightened recession risks in Europe and the United States, as well as lingering concerns over growth in China,” he said.
Petronas Senior Vice President of Malaysia Petroleum Management (MPM), Mohamed Firouz Asnan said “we take this opportunity to welcome Ping Petroleum to Malaysia’s upstream industry and look forward to the company replicating its successes abroad in monetising small field assets, here in our shallow water.”
“Also, congratulations to Dialog Resources on its debut as an operator while Petroleum Sarawak and Duta Marine continue to expand their portfolio in Malaysia. The signing of the three PSCs validates the attraction of Malaysia as a preferred choice for potential investors looking for advantaged energy as we act positively on their feedback.” he added.
In the coming weeks, Petronas will be signing new PSCs with the MBR 2022 winning bidders for the exploration opportunities.
The MBR is an annual licensing round offering diverse upstream opportunities to potential investors and includes exploration acreages, DRO and late life producing assets across Malaysia.
The MBR 2023 is scheduled to be held on 15 February 2023.