Murphy Oil has decided not to sell its stake in Block CA-1 offshore Brunei following a deepwater discovery by the block’s operator Shell.
“During the quarter, Murphy and its partners drilled a discovery in Block CA-1 in Brunei with the Jagus SubThrust-1X exploration well for a net cost of $2.8 million at approximately 8% working interest,” Murphy said in its quarterly report on 5 August.
As a result, Murphy has decided not to sell its share in Block CA-1, which has water depths ranging between 1000 metres and 2750 metres. “In the second quarter, Murphy reclassified its working interest in Block CA-1 of Brunei as no longer held for sale, while Block CA-2 retains that classification,” said the US-based company.
Shell operates Block CA-1 with an 87% stake after buying out TotalEnergies in April 2020. Petronas Carigali holds a 5% share with Murphy on the remaining 8%.
Block CA-1 is home to the 2012 Julong East-1 discovery made by former operator TotalEnergies, while a well drilled in late 2015 in the block confirmed the connection of Jagus East with the Gumusut-Kakap reservoirs on the other side of the border in Malaysian territorial waters.
Brunei is keen for Shell’s deep-water Jagus East discovery on Block CA-1 to be developed soon. The discovery’s reservoir is thought to be connected with the Shell-operated Gumusut-Kakap structure in Malaysian territorial waters, making bilateral cooperation essential.
In April, Malaysia and Brunei formalised a previously stalled unitisation agreement for the Gumusut-Kakap and Geronggong-Jagus East fields that straddle the international maritime boundary between the two countries. The about turn bodes well for Anglo-Dutch supermajor Shell, which has stitched up most of the acreage in Brunei’s offshore.