Petronas has awarded Block SK427 off the coast of Sarawak to SK earthon, a subsidiary of South Korea’s SK Innovation, and Petroleum Sarawak Exploration & Production (PSEP) in an area where several discoveries were made last year. Petronas and SK will also collaborate on carbon capture and storage (CCS) opportunities.
SK earthon, which was welcomed on Friday as a new upstream investor, is the operator of Block SK427 with 85% participating interest while PSEP, the Sarawak-owned oil and gas company, holds the remaining 15%.
“Block SK427 is located within the prolific area of Balingian and Tatau hydrocarbon provinces covering an area of 3,349 sq km. The block is situated in a proven hydrocarbon system and has promising hydrocarbon potential to be unlocked. Several significant hydrocarbon discoveries were made in 2021 in the Balingian province near the block, namely Sirung-1 and Hadrah-1 wells,” Petronas said in a statement.
Senior vice president of Malaysia Petroleum Management (MPM) Mohamed Firouz Asnan, who signed the production-sharing contract (PSC) on behalf of Petronas said that “we welcome SK earthon to Malaysia’s upstream industry and as a new player, they bring vast experience in exploration and production, garnered from their worldwide exploration activities. Petronas will also collaborate with SK earthon in the carbon capture and storage (CCS) sector, in line with Petronas’ aspiration to achieve Net Zero Carbon Emissions by 2050.”
“SK427 PSC is one of the six blocks awarded from the Malaysia Bid Round (MBR) 2021, demonstrating Malaysia’s potential as an attractive investment destination for companies seeking to grow their energy portfolio and thrive in the energy transition. Under our ‘right asset, right player’ strategy supported by a progressive fiscal regime, we hope to fully maximise the long-term value of the nation’s hydrocarbon resources,” he added.
MBR is an annual Malaysia licensing round hosted by MPM which offers investors diverse upstream opportunities, including exploration acreages, discovered resource opportunities and late life producing assets. The MBR 2022, themed “Your Advantaged Energy is Here”, was launched on 27 January and will run until 30 June 2022. It offers 14 exploration blocks, six Discovered Resource Opportunities clusters and one Late Life Asset cluster, said Petronas.
Petronas, through MPM, manages petroleum arrangements in Malaysia and provides stewardship on upstream petroleum activities.