Petronas has awarded two new small field asset (SFA) production-sharing contracts (PSCs) to Singapore-listed Rex International for the Rhu-Ara and Diwangsa clusters offshore Peninsular Malaysia.
The award marks Rex’s maiden entry into Malaysia’s upstream industry, in partnership with local company Duta Marine. Rex holds 95% participating interest with Duta Marine holding the remaining 5% in both PSCs.
“Rex brings to the table significant operating experience and expertise in developing and producing small oil fields in the Middle East as well as participation in joint ventures in the North Sea,” Petronas said in a statement.
The fields were offered during the Malaysia Bid Round 2020 (MBR 2020) based on the SFA fiscal terms introduced in the same year that intensifies Petronas’ commitment to monetising small discovered resource opportunities in Malaysian waters, said the national oil company (NOC).
The Rhu-Ara Cluster, consisting of Rhu and Ara fields, lies within the Penyu basin 150km off the coast of oil centre Kerteh, Terengganu. The Diwangsa Cluster, which lies in the northwestern side of the Malay Basin, comprises Diwangsa, Bubu, Korbu and Lerek fields.
These previously discovered fields have total estimated recoverables of 12.7 million barrels for the Rhu-Ara Cluster and 10.7 million barrels for the Diwangsa Cluster. Both clusters are now primed for development under the SFA PSC terms which incorporates a simplified fiscal model and governance process, added Petronas.
“We welcome new players who can deliver innovative solutions to ensure the lowest total life cycle cost in developing the discovered resources opportunities available in Malaysia waters. We are pleased to see that the SFA terms have become more attractive to the investors, thus validating the efforts taken to turn Malaysia into a growth hub for the investors,” said Malaysia Petroleum Management (MPM).
Apart from a host of small fields, a significant potential in the form of large opportunities lies in the shallow and deep-water fields in Malaysia, claims Petronas.