Sabah boosts revenue with crude oil sale from Samarang PSC

24 July 2024

KOTA KINABALU: Sabah has successfully completed the sale of its most recent crude oil shipment from its 50% stake in the Samarang Production Sharing Contract (PSC), securing an estimated sales revenue of RM120 million on July 23, 2024.

The strategic decision to acquire a 50% ownership in the Samarang PSC by SMJ Energy Sdn Bhd (SMJE) in May 2023 has enabled Sabah to market its crude oil entitlements through the Labuan Crude Oil Terminal (LCOT).

To date, five cargoes have been sold, resulting in nearly RM700 million in total sales revenue. These transactions are expected to continue generating steady revenue over the next 12 years, significantly strengthening the state's economy.

Sabah's increased involvement in the oil and gas sector stems from the Commercial Collaboration Agreement (CCA) signed with PETRONAS on December 7, 2021.

This agreement has granted the state greater revenue sharing, a stronger voice, increased participation, and more significant influence in Sabah's oil and gas value chain.

SMJE recently announced its audited financial results for the year ending December 31, 2023, revealing a remarkable profit after tax of RM259 million. This is a significant turnaround from the RM7 million net loss reported the previous year, attributed mainly to the company's start-up phase.

Key contributors to this financial success include profits from SMJE's 10 per cent of the lucrative Petronas LNG9 Sdn Bhd (PLNG9), 25 per cent stake in the SAMUR petrochemical plant and consistent revenues from crude oil sales in the Samarang PSC.

SMJE remains committed to a prudent acquisition strategy, focusing on profitablé oil and gas assets across the Upstream, LNG, and Downstream/Petrochemicals sectors. The company aims to invest in operations with strong cash flows managed by reputable operators who adhere to proven environmental, social, and governance (ESG) standards.

Sabah's proactive oil and gas sector approach underscores its dedication to sustainable growth and economic development, leveraging its natural resources to benefit the state and its people.