SMJ Energy Takes 20% Stake in North Sabah EOR Project
- nabalunews
- 26 minutes ago
- 3 min read
9 February 2026
KUALA LUMPUR: Sabah, through SMJ Energy Sdn Bhd (SMJE), has acquired a 20 per cent participating interest in the North Sabah Enhanced Oil Recovery Production Sharing Contract (EOR PSC) following the signing of a Farm-Out Agreement (FOA) with PETRONAS Carigali Sdn Bhd (PCSB).
The agreement was formalised at the Kuala Lumpur Convention Centre on Monday in conjunction with the commemoration of collaboration between the Sabah State Government and PETRONAS.
Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor said the acquisition reflected the State Government’s long-term strategy to strengthen Sabah’s energy sector through quality investments and close cooperation with PETRONAS.
“With opportunities now expanding across the state from the west to the east coast, we welcome reputable investors to partner with us in ensuring sustainable and lasting benefits for the people of Sabah,” he said after witnessing the exchange of documents.
The acquisition, effective from 1 January 2026, follows the Heads of Agreement (HoA) signed between SMJE and PCSB in November 2025, paving the way for the completion of the transaction.
This marks SMJE’s second upstream acquisition since its entry into the Samarang Production Sharing Contract in April 2023, further strengthening its position as a strategic player in Sabah’s oil and gas industry.
The North Sabah EOR PSC comprises four producing oil fields located in shallow waters, about 70 metres deep, off the coast of Kota Belud. The asset includes 20 offshore platforms linked by a 143-kilometre, 24-inch pipeline that transports crude oil to the Labuan Crude Oil Terminal.
Following the transaction, SMJE will hold a 20 per cent non-operating interest. SEA Hibiscus Sdn Bhd will continue as operator with a 50 per cent participating interest, while PCSB retains the remaining 30 per cent.
The move is expected to increase SMJE’s crude oil entitlement, with cargo liftings projected to rise from 4.7 cargoes in 2025 to 7.0 cargoes in 2026, improving revenue streams and supply reliability for Sabah.
Deputy Chief Minister II and State Minister of Finance, Datuk Seri Panglima Masidi Manjun, who is also Chairman of SMJ Energy, said the North Sabah asset was strategically important and that SMJE’s participation demonstrated the state’s growing role in upstream oil and gas activities.
“This move secures long-term value, builds commercial capability and ensures that greater benefits flow directly to the people of Sabah,” he said, adding that SMJE would continue to pursue value creation through strategic partnerships, local participation and responsible resource management.
Earlier, PETRONAS and Sabah Energy Corporation (SEC) exchanged documents for a Heads of Agreement covering the Mutiara Cluster, which establishes the framework for a future Gas Sales Agreement to support the cluster’s development, targeted for the first quarter of 2029.
Documents were also exchanged for the Permata Cluster Production Sharing Contract between PETRONAS and Bridge Petroleum Limited, a newly appointed Petroleum Arrangement Contractor. The Permata Cluster is located offshore Sabah.
