SMJESB secures second oil exploration deal in Sabah

23 January 2024

KOTA KINABALU: SMJ Energy (SMJESB), a state-owned oil and gas company, has inked a second agreement with PETRONAS Carigali (PCSB) and E&P Malaysia Venture (EPMV) to explore an offshore area in northern Sabah.

According to The Star, the letter of understanding, which was signed, grants SMJESB a back-in option to acquire up to 20% stake in Block SB403, a 10,256sq-km area north of Sabah, upon completion of work commitment or commercial discovery, whichever is earlier, the company said in a statement.

This option allows SMJESB to access and review the information and data obtained from exploration work before deciding if it would accept the option. This enables SMJESB to manage exploration risk and keep it to a minimum.

Block SB403 was awarded to PCSB and EPMV by national oil company PETRONAS during the 2023 Malaysia Bidding Round (MBR).

The letter was signed by SMJESB executive director for upstream Albert Lo, PCSB chief executive officer Hasliza Othman and EPMV head Aliff Anwar at the Kuala Lumpur Convention Centre.

This is the second time SMJESB has partnered with PCSB and EPMV for oil exploration in Sabah. The first deal, signed on Feb 15 last year, gave SMJESB a similar option for Block SB409, another offshore area covering 14,556sq-km.

SMJESB also owns 50% of the Samarang PSC, 25% of the Sabah Ammonia and Urea Plant, and 10% of Petronas LNG9, which operates a liquefied natural gas (LNG) plant within the Bintulu LNG complex.