KUCHING: Shell Malaysia (Shell) has signed a new production sharing contract (PSC) with Petroliam Nasional Bhd (Petronas) to explore for oil and gas offshore Sarawak.
In a press release yesterday, Shell said the SK319 PSC will see the company undertake an initial three-year exploration programme to comprehensively explore 2,727 sq km within block SK319 in Central Luconia, offshore Sarawak.
Sarawak Shell Bhd is the operator and will partner Petronas Carigali Sdn Bhd (Petronas Carigali)with a 50:50 participating equity split, it said.
The new PSC forms part of Shell’s low-cost exploration & development focus that will allow the company to carry out a multi-well exploration campaign to further explore and de-risk the mature carbonate pinnacle play in Central Luconia.
According to Shell Malaysia chairman and Sarawak Shell managing director Iain Lo, the successful execution of this new PSC and joint operating agreement marked an important milestone for Shell in Malaysia after the signing of the SK318 and 2B exploration contracts for offshore Sarawak earlier this year.
“This is the third operated exploration PSC that Shell Malaysia has signed in 2012 and adds to Shell’s growing exploration position in Malaysia,” he said.
As PSC operator to Petronas, Shell is the largest gas producer in Malaysia, accounting for 60 per cent of Malaysia’s gas production.
Of the output, 90 per cent is earmarked for the Petronas liquefied natural gas complex in Bintulu.