PETRONAS has signed two new Small Field Asset (SFA) Production Sharing Contracts (PSCs) with Rex International Holding Limited (Rex) and Duta Marine Sdn Bhd (Duta Marine) for the Rhu-Ara and Diwangsa clusters offshore Peninsular Malaysia.
The award of these PSCs marks Rex’s maiden entry into Malaysia’s upstream industry, in partnership with local company Duta Marine. Rex holds 95 per cent participating interest with Duta Marine holding the remaining five per cent 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.
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.
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 MMstb for the Rhu-Ara Cluster and 10.7 MMstb 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.
A virtual ceremony was held to commemorate the signing of the two SFA PSCs. PETRONAS was represented by its Senior Vice President of Malaysia Petroleum Management (MPM), Mohamed Firouz Asnan, while Rex and Duta Marine were represented by their Executive Chairman, Dan Broström and Director, Mahyudden Abdul Wahab, respectively.
Mohamed Firouz said, “We believe that Rex’s proven capability in developing small fields abroad could be deployed in the Rhu Ara fields to unlock the potential in the Penyu Basin followed by the development of Diwangsa Cluster.
“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.”
Apart from a host of small fields, a significant potential in the form of large opportunities lies in the shallow and deepwater fields in Malaysia. Potential investors seeking to invest in Malaysia’s E&P sector can participate in the annual Malaysia Bid Rounds.