Friday, November 11, 2011

Petronas, Shell Malaysia ink HOAs for new oil recovery, PSC

KUALA LUMPUR (Nov 11): Petroliam Nasional Bhd and Shell Malaysia have signed heads of agreement (HOA) for new enhanced oil recovery projects offshore Sabah and Sarawak.

In a statement on its website Nov 11, Shell Malaysia said the HOA would see staged work activities and new investments from Shell and its joint venture partner Petronas Carigali Sdn Bhd (PCSB), to extend the life and increase the recovery factor of the Baram Delta (BDO) and North Sabah''fields.

The improvement in the recovery efficiency of the oil fields may result in an additional 90,000 to 100,000 barrels per day equivalent (kboe/d) of oil production and extend the field life to beyond 2040.

Shell chief executive officer Peter Voser said the new agreement confirmed Shell's commitment to continue investing in Malaysia and its position as a heartland for Shell.

'The agreement also provides an opportunity to work together with Petronas on building local knowledge and capabilities in enhanced oil recovery,' said Voser.

Shell Malaysia chairman Anuar Taib said this development would positively impact Malaysia's oil reserves and benefit the country as a whole, adding further value to the country's upstream oil and gas industry.

'Shell, as a long term partner in Malaysia's progress, is pleased to be able to continue contributing towards the national aspiration to become a high-income economy,' said Anuar.

Shell said the new agreement would build upon the existing BDO and North Sabah production sharing contracts, located offshore Sarawak and Sabah, respectively.

Petronas Carigali holds a 60% equity interest in the BDO production sharing contract (expiry 2018) and is operator while Shell holds the remaining 40% interest.

The North Sabah PSC (expiry 2019) is Shell operated with each company holding an equal 50% equity interest.

Shell said the projected increase in the average recovery factor in the BDO and North Sabah fields will see a rise from 36% to 50%, adding significant value to the upstream industry in Malaysia sustainably over the coming decades.

The TECHNOLOGY [] employed in the North Sabah fields could potentially lead to the first field-scale offshore Chemical EOR in the world.

To date, Shell has participating interests in 14 PSCs in various offshore blocks in Sarawak and Sabah.

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