Malaysia Petroleum Management
Since the bustling world came to a halt the day the World Health Organization (WHO) declared COVID-19 as a pandemic on 11 March 2020, governments and industries grappled to make sense of the situation and its severity. The oil and gas industry took a huge hit. Before the pandemic, the industry was already far behind its USD100 barrel glory days. Oil price spiraled downward due to several reasons; US shale production, trade sanctions, OPEC and Russia price war and China and US diplomatic strained relations. The onset of the pandemic added to plunging oil demand and oil prices further dove to record lows for the third time in 12 years.
Against this devastating scenario, the industry saw a slowdown and even hard stops of projects, which were either cancelled or deferred as global players scrambled to stay resilient. PETRONAS was not spared either. Despite the challenges and disruptions, PETRONAS and its partners recorded a major success in the deepwater development project at Block H, located off the coast of Sabah, offshore Malaysia.
Overcoming a myriad of challenges amidst a nationwide lockdown due to the pandemic as well as operational bumps along the way, first gas production was achieved from the Rotan and Buluh fields on 6 February 2021.
Producing from a water depth of more than 1,100 metres, Block H Gas Development Project, is a multi-field phased subsea development designed to deliver gas to PETRONAS Floating LNG Dua (PFLNG DUA) for the monetisation of the stranded gas reserve at deepwater area under Block H Production Sharing Contract (PSC). PFLNG DUA is operated by PETRONAS Floating LNG Ltd.
PETRONAS Senior Vice President of Malaysia Petroleum Management (MPM), Mohamed Firouz Asnan attributes one of the key success factors for the first gas to the collaborative efforts among PTTEP, MPM, the Government of Malaysia and Sabah State Government, especially when complying to the COVID-19 regulations and guidelines issued by the government during the height of the pandemic.
“This strong collaboration between PETRONAS and partners had brought together expertise and technologies to monetise stranded deepwater gas fields through the evacuation of gas via PFLNG DUA. Upon commercialisation of this facility by the middle of March 2021, PETRONAS will become the first global energy company to own and operate two floating LNG facilities."
“This achievement demonstrates the evolution of Malaysia’s petroleum industry in monetising its hydrocarbon reserves, not only from the conventional fields but expanding the technologies and resource capabilities in deepwater exploration and development,” he added.
The development of Phase 1A under Block H consists of three (3) Rotan and one (1) Buluh production wells tied back to PFLNG DUA for the delivery of 270 mmscfd of gas for approximately 10 years as per the Gas Sales Agreement (GSA). Three (3) of the four (4) wells from the Rotan and Buluh fields have been online since 30 January 2021 for the commissioning of the flowlines and the two flexible risers connecting the subsea production system to the PFLNG DUA.
Phase 1A is part of the phased subsea development and is located in the mid-section of Block H in the Malaysian Offshore Sabah sector of the South China Sea, approximately 240 km north-west of Labuan Island at water depths ranging from 1,100m to 1,400m.
Production from Block H joins the ranks of existing oil production from three (3) deepwater blocks offshore Malaysia. Furthermore, PETRONAS is also offering more opportunities to investors in unlocking deepwater potential to help realise the vision to make Malaysia as the deepwater hub in South East Asia.
Under Block H PSC, PTTEP Sabah Oil Limited (PTTEP), a subsidiary of PTT Exploration and Production Public Company Limited, as operator holds 42% participating interest, while PT Pertamina Malaysia Eksplorasi Produksi, a subsidiary of Pertamina, holds 18% and PETRONAS Carigali Sdn Bhd (PCSB), a subsidiary of PETRONAS, holds the remaining 40% for all fields within Block H except for the Rotan field.
PTTEP, as the operator of Rotan field, holds 56% participating interest, while Pertamina holds 24% and PCSB holds the remaining 20%.
PETRONAS welcomes further investment to unlock deepwater potential in realising the vision to make Malaysia the deepwater hub in South East Asia – www.petronas.com/mpm/
