Exciting Times Ahead for Oil and Gas in Malaysia

Proven oil and gas reserves up for grabs in Malaysia’s next world-class acreage offering.
This article appeared in Vol. 16, No. 6 - 2019


Exciting Times Ahead for Oil and Gas in Malaysia

Following on from a successful 2019 bid round, and carrying on the well organised and thorough bid round procedures Petronas is now associated with, the Malaysian state firm has launched its 2020 Bid Round. Petronas, and the country’s Petroleum Management Unit in particular, have held rounds almost annually over the last few years, each time releasing more data, and inviting bids on ever more valuable acreage.

What makes this Round more attractive is Petronas’ continued move towards releasing lower risk acreage, drilled resources, and marginal fields ripe for development. There are few places in the world where companies can invest in lineof-sight production opportunities. After decades of carefully managing the domestic E&P sector within the Petroleum Management Unit and Petronas Nasional, the sector is gradually being opened up to further international investment, albeit under careful regulation. Now the state firm has provided access to data, acreage and opportunities that appeal to a much wider cohort of companies seeking to bolster their bottom line in the market place with contingent and proven reserves.

The appetite for deal making is starting to tell here, and the Malaysian sector is set to benefit hugely. Since 2016 major transactions have been helping to reshape the upstream landscape in Malaysia, with companies like PTTEP making big entrances. Hibiscus took a group of fields off Shell in Sabah, and Murphy sold their prized Kikeh field and four other assets to PTTEP in a $2.1bn deal. Coro, a small UK-based firm, entered into a Joint Technical Study with Petronas over the prolific Central Luconia province offshore Sarawak – an impressive step for a small AIM-listed explorer. After the 2019 Bid Round, Petronas say that four PSCs have been assigned, and three more are in mature negotiations. Latest rumours suggest that ExxonMobil will seek a buyer for its entire Malaysian subsidiary, a massive opportunity that is comparable to the large supermajor divestments in the North Sea and Gabon.

These are exciting times for a mature province previously heavily regulated, and for oil firms starved of low risk assets in other global theatres. Analogous to the re-opening of the Mexican upstream sector, and in marked comparison to stumbling deregulation in Indonesia and closed-door opportunities in the Middle East, this hot area of Asia Pacific could well outstrip the transaction potential of other mature basins across the world. 

In the 2020 offering, Petronas include four discovered fields and four mature DRO development clusters: PM416 includes the Ipoh discovery and PM524 has the Laba and Laba Barat discoveries; Block SB410 incorporates the Ziosit discovery; the Diwangsa Cluster includes four fields with combined proven reserves of 56 to 111 MMboe; the Rhu-Ara Cluster includes the Rhu and Ara discoveries with an HIIP of 140 to 232 MMboe. In addition, the Bambazon cluster offshore Sabah has proven hydrocarbon potential and good reservoir quality with an HIIP of 210 to 338 MMboe. The deepwater Kerisi Cluster, also offshore Sabah, includes oil, gas and condensate discoveries with an HIIP of 196 to 426 MMboe. 

Expect a long queue from opportunity-hungry small- and mid-caps ready to embrace the new resource-rich offerings in Malaysia when data rooms open in January 2020.

Further Reading on Oil and Gas Activity in Malaysia

Exploration Update: Malaysia
Brought to you by GEO ExPro and Drillinginfo.
Sapura Energy confirm success for exploration in the Sarawak Block of Malaysia's Greater Sarawak Basin.
This article appeared in Vol. 15, No. 3 - 2018

Sarawak Discoveries Boost Malaysia
David Upton
Malaysia’s bid to turnaround the decline in its ageing petroleum reserves has exceeded expectations thanks to a series of major discoveries offshore Sarawak.
This article appeared in Vol. 12, No. 4 - 2015

South East Asia: Deepwater Activity in an Environment of Oversupply
Dylan Mair and Evonne Tan, IHS Energy
As explorers in Asia Pacific undertake the search for high-cost deepwater-targets, global production levels remain high and oil prices slump. This article investigates the impact on these deepwater projects.
This article appeared in Vol. 12, No. 1 - 2015

Malaysia: Two Gas Discoveries
At the tail end of 2011 Petronas, the state oil company of Malaysia, announced the success of an offshore well in moderately deep waters in Block SK316, about 100 km north-west of Miri in the state of Sarawak, which is in the Malaysian part of the island of Borneo.
This article appeared in Vol. 9, No. 2 - 2012


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