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Najib Witnesses Agreement Signing For US$12 Billion World’s Biggest Offshore Oil Project

By Sunday January 15th, 2012 No Comments

PUTRAJAYA, Jan 16 (Bernama) — Prime Minister Datuk Seri Najib Tun Razak monday witnessed the signing ceremony for the world’s biggest offshore enhanced oil recovery (EOR) project totalling US$12 billion over 30 years between Petronas and Shell Malaysia.

Under the production-sharing contract for two EOR offshore projects in Sarawak and Sabah, the oil companies will develop nine oilfields in the Baram Delta and four in the North Sabah development area using EOR or other appropriate related technologies.

Najib said the project is expected to see several key benefits of national importance, including building local capabilities in a niche technology area, as well as increasing the average recovery factor in the Baram Delta and North Sabah fields from around 36 per cent to 50 per cent.

“If realised, the technology will also be able to extend the field’s life to beyond 2040,” he said in his speech after the signing ceremony.

Petronas Carigali (operator) has a 60 per cent interest in the Baram Delta EOR PSC while Shell Malaysia, via Sarawak Shell, holds the remaining 40 per cent.

The partners own an equal 50:50 per cent interest in the North Sabah EOR PSC, to be operated by Shell Malaysia, via Shell Sabah Selatan, and their financial commitment for the two EOR projects will amount to US$12 billion over the 30-year period from January 2011.

Petronas President and Chief Executive Officer (CEO) Datuk Shamsul Azhar Abbas signed on behalf of Petronas, while Shell was represented by its CEO, Peter Voser and Petronas Carigali by its President, Datuk Abdullah Karim.

Najib said the improvement in the recovery efficiency of the oil field is expected to positively impact Malaysia’s oil reserves and benefit the country as a whole.

“In addition, I was told that if successful, the technology employed in the North Sabah fields could potentially lead to the world’s first offshore Alkaline Surfactant Polymer (ASP) EOR project using horizontal wells,” he added.

The Prime Minister said the government is committed towards realising the national agenda as spelt out in the Economic Transformation Programme (ETP), to make Malaysia a high-income economy by 2020.

He said as the largest sector in the Malaysian economy, Oil, Gas and Energy (OGE) was one of the National Key Economic Areas (NKEAs) to drive the country’s transformation in realising its goals.

He said the Malaysian government had identified the rejuvenation of existing fields through EOR as one of the 19 entry Point Projects (EPPs) to provide additional supplies for Malaysia power and industrial needs and promote an organised growth of the oil and gas sector.

The EOR projects are expected to recover more than 750 million barrels of oil from the two PSC areas using the latest technologies.

Meanwhile, Shamsul in his speech said the Baram Delta and North Sabah are located within some of Malaysia’s largest clusters of oil fields, with oil-in-place of 4.6 billion barrels and 1.6 billion barrels respectively.

“To date, we have recovered some 1.7 billion stock tank barrels through primary and secondary recovery techniques.

“With the introduction of EOR, we are confident of unlocking significant volumes of the remaining hydrocarbons. This will enable us not only to realise further value from these fields but also contribute to the sustainability of national oil production,” he added.

Source : Bernama

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