Kuala Lumpur: MIDF Research said the heads of agreement (HoA) inked between Petronas Carigali Sdn Bhd and Sabah’s SMJ Sdn Bhd paves the way for both parties to unlock the full potential of Sabah’s oil and gas industry.
In a research note, MIDF Research said as a zone with hydrocarbon-rich bedrock, Sabah has a high potential to leverage its economic development on the oil and gas industry.
With the HoA, SMJ could potentially acquire 50 per cent participation in the Samarang Production Sharing Contract (PSC), a producing asset encompassing key oil and gas hubs located about 50 kilometres offshore of Sabah.
“With the elevated and stable crude oil prices year-to-date, we opine that the upstream will remain operational for the year.
“While rig counts are not expected to rise in the short-to-mid-term, Petronas’ auction of its PSCs had seen positive responses from at least 500 vendors in the last three years,” the brokerage said.
Meanwhile, MIDF Research maintained its positive stance on Malaysia’s oil and gas industry, notably on its upstream subsector.
For the long term, the brokerage said its top pick would be Dialog Group Bhd, considering that the group had recently signed the Baram Junior Cluster Small Field Asset Production Sharing Contract with Petronas, for feasibility studies and subsequently the exploration/development of the Baram Field in Sarawak.
To date, the Sarawak Basin had produced over 160,000 barrels of oil per day and 4.0 billion standard cubic feet of gas, with an estimated unexplored prospect of 11.0 billion barrels of oil equivalent worth of hydrocarbon.
Meanwhile, The Labuan Chamber of Commerce (LCC) and the Immigration Department will work closely to ensure the just-revived transhipment activities in Labuan run smoothly.
LCC chairman Daniel Doughty said a meeting was held with the Labuan Immigration Department officials on Feb 23 to highlight the need for the authority’s involvement in transhipment operations.
“It was a fruitful meeting with the Immigration officials today on the transhipment activities which are now running,” he said.
He said the Immigration Department’s commitment to ensure the smooth running of transhipments was needed as the first vessel from the Southern Philippines island of Tawi-Tawi has been en route to Labuan since Feb 21.
“The department has expressed its readiness to facilitate and ensure a smooth operation of the transhipment activities in Labuan.
“During the meeting, LCC emphasised the importance of industrialising and reorganising the Labuan’s old trade that was formerly known as barter trade, stating that it will be essential for the growth and sustainability of the transhipment industry in Labuan.
“LCC also agrees with the suggestion of the immigration officials for LCC to be the secretariat if the Labuan were to establish a transhipment intergovernmental agencies committee, which would be a crucial step towards boosting the transhipment industry in this island,” he added.
As of today, LCC has facilitated three local companies which have been granted licences to undertake transhipment activity.
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