Petronas, 2 other firms begin extracting gas from field off Sabah
Output expected to ramp up to 500m standard cubic feet of natural gas per day by April 2015, says M'sian oil giant
Kuala Lumpur
MALAYSIA'S national oil company, Petroliam Nasional or Petronas, has announced that together with two other international oil firms, it has begun gas production from a Sabah offshore field it discovered in 1994.
In a media statement on Thursday, the oil firm, Malaysia's largest and only Fortune 500 company, said that Kebabangan Petroleum Operating Company (KPOC) had begun extracting gas from its platform sitting atop 140 metres of water off the Sabah coast.
KPOC is a joint operating company comprising Petronas Carigali (40 per cent), ConocoPhillips Sabah Gas Ltd (30 per cent) and Shell Energy Asia Limited (30 per cent). Petronas Carigali is the exploration and production unit of its parent.
The announcement affirms the essential truth of the adage that says oil reserves increase pari passu with technology. Three decades ago, Malaysia's oil reserves were estimated to last 21 years. Now it's more like 25 years, and that does not include the country's gas reserves or its international oil reserves.
The commencement of production also illustrates the national oil firm's - and its partners' - belief that the global decline in oil prices is, at best, temporary or, at worst, confined to its current levels.
The belief seems even more apparent in the face of the oil firm's seeming reluctance to delay new investments. Take, for example, its Wednesday announcement that it would acquire Phillips 66 Asia Ltd's 47 per cent interest in Malacca-based Malaysian Refining Company for US$635 million.
Phillips 66 Asia is a subsidiary of New York-listed Phillips 66 and the buy will give Petronas complete control of the refinery. It did not choose to delay its investment despite declining oil prices, affirming instead that the purchase would "strengthen its presence in the refining and trading businesses".
The Kebabangan (KBB) field is fairly significant. According to Petronas' media statement, production from the field is expected to ramp up to 500 million standard cubic feet of natural gas per day by April 2015.
It is also part of the Kebabangan Cluster Production Sharing Contract, a series of linked fields - discovered after 1994 - that KPOC is contracted to explore and develop.
To that end, production will come through the KBB platform, an integrated production facility designed and built as a hub with gas, condensate and crude oil-processing facilities to cater for production from this field and future tie-ins from other nearby fields, Petronas said.
Clearly, the oil firm expects much from the Kebabangan fields. The 39-metre-high platform, weighing approximately 18,000 tonnes, is one of the largest offshore structures ever built in Malaysia, with the capacity to process up to 825 million standard cubic feet of natural gas, 80,000 barrels of crude oil and 22,000 barrels of condensate daily.
Hydrocarbons from the platform will be transported through a pipeline to the Sabah Oil and Gas Terminal located onshore Kimanis, Sabah, the statement added.
