KUALA LUMPUR: The State Government has signed a Letter of Understanding (LoU) with Petronas Carigali Sdn Bhd (PCSB) and E&P Malaysia Venture (EPMV) on the Back-In Option arrangement on Block SB409 Production Sharing Contract (PSC).
With the signing of the LoU, the Sabah State Government through its wholly-owned company SMJ Sdn Bhd (SMJSB) will be offered a Back-In Option of up to 20 per cent participating interest, exercisable upon completion of work commitment or commercial discovery, whichever is earlier.
Situated offshore South West Sabah covering 14,556 sq km of area, Block SB409 was awarded to PCSB and EPMV by Petronas during the 2022 Malaysia Bidding Round (MBR).
The LoU was signed by SMJSB Chief Executive Officer, Dr Dionysia Aloysius Kibat, Puan Hasliza Othman, CEO PCSB and EPMV Head, Aliff Anwar at the Kuala Lumpur Convention Centre here today.
The LoU was the latest achievement of the Gabungan Rakyat Sabah-led State Government following the signing of the Commercial Collaboration Agreement (CCA) with Petronas on 7 December 2021.
The CCA allows the Sabah State Government through SMJSB to increase revenue sharing, to have greater participation and say in the oil and gas production and its value chain in the State.
Sabah Chief Minister, Datuk Seri Panglima Haji Hajiji Haji Noor had assured that the CCA would create a more inclusive environment for the oil and gas industry in Sabah including offshore and onshore, adding that it has been the state government’s aspiration that Sabah gets more from its oil and gas production.
The State Government is pursuing more deals with Petronas which will be announced in due course.