April 3, 2012

Petronas To Award Additional Licenses To Develop Marginal Fields

 
Reported by Bernama News on 02/04/12, Petroliam Nasional Bhd (Petronas) will be awarding additional licences this year to develop marginal fields to bolster crude oil and gas production to further stimulate growth in the Oil, Gas and Energy sector.

The additional licenses would also support to maintain production at 650,000 barrels per day, the Performance Management & Delivery Unit (Pemandu) said in the Economic Transformation Programme Annual Report 2011 released today.
This move to develop small fields through innovative solutions is part of the entry point projects (EPPs) in the Oil, Gas and Energy (OGE) industry under the National Key Economic Areas (NKEA).

Having passed the Petroleum Income Tax Act last year to introduce new tax incentives for the oil and gas sector to unlock and monetise stranded O&G resources, the Act would be utilised to incentivise new players to enter the marginal field development segment, the report said.
  Among licenses awarded in 2011 were risk service contracts to Sapura Kencana Petroleum Bhd and Petrofac Energy Developments Sdn Bhd.

In a move to build Malaysia as a regional oil storage and trading hub under the EPPs for OGE, several large corporations and consortiums had also committed to construct and expand on petroleum storage terminals last year.


Among them are the Independent Deepwater Petroleum Terminal Project in Pengerang, Johor with a total protroleum storage capacity of about five million cubic metres due to be commissioned in 2014, development of the Labuan oil storage terminal in Pulau Daat and the Tanjong Agas Oil & Gas and Logistics Industrial Park in Pahang.


"The focus in 2012 will be ensuring that these projects are implemented, with several slated to be commissioned over the course of the year," Pemandu said.


To further see economic growth in the OGE sector, rejuvenating existing fields through enhanced oil recovery (EOR) has been indentified as one of the EPPs.
EOR uses methods such as gas or chemical injection or thermal flooding to increase the amount of oil recovered from the underground reservoirs.

Pemandu said additional focus would be needed to ensure that the investment committed in the best EOR techniques for the remainder of the O&G fields in Malaysia is realised to ensure 2012 targets are met.

Meanwhile under the unlocking latent gas demand EPP, Petronas will be embarking on the country's first regasification terminal in Melaka to receive, store and vaporise liquefied petroleum gas. This is expected to be commissioned by the third quarter of this year.

Pemandu also reported that Petronas Gas Bhd has set up a code of conduct defining standards of behaviour and disclosure in respect of the provision of third-party access to the gas transportation system operated by the company in Peninsular Malaysia.
Pemandu highlighted that ensuring the commissioning of the regasification terminal this year along with the set up of a code of conduct marked the beginning of the liberalisation of the natural gas market in Malaysia.

"Efforts to bring sales of natural gas by Petronas up to market prices will also continue as among our focus in 2012."


Attracting multinational companies to bring a sizeable share of their global operations to Malaysia is another key EPP for the OGE sector.
Under this, Malaysia Petroleum Resources Corporation (MPRC) was established last year to make Malaysia an O&G hub by 2017. MPRC established Global Incentives For Trading programme (GIFT) to encourage global petroleum trading companies to use Malaysia as a platform to enter the Asia Pacific market.

Todate, five companies have signed up for the programme.
MPRC aims to have at least four more companies signed up by the end of 2012. Moving forward in developing capabilities and capacity through strategic partnerships and joint ventures, Pemandu also targets for two additional JVs this year.

"Discussions between oil field services and equipment players in Malaysia are underway and in 2012 we target two additional mergers or acquisitions of domestic fabricators."


In 2011, the plan to merge Sapuracrest Petroleum and Kencana Petroleum Bhd, which is expected to be completed by first quarter this year, was among other strategic partnerships that took place. Under proposals to deploy nuclear energy for power generation EPP, Malaysia Nuclear Power Corporation has started its feasibility study and is expected to submit a detailed report to the government in early 2013.



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