October 1, 2013

Bright Prospects For Oil and Gas Industry in Sabah and Sarawak

The growth prospects of the oil and gas industry in Sabah and Sarawak has been viewed as bright, driven by new developments in oil and gas field explorations and enhanced oil and gas recovery technologies, says Royal Dutch Shell plc (Shell).

“A lot of developments have been made in the deepwater (exploration and production),” Shell Malaysia chairman Iain Lo told The Borneo Post on the sidelines after concluding Shell Malaysia’s Innovation Summit 2013.

He highlighted that these deepwater projects, of which Shell is currently working in joint venture with Petronas Carigali Sdn Bhd, are enhanced oil recovery projects that will contribute significantly to the oil and gas production.

To note, Shell is currently working with Petroliam Nasional Bhd (Petronas), ConocoPhillips Sabah, and Murphy Sabah Oil on the development of the Gumusut-Kakap field, which is the first deep-water opportunity for Shell in Malaysia.

The field will be developed using 19 subsea wells with oil exported via a pipeline to a new oil and gas terminal, and will have a peak annual production of 135,000 barrels per day.

Natural gas that is produced along with the oil will be re-injected into the reservoir to help improve oil recovery.

Additionally, Lo noted, “Behind that, we have the Malikai project which we have awarded the application contract to Marine and Heavy Engineering Sdn Bhd (MMHE) in Johor, last year.” In Sarawak, he highlighted that Shell is in the middle of installing three to four platforms to develop a few small fields.

Beyond that, Lo said, Shell is progressively pushing its gas exploration activity.

“The future of oil and gas in Sarawak is good because there’s a ready-made gas outlet in the Bintulu liquefied natural gas (LNG) plant,” he commented and added that there is a very strong incentive for oil and gas companies to look for gas in Sarawak.

“As in oil, there is enhanced oil recovery, we are also trying to see if we can bring enhance gas technology to Sarawak,” Lo underlined.

Concurring Lo’s view, Shell Projects & Technology director Matthias Bichsel highlighted the gas industry in Sabah and Sarawak given its position as a ‘gassy province’ of which Shell expects to discover more gas reserves.

Meanwhile, on the Gumusut-Kakap project, Matthias commended the development as the new infrastructure will pave way to more oil and gas opportunities overtime.

“Once you have an infrastructure in the area, it allows then to have smaller pockets of oil and gas to be successfully developed,” he highlighted.

He further outlined that a project such as Gumust-Kakap would enable the ability to harvest smaller pockets of oil and gas in an economically attractive way.

Aside from that, banking on the realisation of decreasing resources, Lo highlighted that on top of undergoing further oil and gas exploration to discover more reserves, Shell is also progressively working on ways to produce more from discovered reserves.

Source: Borneo Post