SPECA hopes for more local O&G contractors’ participation

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KUCHING: Sarawak Petroleum Contractors Association (SPECA) congratulated Petra Energy Development Sdn Bhd (Petra), a wholly-owned subsidiary of Petra Energy Bhd, for the Conditional Award of Sarawak Onshore Block 433 by the state-owned petroleum company, Petroleum Sarawak Bhd (PETROS) recently.

Petra will be the operator of the block, together with its joint venture (JV) partner, Uzma Engineering Sdn Bhd (Uzma), a wholly-owned subsidiary of Uzma Bhd.

In its statement released on Saturday, SPECA said PETROS is moving forward to the next stage of its exploration and production (E&P) programme after PETROS received oil blocks from the Sarawak Government in October last year.

“Congratulation to PETROS team headed by Datuk Saau Kakok. Now we can expect more robust moves by PETROS in months to come with more contracts to be awarded, not only for the upstream but also the downstream activities. This will be a good opportunity for local contractors to be involved,” said SPECA President, Datuk Rahman Lariwoo.

“We also would like to congratulate the GPS Government under the able leadership of its far-sighted Chief Minister, Datuk Patinggi Abang Johari. Generally a good start for the Sarawak Government in its planning to take control and manage its oil and gas (O&G) resources.”

Petra and Uzma are no strangers to the E&P sector. Petra itself currently operates the KBM (Kapal, Banang and Meranti) Cluster of small fields located offshore of Peninsular Malaysia, together with Coastal Energy Company, under another JV partnership, Coastal Energy KBM Sdn Bhd.

“We believed the Petra/Uzma JV should be able to bring positive results based on their track record and experiences. PETROS had made the right decision to award (Block) SK433 to them,” added Lariwoo.

SPECA also hopes PETROS will look into the participation of local contractors according to their areas of expertise.

“We recognised that there are about 500 Sarawak O&G contractors registered with PETRONAS and maybe the same with PETROS, and about 200 that are active currently. SPECA itself has about 70 members today. SPECA Consortium is looking at the provision of onshore drilling rigs and its associated services and supplies. SPECA has built its capabilities by combining members’ capabilities, technically and financially, and also partnering with foreign companies with the right expertise and assets,” Lariwoo said further in SPECA’s statement.

With the current uptrend in the prices of oil and gas, it should bring good revenue for the Sarawak Government in term of sales tax.

SPECA also hopes PETROS can look into Sarawak’s O&G offshore resources where it is legally permitted.

Block SK 433 covers the Miri-Marudi area in northern Sarawak. The award was given after a competitive bidding exercise that was managed by PETROS since January this year.

According to PETROS, the successful investor met the technical and financial essential-capability requirements and has also submitted an acceptable bid of “work-programme of activity commitments” aimed at rejuvenating E&P activities for the Block SK 433 contract area.

Phase 1 of the SK 433 Petroleum Contract is for an initial four-year contract (with an option of a one additional year extension)  to complete its exploration and appraisal “work/activity commitments”.

Upon the successful outcome of Phase 1, the subsequent Phase 2 will involve development and production activities.

The award is a milestone as it signifies the operationalisation of the State Government’s control of oil mining and exploration in all the onshore areas of the state, pursuant to the Commercial Settlement Agreement (CSA) between the State Government and PETRONAS signed on 7 December 2020.

This is also significant as Sarawak look forward to the resumption of active E&P onshore activities after a lapse of several years, with PETROS as the one-stop centre for the state in its role as resource regulator and manager.

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