Recently, Rex International Holding Ltd (Rex) and Duta Marine Sdn Bhd (Duta Marine) signed Small Field Asset (SFA) Production Sharing Contracts (PSC) with Petroliam Nasional bhd (PETRONAS) for the Rhu-Ara and Diwangsa clusters offshore Peninsular Malaysia.
Rex is an oil exploration and production company headquartered in Singapore. Meanwhile, Duta Marine is a local offshore and marine service provider.
What is Production Sharing Contract?
The PSC is a contractual arrangement for exploration, development and production of hydrocarbon resources. As an agreement, the oil company (contractor) will bear all exploration risks associated with petroleum activities in the contract area while enjoying entitlement from the hydrocarbon production.
According to PETRONAS, the award of these contracts marks Rex International’s maiden entry into Malaysia’s upstream industry. This is achieved in a partnership with Duta Marine.
PETRONAS stated that Rex holds 95% participating interest with Duta Marine holding the remaining 5% in both PSCs. Rex brings to the table significant operating experience and expertise in developing and producing small oil fields in the Middle East as well as participation in joint ventures in the North Sea.
The fields were offered during the Malaysia Bid Round 2020 (MBR 2020) based on the SFA fiscal terms introduced. It is in with PETRONAS’ commitment to monetising small discovered resource opportunities in Malaysian waters.
“These previously discovered fields have total estimated recoverable of 12.7 Million Stock Tank Barrels (MMstb) for the Rhu-Ara cluster and 10.7 MMstb for the Diwangsa cluster.”
Rhu-Ara and Diwangsa clusters
The Rhu-Ara Cluster lies within the Penyu Basin 150km off the coast of the oil centre, Terengganu. It consists of the Rhu and Ara fields.
Meanwhile, the Diwangsa Cluster lies on the north-western side of the Malay Basin. It consists of Diwangsa, Bubu, Korbu and Lerek fields.
According to the statement, both clusters are now ready for development under the SFA PSC terms. It incorporates a simplified fiscal model and governance process.
Senior Vice President of Malaysia Petroleum Management (MPM), Mohamed Firouz Asnan trusts Rex’s capability in developing small fields abroad can be deployed in the Rhu Ara fields. He said it could unlock the potential in Penyu Basin as well as the development of the Diwangsa Cluster.
The MPM are pleased to see that the SFA terms have become more attractive to the investors. This is because it validates the efforts taken to turn Malaysia into a growth hub for the investors.
(Source: PETRONAS Press Release)