Petronas reports major gas find

Dec 10, 2013 12:00 AM

Petronas has made a major gas discovery in waters off Sabah, Sarawak and Brunei, with production expected to start as early as next year.

In announcing this, Prime Minister Datuk Seri Najib Razak said the discovery in Block CA2 three days ago would greatly increase the country's oil and gas production revenue.

Describing it as significant, Najib said the biggest discovery was made in waters off Sabah, with details to be announced later.

"(Gas production) can take place as early as the end of the first quarter of next year," he told a press conference at the end of his visit here for the 17th Malaysia-Brunei Annual Leaders' Consultation.

Present were Foreign Affairs Minister Datuk Seri Anifah Aman, Home Minister Datuk Seri Dr Ahmad Zahid Hamidi, Sabah Chief Minister Datuk Seri Musa Aman and Sarawak Chief Minister Tan Sri Taib Mahmud.

Najib said his meeting with the Sultan of Brunei, Sultan Hassanal Bolkiah, has contributed to many positive developments and reflected the deep bilateral ties between both countries. Among others, he said, they had touched on the Exchange of Letters (EoL) signed in 2009 on the commercial arrangement for the development of the oil and gas sector, including hydrocarbon.

He said the cooperation between Petronas and Petroleum Brunei had resulted in positive developments following the Production Sharing Agreement (PSA) signed in 2010 for Blocks CA1 and CA2.

"Three days ago, gas was discovered in a large area of Block CA2, which is commercially viable," Najib said, adding that the new area would cater to the needs of Brunei LNG.

He said Petronas would continue its discussions to expand oil and gas activities in Block CA1 while considering exploration efforts in the shallow waters of blocks N and Q.

"Any straddling fields can be formalised through the utilisation arrangement model (a joint development venture based on provisional production and cost sharing)."

Najib said Brunei had also shown interest in investing in Progress Energy Cooperation Ltd, a Canadian energy company owned by Petronas and that Malaysia welcomed any significant investment by the sultanate in the sector.

The prime minister said he and Sultan Hassanal Bolkiah also discussed possible solutions to expediting an existing land demarcation exercise involving both countries.

Other matters discussed included tourism prospects to attract Australian tourists to Sabah and Sarawak, as Brunei has landing rights with Canberra; livestock investment in Keningau, Sabah and a possible hydropower generation venture in Sarawak.

In a joint statement issued following the annual consultation, both leaders reaffirmed their commitment to deepening mutually beneficial cooperation and reviewed with satisfaction the progress made in the implementation of the EoL.

During the meeting, two agreements on hydrocarbon resources cooperation and cooperatives development were signed by both governments.

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