Shell Malaysia announced Tuesday that it has signed a new production sharing contract (PSC) with state-backed Petronas to explore for oil and gas on Block SK319, offshore Sarawak.
The agreement will see Shell undertake an initial three year exploration program to explore an area totaling 1,053 square miles (2,727 square kilometers) within the block. Sarawak Shell Berhad is the operator of the block, and it has a 50 percent participating equity. Petronas Carigali holds the remaining stake.
Shell said in a statement that the PSC forms part of Shell's Low Cost Exploration & Development focus which will allow the company to carry out a multi-well exploration campaign to further explore and de-risk the mature carbonate pinnacle play in Central Luconia.
The announcement comes close on the heels of Petronas' announcement Monday on two major gas discoveries – which combined could contain over 4 trillion cubic feet (tcf) of natural gas – also sited offshore Sarawak.
Petronas stated earlier in a published presentation in June that it aims to increase gas production offshore Sarawak in line with the country's aim to establish itself as Asia's liquefied natural gas trading hub by 2020.
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