Shell Sees Malikai Project in Malaysia as Boosting Deepwater Ambitions

Shell Sees Malikai Project in Malaysia as Boosting Deepwater Ambitions
Shell-operated Malikai deepwater project offshore Malaysia supports the company's aims of staying at the forefront of the global deepwater industry.

Royal Dutch Shell plc planned to stay at the forefront of the global deepwater oil and gas industry and the Malikai deepwater tension leg platform (TLP) project offshore Sabah, Malaysia would strengthen its position in achieving the goal, Chairman of Shell Malaysia Iain Lo revealed at the sail away ceremony Friday marking the completion of onshore fabrication and commissioning of the Malikai TLP, local media Borneo Post reported Monday.

"The merger with BG Group demonstrates Shell’s commitment to deepwater and in Malaysia, this commitment will translate to continued development and exploration in the deepwater," he said.

A joint venture comprising France's Technip S.A. and Malaysia Marine and Heavy Engineering Holdings Berhad (MMHE) completed onshore fabrication and commissioning of the 27,500-ton TLP, the first to be designed and fabricated in Malaysia, at Pasir Gudang, Johor, earlier this month. The TLP will soon be transported 870 miles (1,400 kilometers) to the Malikai oil field, located 62 miles (100 kilometers) offshore Sabah in water depths of 1,640 feet (500 meters), for installation.

When ready for first oil in 2017, the Malikai deepwater project -- which has been developing as planned and on budget -- will have a peak production of 60,000 barrels per day.

Shell Malaysia's top executive said the Malikai TLP, which has accommodation for 90 staff, would be operated mainly by Malaysians. In the development phase, Lo noted that an overwhelming majority of the project staff were Malaysians, who had proven their capability to build deepwater projects in the country.

“It really has demonstrated the maturity of our deepwater ecosystem here in Malaysia. It is now our collective duty to ensure that this hard-built capability, this ecosystem, continues to develop and continues to thrive ... Shell will do its part but everyone in this ecosystem must also play their role,” he said, as reported in the Borneo Post.

Present at the Malikai TLP sailaway ceremony, held at MMHE West yard in Pasir Gudang, were Petroliam Nasional Bhd (PETRONAS) President and Group CEO Wan Zulkiflee Wan Ariffin, MMHE Chairman Nasarudin Idris, ConocoPhillips Co. Asia Pacific and Middle East President Bill Bullock and Technip Asia Pacific President Arnaud Pieton.

Shell is the operator of the Malikai project, holding 35 percent interest, while ConocoPhillips also owns a 35 percent stake in the development and the remaining 30 percent is held by PETRONAS' upstream arm PETRONAS Carigali.

Meanwhile, Borneo Post reported Tuesday that Shell and its partners are still evaluating the 10 gas discoveries they made in Sarawak and one in Sabah over the past two years. Shell is operator of two of the finds in Sarawak and one in Sabah and has equity in the remaining discoveries.

“We have made significant discoveries, both us and our partners, made a lot of discoveries, predominantly in the Sarawak side. But we also have plans to look into Sabah ... altogether it is quite a lot of gas in that region and each one of us is taking our time to make sure that we study (them) properly,” Shell Global Solutions Malaysia, Projects and Technology Managing Director Simon Ong said, as cited by Borneo Post.

“We have a very active exploration program, we have one of the biggest exploration expenditure in this country about $100 million per year, in the last last few years," Ong added.

Chee Yew has covered the upstream and downstream sectors of the oil and gas industry in Asia for more than 15 years. Email Chee Yew at cheeyew.cheang@rigzone.com

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