Shell Malaysia plans to invest about 1 billion ringgit ($1=MYR3.80) in oil and gas exploration and production projects in 2002.
The official said Shell Malaysia will focus its efforts this year on continued exploration drilling in Block E, offshore Sarawak, and Block G, offshore Sabah. Both blocks will require deepwater drilling, the official added.
The company plans to drill four exploration wells in Block G this year and one exploration well in Block E.
The official said the size of oil and gas reserves in the two blocks hasn't yet been determined. Shell Malaysia expects to find significant reserves of oil and gas in Block E and G, he said.
Shell Malaysia, which is a unit of Royal Dutch/Shell Group (RD), also plans to drill additional production wells at its South Furious field, offshore Sabah, the official said.
"We're thinking of starting in April," the official said. "But we haven't determined which one to start with first."
If the results of the drilling program are successful, the company may begin oil production from Blocks E and G next year, the official added.
"Even if we find gas, production wouldn't start for maybe as long as five to 10 years because of commercial (marketing) issues," the official said.
Earlier last year, Shell Malaysia Chairman Lim Haw Kuang said half of the company's medium-term investment will be in the upstream sector. He said the company plans to invest MYR20 billion over the next five years, half of which will be allocated to oil and gas upstream projects.
Lim said Shell has so far located reserves of 5 trillion to 6 trillion standard cubic feet of gas off Sabah.
Shell Malaysia operates the South Furious field in a joint venture with Petronas Carigali Sdn., a unit of Malaysia's state oil and gas company Petroliam Nasional Bhd. (P.PET).
Shell Malaysia operates Block E in a joint venture with Petronas Carigali and Diamond Gas Holdings Sdn., a unit of Mitsubishi Corp. (J.MIB). Shell Malaysia operates Block G in a joint venture with Petronas Carigali and Conoco Inc. (COC).