Korean Player Enters Malaysian Market With Block Off Sarawak

Oil giant Petronas has signed a Production Sharing Contract (PSC) with SK Earthon and Petroleum Sarawak Exploration & Production (PSEP) for Block SK427 off the coast of Sarawak.

SK Earthon, a wholly-owned subsidiary of South Korea’s SK Innovation, will be the operator of Block SK427 with an 85 percent participating interest while PSEP will hold the remaining 15 percent.

Signing on behalf of Petronas was the Senior Vice President of Malaysia Petroleum Management (MPM) Mohamed Firouz Asnan. SK Earthon was represented by its Director and Head of Exploration & New Venture Office Suntaek Bang while PSEP was represented by its Director and Chief Operating Officer James Foo.

Block SK427 is located within the prolific area of Balingian and Tatau hydrocarbon provinces covering an area of 1,293 square miles.

The block is situated in a proven hydrocarbon system and has promising hydrocarbon potential to be unlocked. Several significant hydrocarbon discoveries were made in 2021 in the Balingian province near the block, namely Sirung-1 and Hadrah-1 wells.

“We welcome SK Earthon to Malaysia’s upstream industry and as a new player, they bring vast experience in exploration and production, garnered from their worldwide exploration activities. Petronas will also collaborate with SK Earthon in the Carbon Capture and Storage sector, in line with Petronas’ aspiration to achieve Net Zero Carbon Emissions by 2050,” Mohamed Firouz said.

“SK427 PSC is one of the six blocks awarded from the Malaysia Bid Round 2021, demonstrating Malaysia’s potential as an attractive investment destination for companies seeking to grow their energy portfolio and thrive in the energy transition.

“Under our ‘right asset, right player’ strategy supported by a progressive fiscal regime, we hope to fully maximize the long-term value of the nation’s hydrocarbon resources,” he added.

The Malaysia Bid Round is an annual Malaysia licensing round hosted by MPM which offers investors diverse upstream opportunities, including exploration acreages, discovered resource opportunities, and late-life producing assets.

MBR 2022, themed ‘Your Advantaged Energy is Here’, was launched on January 27 and will run until June 30, 2022. It offers 14 exploration blocks, six Discovered Resource Opportunities clusters, and one Late Life Asset cluster.

It is worth noting that Petronas manages petroleum arrangements in Malaysia and provides stewardship of upstream petroleum activities through MPM.

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