PETRONAS Carigali has signed a Participation Allocation Agreement (FOA) with SMJ Energy, a company controlled by the Sabah state government. This agreement provides for the transfer of PETRONAS Carigali’s 20% non-operating interest in the North Sabah Enhanced Oil Recovery Production Sharing Contract, originally signed in 2011.
With this transaction, PETRONAS Carigali’s interest in the North Sabah PSC is reduced to 30% while SMJ Energy takes control of the non-operating 20%. SEA-Hibiscus remains as operator of the block, retaining the remaining 50%.
North Sabah PSC reconfiguration strengthens local presence
This adjustment is part of the commitments established in the Commercial Collaboration Agreement (CCA) signed in 2021 between the state government of Sabah and PETRONAS. The measure strengthens the presence of local stakeholders in the management of energy resources and consolidates a national strategy aimed at the sustainability of the upstream sector.
During the signing ceremony, which was attended by the Chief Minister of Sabah and the CEO of PETRONAS Group, the importance of building partnerships aligned with common goals and mutual trust was highlighted. Hazli Sham, CEO of PETRONAS Carigali, underlined the value of cooperation for capacity building in the region.
Diversification of alliances in other blocks
This is not the first joint step between the two entities. In 2023, SMJ Energy and PETRONAS Carigali signed another agreement giving SMJE a stake in the Samarang PSC. They also share interests in blocks SB403, SB306A and SB306B. Beyond exploration and exploration and productionBeyond exploration and production, SMJE has a 25% interest in PETRONAS Chemicals Fertiliser Sabah and PFLNG 3.
Consolidation of the shared management model
The North Sabah blockwhich includes the Barton, South Furious, SF30 and St Joseph fields, is located offshore East Malaysia. Its management under the shared participation model has allowed it to maintain stable production through enhanced oil recovery (EOR) techniques, consolidating Sabah as a strategic energy node in the region.
The agreement reinforces PETRONAS’ policy of fostering partnerships with state-owned operators, integrating local players into the energy value chain while advancing self-sufficiency and regional industrial development objectives.
Source and photo: PETRONAS