Hornbill Unleashed

May 23, 2017

CM: Petronas seeking partners to develop SK316

Filed under: Politics — Hornbill Unleashed @ 8:03 AM

Image result for Abang Johari Tun OpengPETRONAS is seeking capable and reliable partners to explore the potential for oil and gas in the SK316 offshore region, revealed Chief Minister Datuk Amar Abang Johari Tun Openg.

He assured Sarawakians that Petronas has consulted the state government on the matter.

“It is a very deep new area and secondly, you need new technology where Petronas also has no such technology.

“So what Petronas does is to invite other countries which have the technology because the area has a lot of CO2 (carbon dioxide) and sulphur content. So the moment you extract (oil and gas) you need to put in CO2.

“So you need a partner who has the technology. We have been consulted on this matter,” Abang Johari clarified to the media after his winding-up speech at the State Legislative Assembly here yesterday.

Earlier in his speech, he disclosed that the state government will form a Sarawak-owned commercial entity alongside Petronas to explore and produce oil and gas in marginal or brown fields in Sarawak that have feasible potential to produce oil and gas. Furthermore, Sarawak will also participate in downstream activities.

“I am glad to inform the august House that as a pilot project, Sarawak has embarked on the manufacture of methanol and its derivatives with the gas assigned to Sarawak. Based on a pre-feasibility study for a proposed methanol and methanol derivatives plant project in Bintulu, an agreement was signed on April 22, 2017 for Petronas to supply natural gas to the proposed project and for the sale of methanol from the proposed project to Petronas,” he emphasised.

Abang Johari also disclosed that the Sarawak government is also actively negotiating with Petronas on the details of the shareholders agreement on the 10 per cent equity in MLNG Plant Train 9.

“We are also working with Petronas for a larger equity in the MLNG 2 plant. Let me emphasise here that Sarawak’s equity in the MLNG projects is our privilege and not anybody else is allowed to participate in these projects,” he said.

The Chief Minister stressed that Petronas has also been directed by the Sarawak government that Sarawak must be consulted on the utilisation of gas from any new fields.

“This is to ensure that Sarawak has the first right of refusal in using the new sources of gas for the development of our oil and gas industries as well as the development of other industries in Sarawak.

“In fact, as a result of several recently signed agreements, Petronas has committed to supplying 450 million standard cubic feet per day of natural gas for the development of power and non-power sectors in Sarawak,” Abang Johari said.

Abang Johari who is also the Minister of  Urban Development and Natural Resources pointed out that the State government will continue negotiations with Petronas, which was started by his predecessor, the late Chief Minister Datuk Patinggi Tan Sri Adenan Satem.

“In doing so, I have to take cognisance of the fact that we are negotiating within an unfavourable environment when the price of oil is low and the cost of production is competitive but under such a situation, the request of a 20 per cent royalty, though still on our agenda, has to be managed with care,” he reiterated.

He assured that under the current low oil price, it does not mean that the Sarawak government is abandoning the request but only when the global oil situation improved significantly, will it be meaningful for the discussion between Petronas and the Sarawak government to be resumed on the issue of the oil royalty.

“In the meantime, however, in lieu of the royalty increase, I have decided that we should continue to pursue our interests in the development of the oil and gas industry in Sarawak, and further negotiate with Petronas ways and means by which Sarawak can participate in both the upstream and downstream activities of Petronas in Sarawak.”

He also told the august House that Petronas has committed to a baseline value of RM2.1 billion worth of contracts to be awarded to Sarawak companies each year.

“Since 2013, Petronas has given RM15.8 billion worth of contracts to Sarawak companies. The number of Sarawak licensed or registered companies with Petronas has increased from 314 in 2013 to 420 in 2016.  We will continue to develop ways and means to enhance the participation of Sarawak companies in the oil and gas industry,” he said.

Meanwhile, the Chief Minister also announced that Brooke Dockyard, which is Sarawak government-owned, has been awarded the Bokor and Anjung projects for offshore works worth a total of RM490 million.

“The scope includes design, construction, offshore installation, hook up and commissioning the entire value chain of an offshore development project. This confidence paves the way for further involvement in marginal fields offshore of Sarawak which we can capitalise on,” he said.

Source : The Borneo Post Online


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