The state’s wholly-owned SMJ Sdn Bhd (SMJSB) will be offered a back-in option of up to 20% participating interest, exercisable upon work completion commitments or commercial discovery, whichever comes earlier.
This essentially means the Sabah government, via SMJSB, will have a 20% stake in the PSC if the exploration proves to be successful.
Block SB409, an area of 14,556 sq km located south west offshore of Sabah, was awarded to PCSB and EPMV by Petronas during its 2022 Malaysia Bidding Round.
A statement from the Sabah chief minister’s office said the state government is pursuing more deals with Petronas, which will be announced in due course.
It said the LoU is the Gabungan Rakyat Sabah-led state government’s “latest achievement” following the signing of the commercial collaboration agreement (CCA) with Petronas on Dec 7, 2021.
A greater say in Sabah’s oil and gas production
The CCA gives the state government, through SMJSB, increased revenue share, and greater participation and say in the oil and gas production and its value chain in Sabah, the statement said.
Chief minister Hajiji Noor has assured the CCA will create a more inclusive environment for the oil and gas industry including offshore and onshore, as it has been the state’s aspiration to “get more from its oil and gas production”.
It was reported on Dec 21 last year that Prime Minister Anwar Ibrahim had agreed to transfer regulatory power over Sabah’s gas supply back to the state, in realisation of the Malaysia Agreement 1963 (MA63). The regulatory power would be transferred from Putrajaya through Petronas to the state.
In welcoming the move then, Hajiji said the state government was steadfast in its pursuit of taking control and management of its own oil and gas resources.
“This move had already been done in Sarawak, and now it will be done for Sabah upon consent of the Yang di-Pertuan Agong,” he said.
The LoU was signed in the presence of SMJSB CEO Dionysia Aloysius Kibat, PCSB CEO Hasliza Othman and EPMV head Aliff Anwar in Kuala Lumpur today.