A joint demarcation and survey activities have agreed by Brunei and Malaysia which is will begin next year. The move shows a clearer picture of the role international companies will play in a development expected to significantly boost the Sultanate's reserves.
On previously, it's disputed offshore oil and gas blocks. The dispute had centred around two blocks lying some 100 km offshore from Brunei, which the Sultanate referred to as J and K while Malaysia called L and M. The Sultanate claims an exclusive economic zone stretching 374 km from its coast.
Announced on September 22, Petronas and Petroleum Brunei had signed a new deed of agreement (DOA) for a Production Sharing Agreement (PSA) for the first of the blocks (Block J) which has been renamed CA1. An agreement on the second block, renamed CA2, was imminent.
Brunei had awarded development of Block J to a Total-BHP Billiton-Amerada Hess consortium and Block K to a consortium of Shell Deepwater Borneo (with a 50 per cent stake), Mitsubishi (with 25 per cent), and ConocoPhillips (with 25 per cent), while Malaysia had awarded the blocks in 2003 to state oil and gas firm Petronas and the United States' Murphy Oil.
The DOA allows the original consortium developing Block J to resume work, while the consortium itself is expanded to include Petronas Carigali Overseas and Canam Brunei, a wholly-owned subsidiary of Murphy Oil.
The expansion of the consortium does mean a change in the relative stakes, yet Total remains the largest party, with 54 per cent down from the original 60 per cent. BHP Billitons stake shrinks from 25 per cent to 22.5 per cent, and Hess stake goes down from 15 per cent to 13.5 per cent. This frees up a 10 per cent stake, which is to be taken by Petronas and Canam Brunei.
While the stakes may have been reduced, the block will be enlarged from 5,000 sq km to 5,850 sq km.
Total Exploration and Productions (E&P) senior vice-president of geosciences, Marc Blaizot, said that the French major was very satisfied with the signature of this agreement, which will enable exploration operations to resume on this promising block and a drilling campaign to start within a short period of time based on the seismic studies already performed.
A 3-D seismic examination of the region before the dispute was one of the most extensive for its time. Kikeh currently produces some 110,000-150,000 barrels of light, sweet crude per day. The blocks will also benefit from Totals considerable experience in drilling in deep water with depth ranges from 1 km to 2.75 km within the zone.
The new deal may also herald closer cooperation in oil and gas exploration and production (E&P) between Brunei and Malaysia.
On previously, it's disputed offshore oil and gas blocks. The dispute had centred around two blocks lying some 100 km offshore from Brunei, which the Sultanate referred to as J and K while Malaysia called L and M. The Sultanate claims an exclusive economic zone stretching 374 km from its coast.
Announced on September 22, Petronas and Petroleum Brunei had signed a new deed of agreement (DOA) for a Production Sharing Agreement (PSA) for the first of the blocks (Block J) which has been renamed CA1. An agreement on the second block, renamed CA2, was imminent.
Brunei had awarded development of Block J to a Total-BHP Billiton-Amerada Hess consortium and Block K to a consortium of Shell Deepwater Borneo (with a 50 per cent stake), Mitsubishi (with 25 per cent), and ConocoPhillips (with 25 per cent), while Malaysia had awarded the blocks in 2003 to state oil and gas firm Petronas and the United States' Murphy Oil.
The DOA allows the original consortium developing Block J to resume work, while the consortium itself is expanded to include Petronas Carigali Overseas and Canam Brunei, a wholly-owned subsidiary of Murphy Oil.
The expansion of the consortium does mean a change in the relative stakes, yet Total remains the largest party, with 54 per cent down from the original 60 per cent. BHP Billitons stake shrinks from 25 per cent to 22.5 per cent, and Hess stake goes down from 15 per cent to 13.5 per cent. This frees up a 10 per cent stake, which is to be taken by Petronas and Canam Brunei.
While the stakes may have been reduced, the block will be enlarged from 5,000 sq km to 5,850 sq km.
Total Exploration and Productions (E&P) senior vice-president of geosciences, Marc Blaizot, said that the French major was very satisfied with the signature of this agreement, which will enable exploration operations to resume on this promising block and a drilling campaign to start within a short period of time based on the seismic studies already performed.
A 3-D seismic examination of the region before the dispute was one of the most extensive for its time. Kikeh currently produces some 110,000-150,000 barrels of light, sweet crude per day. The blocks will also benefit from Totals considerable experience in drilling in deep water with depth ranges from 1 km to 2.75 km within the zone.
The new deal may also herald closer cooperation in oil and gas exploration and production (E&P) between Brunei and Malaysia.
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