By Adam K
It was reported last month that Petronas had awarded the new field development plan (FDP) of the Beryl gas field off the Sarawak coast in October 2017 to JX Nippon Oil & Gas Exploration (Nippon Oil).
So, the Japanese firm and Petronas Carigali will form another joint venture on the development, production and monetisation of Sarawak’s gas reserves.
It is uncertain how Petros, the newly-formed state entity formed by the Sarawak state government in June last year to participate in oil and gas activities, will participate or enjoy, if at all, any of the returns generated by the production and sale of the gas from the Beryl field development.
Likewise, for the gas produced from the other Nippon Oil and Petronas Carigali fields of Layang and Helang, situated adjacent to Beryl.
The gas produced in these three fields are piped and sold to the Petronas liquefied natural gas (LNG) plant in Bintulu, Sarawak.
Contrary to what the Sarawak state government had been saying earlier, it appears Petros has not announced any interest in this new gas block for development.
It is also uncertain if Petros or any Sarawak company will participate or benefit from the service contracts in the development and production of the new Beryl gas field, and the producing adjacent fields of Layang and Helang, linked to Beryl, including the major FPSO contracts for Layang and the fabrication contracts for the Beryl platform.
To participate in the Beryl field development, Petros must have a stake in the PSC (Petroleum Sharing Contract), like Petronas Carigali, while Nippon Oil remains the contractor or the field operator responsible for the development and production of the Beryl gas field.
Petros should also have a similar stake in the Layang and Helang gas fields, together with Petronas Carigali and Nippon Oil.
For Sarawak’s interest to be fairly represented, it would be reasonable for Petros to also sit in the joint management committee for the Beryl, Layang and Helang gas fields.
This key interest in the joint management will allow Petros to ensure fair representation of Sarawak companies in the major service contracts like the FPSO, fabrication, installation and offshore marine vessels.
Such direct participation by Petros will also allow for the capability-building process to take place. This is required in order to help the local Sarawak population develop the competencies needed.
Until Petros participates in the exploration and production of the oil and gas blocks in Sarawak, Petros will not be able to develop the competencies to be a real oil and gas player in Sarawak.
Adam K is an FMT reader.
The views expressed are those of the authors and do not necessarily reflect those of FMT.