Sapura E&P keeping a low profile for high rewards

Date: 8.05.2017.

Publication Source: Upstream Online

Sapura Exploration & Production is the quiet achiever of the Malaysian upstream sector, staying out of the spotlight while it progresses its plan to become a major gas producer.

The company’s low-profile approach is partly due to the fact it is a division of the large integrated services company Sapura Energy (formerly SapuraKencana Petroleum), which itself prefers to avoid the limelight.

Before the group completed the acquisition in early 2014 of Newfield Exploration’s Malaysian business, its exploration and production division was insignificant.

However, the injection of the former Newfield assets added serious heft in the shape of producing fields, exploration licences and, significantly, a large volume of discovered undeveloped gas off Sarawak.

Maiden development

For the past three years, Sapura E&P has continued producing oil and gas at the East Piatu and East Belumut fields off Peninsular Malaysia, drilled new gas discoveries off Sarawak, and progressed its maiden field development — the B15 gas project in Block SK 310, which is due on stream in October 2017 at peak output of 100 million cubic feet per day of gas.

The industry downturn scuppered some of its growth plans — namely, the acquisition of a suite of assets in Vietnam from Petronas, and the addition of marginal field developments.

Its exploration successes off Sarawak have lifted its total net reserves and resources to about 243 million barrels of oil equivalent, and the company is hoping that by 2022 it could be producing a gross volume of between 800 MMcfd and 900 MMcfd, making it a major Malaysian gas producer.

Its portfolio of gas off Sarawak is central to this growth.

Block SK 408 contains seven discoveries from eight wells drilled. Five of the seven are understood to be commercial, and three are in the development stage – Gorek, Larak and Bakong, which have resource sizes ranging from 0.5 Tcf to 1.5 Tcf. Sources say talks for gas sales agreements will take place this year before moving into a field development which is a likely tie back to Shell’s F6 platform, with a projected start up in late 2019 or early 2020.

Jewel in crown

The jewel in the crown in Block SK 408 is the 2016 Jerun gas discovery, which contains up to 3 Tcf.

First gas from Jerun is targeted in about 2022, while the B14 discovery in Block SK 410 is the last cab off the rank given the high hydrogen sulfide volumes in the reservoir, say sources.

In the coming year, Sapura E&P plans to drill 11 wells — seven are infill wells at the West & East Belumut fields; one is the B15 development well; and three are exploration wells in SK 408.

The jack-up drilling rig Ensco 106 is already working for Sapura E&P on a five-well contract that began in March, and it is understood another jack-up will be hired for the remainder of the Kuala Lumpur-based operator’s 11-well campaign.

All of the company’s Sarawak gas will be supplied to the Bintulu LNG facility in Sarawak.

The company currently has operator and non-operator interests in nine production sharing contracts including three permits off Sarawak and two onshore Sabah; its deep-water permit off Sabah was dropped about one year ago. Malaysian securities firm TA Securities says Sapura Energy is still keen to acquire new oil and gas assets.


“We are positive on this, given that it benefits Sapura’s internal EPCIC fleet.

Recall that the latter is a key beneficiary of jobs dished out by the E&P segment via open tender,” says TA.

Indeed, Sapura Energy’s engineering and construction division is tasked with the fabrication, transportation and installation of the B15 production platform and 35-kilometre subsea pipeline, which it will no doubt perform quietly and effectively.

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Sapura Energy starts up B15 field offshore Sarawak


Offshore staff

KUALA LUMPUR, Malaysia – Sapura Energy subsidiary Sapura Exploration and Production has produced first gas from the B15 field in the SK310 production-sharing contract (PSC) area offshore Sarawak.

This is the company’s first offshore development, and work was completed within two years of sanction. B15 was discovered in late 2010.

Development is based on a processing platform with a 35-km (22-mi) export pipeline connected to the existing B11 infrastructure for onward transmission to the Malaysia Liquefied Natural Gas complex at Bintulu, Sarawak.

Over the past two years Sapura E&P has made further significant gas discoveries and these should come onstream over the next two to five years, said Tan Sri Dato’ Seri Shahril Shamsuddin, president and group CEO.

Partners in the PSC are Petronas (40%) and Mitsubishi subsidiary Diamond Energy Sarawak (30%).

Last month, Sapura Energy contractor subsidiaries won various offshore construction contracts. Details are as follows:

  • Sapura Fabrication (ex-SapuraKencana HL): EPCC services for Kinarut ERB West compressor upgrading project for Petronas. The three-year work scope involves removal of existing HP compressors and reinstallation of refurbished LP Compressors at EWDP-A; refurbishment of reinjection compressors to HP Compressors offshore at EWG-A; replacement of associated equipment, piping and instrumentation, process and utility tie-ins modifications and other related topside facilities brownfield modifications and improvements at ERB WEST and Kinarut platforms.
  • Sapura Fabrication, minor EPCC work for Petronas’ Bokor Betty brownfield and rejuvenation program. The four-and-a-half-year contract involves tie-in works at existing platforms including LADR-A and BNG-B and upgrades to existing Betty platform facilities, both to support Bokor EOR and redevelopment of the two fields.
  • Sapura Fabrication: EPCCI for full-field development Phase 2 facilities for Hess’ North Malay Basin project. The program, due to be completed by 2Q 2020, concerns supply and installation of a conventional three-legged terminal wellhead platform and a minimal wellhead platform and associated pipelines – Hess may opt to extend the scope to offshore transportation and installation.
  • Sapura Offshore (ex-SapuraKencana TL Offshore): sub-contract to perform transportation and installation of jackets, piles, bridges for the Bokor central processing platform project for Malaysia Marine and Heavy Engineering, to be completed by March 2020.
  • Sapura Offshore: offshore/onshore pipeline and terminal works for Fifth Oil Berth project for Mumbai Port Trust. The work scope includes installation of a 42-in. submarine pipeline with a 5-in. composite cable between the onshore terminal at Pir Pau, Mumbai and the terminal at Jawahar Dweep. All work is expected to be completed by this May.



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Mubadala Progresses on Pegaga Field After Sanction

26 March 2018


The development concept for the Pegaga gas field offshore Malaysia will comprise an integrated central processing platform consisting of an 8-legged jacket. Source: Mubadala Petroleum

Mubadala Petroleum, Petronas, and Royal Dutch Shell have reached final investment decision (FID) for the Pegaga gas field development. The three companies will partner to spend more than $1 billion developing the project, which will now proceed to the construction and installation stage.

Pegaga is located at about 108 m water depth in Block SK 320 offshore the East Malaysian state of Sarawak. The development consists of an integrated central processing platform (ICPP) with an eight-legged jacket. The facility is designed for gas throughput of 550 million scf/D of gas plus condensate. The produced fluids will be transferred through a new 38-in. subsea pipeline tying in to an existing offshore network and subsequently to the onshore Malaysia liquefied natural gas (LNG) plant in Bintulu. Mubadala said in a statement that the first gas is expected in 3Q 2021.

The development is Mubadala’s first development in Malaysia. It has assets in eight countries with a primary focus on the Middle East (Qatar, UAE, Oman) and Southeast Asia (Thailand, Vietnam, Indonesia, Malaysia). The company produced 320,000 BOPD across its assets.

Mubadala is the operator of SK 320 with a 55% working interest. Petronas holds 25% and Shell holds 20%.

In addition, Mubadala awarded an engineering, procurement, construction, and commissioning (EPCIC) contract to Sapura Energy, Malaysia’s largest oil and gas services company. Sapura said in a statement that it has already won approximately $765 million in contracts so far in 2018.

Pegaga is one of several developments expected in the area in the next couple of years. Rystad Energy predicted that the field will be the largest regional individual field FID of 2018 in its Southeast Asia 2018–2020 FID Forecast. Rystad estimates that 50 oil and gas fields will likely be approved for development over the next 3 years, requiring $28 billion of capital expenditure from FID to first production.


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Mubadala Petroleum signs production sharing contract for Indonesian gas field

The pact has the potential to unlock a new gas play for domestic consumption

The National

April 9, 2018

Updated: April 10, 2018 02:56 PM

Mubadala Petroleum, a subsidiary of the Abu Dhabi strategic investment firm Mubadala Investment Company, has signed the production sharing contract for Andaman I in Indonesia, which was awarded by Jakarta in the 2017 licence round.

Mubadala Petroleum is the operator of Andaman I and a partner in Andaman II, operated by UK-based Premier Oil, state news agency Wam reported on Monday.

For the Andaman I exploration block, Mubadala Petroleum will conduct sub-surface studies and acquire 3D seismic surveys in the first three years.

Andaman I and II are adjacent and located in the under-explored North Sumatra basin offshore Aceh, a region where Mubadala Petroleum has been active since 2011 through joint study agreements. The production sharing contracts have the potential to unlock a new gas play for domestic consumption in North Sumatra and long-term export prospects to the regional markets.

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Qatargas, EGAT to assess potential for FSRUs


Offshore staff

DOHA, Qatar – Qatargas Operating Co. has signed a memorandum of understanding (MoU) with the Electricity Generating Authority of Thailand (EGAT).

The two parties plan to jointly identify and evaluate best practices in the LNG industry, particularly in the sharing of knowledge and expertise in procurement of LNG, LNG transportation, and floating storage and regasification units (FSRUs).

In addition, the MoU provides scope for the possible supply of LNG to the Kingdom of Thailand.

The two companies will form a committee of representatives to execute the terms of the arrangement.

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Indonesia government shakes up Pertamina board, CEO Elia Manik dismissed

April 20, 2018

JAKARTA ( – Minister for State Owned Enterprise Rini Soemarno on Friday (April 20) shakes up the board of directors of state energy company PT Pertamina, only weeks after oil leakage hit Balikpapan Bay in East Kalimantan. The decision was made at the company’s extraordinary shareholders meeting.

President Director of Pertamina Elia Massa Manik was dismissed from his post only 13 months after he was appointed to the post (March 2017). He was replaced by acting President Director Nicke Widyawati.

Deputy SOE Minister for Mining, Strategic Industries and Media Fajar Harry Sampurno said the dismissal of the CEO was decided based on the inputs from the board of commissioners.  He was replaced along with four other directors.

Media speculated that the shake-up was related with a number of crucial issues that hit Pertamina in recent months,  including lack of supply of subsidized Premium fuel and slow-response of oil leakage that hit Balikpapan Bay.

Sampurno admitted that the commissioners did raise the two issues, which were also taken into considerations in changing the Pertamina board.

The other directors who were replaced are Director for Mega-project, Processing and Petrochemical Ardy N. Mokobombang, Director for Processing Toharso, Director for Asset Management Dwi W. Daryoto and Director for Corporate Marketing  Muchamad Iskandar.

Tanri Abeng, the chief commissioner of Pertamina, said the decision was related with the changes of structure of Pertamina board, where marketing director post was split into three, namely Corporate Marketing, Retail Marketing and Supply Chain Infrastructure. This change, coupled with other issues such as the rise of oil price, slow progress of petrochemical mega projects and other issues, were among considerations behind the shake-up.

Harry Sampurno hopes the changes will enable Pertamina to move quicker.

Following is the complete list of Pertamina Directors board:

Acting President Director and also Director of Human Resources: Nicke Widyawati
Director for Processing: Budi Santoso Syarif
Director for Finance: Arief Budiman
Director of Corporate Marketing: Basuki Trikora Putra
Director of Retail Marketing: Masud Hamid
Director of Asset Management: M. Haryo Junianto
Director MPP: Heru Setiawan
Director for Infrastructure : Gandhi Sriwidjojo



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Eni approves development plan for Merakes discovery, offshore Indonesia


MILAN — Eni announces the approval of a development plan for the Merakes field, offshore East Kalimantan, Indonesia. The energy minister granted approval just three months after the submission of the plan and less than 11 months after Eni started production from its deepwater Jangkrik asset in Muara Bakau, Indonesia.

The Merakes field is estimated to hold about 2 Tcf of natural gas, is in 1,500 m water depth, 35 km southwest of the Jangkrik floating production unit (FPU). The field was discovered by the Merakes 1 well in 2014 which encountered lean gas in high-quality reservoir sands of Pliocene age. In January 2017, Eni successfully drilled and tested the Merakes 2 appraisal well, recording excellent gas deliverability.

The proximity of Merakes discovery to the Jangkrik FPU will allow Eni to maximize synergies with existing nearby infrastructures as well as reduce costs and start-up time of this second deepwater development in Indonesia.

The approved plan foresees the drilling and completion of six subsea wells and the construction and installation of subsea systems and pipelines which will be connected to the Jangkrik FPU. The gas will be shipped through the existing pipelines from the Jangkrik FPU to the Bontang LNG processing facility in East Kalimantan.

Merakes production, combined with Jangkrik, will contribute to the life extension of the Bontang LNG facilities, which supplies LNG to domestic and export markets.

The approval of the Merakes development plan is a fundamental step to progress towards the final investment decision of the project. Merakes is another outcome of the Eni “near field” exploration and appraisal strategy. “We are proud of Eni’s partnership with Indonesia, a key country in the company’s global strategies,” said Eni’s CEO, Claudio Descalzi.

Eni is the operator of East Sepinggan PSC through its subsidiary Eni East Sepinggan Limited which holds 85% participating interest, while Pertamina Hulu Energy holds the remaining 15%.

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