Thursday, 11 December 2014

Be more resolute and aggressive in demanding better deals for Sarawak, See tells Adenan

KUCHING, Dec 11, 2014: Chief Minister Adenan Satem has been urged to be more resolute and aggressive in safeguarding Sarawak's  limited petroleum resources and securing the development of upstream petroleum projects.

"It appears that we are lagging behind Sabah in the development of upstream petroleum projects, with the awarding of two production sharing contracts (PSCs) in Sabah to a consortium of SapuraKencana Energy Sabah Incorporated (SKESI), M3nergy Berhad and Petronas Carigali Sdn Bhd," Sarawak PKR vice chairman See Chee How (picture, left)  told reporters today.


He said SKESI, a wholly-owned subsidiary of SapuraKencana Petroleum Bhd, holds 70% of the joint venture, M3nergy Berhad, a Sabah government-owned company has 25% interests while Petronas Carigali Sdn Bhd owns the remaining 5% shareholding.

He said the two PSCs are involved in the exploration, development and production of petroleum from fields identified and known as SB331 and SB332, without any foreign shareholding and without a foreign company operating the fields.

See said the two PSCs, which commenced on Nov 20, 2014, are for a period of 27 years - comprising three years for exploration, four years for development and 20 years for production.

"Most  significantly, the Sabah government, through its wholly-owned oil and gas company M3nergy Berhad, has made headways with their direct interests in upstream petroleum projects and increased its participation in the oil and gas industry.

"While we have taken a small step forward, after the historic State Assembly resolution to demand an increase in petroleum royalty from 5% to 20%, the Sabah government has achieved a giant stride to the fore," See, who is also Batu Lintang State lawmaker, said.

He revealed that this year, SKESI has completed their five wells drilling campaign in Sarawak and has made significant gas discovery at Teja-1, Gorek-1, Larak-1, Legundi-1 and Bakong-1 wells and have found more than three trillion cubic feet of gas.

He said SKESI will carry out another five wells exploration campaign next year.

"This upstream petroleum and gas development project under the SK408 production sharing contract (PSC) involves a block with an area of approximately 1,729 sq miles or 4,480 sq kilometres, located in the shallow water 74 miles offshore Sarawak," he said.

He said this PSC was awarded to the consortium of SapuraKencana Energy Sarawak Incorporated (40% shareholding), Petronas Carigali Sdn Bhd (30%) and Sarawak Shell Berhad (30%).

See stressed:"Do not be deceived or misled by the word "Sarawak" appearing in the names of SapuraKencana Energy Sarawak Incorporated and Sarawak Shell Berhad. The truth is Sarawakians own absolutely nothing in these business entities."

He said SapuraKencana Petroleum Bhd also owns stakes in several other PSCs in Sarawak.

"In view of the participation of Sabah state-owned M3nergy Berhad in the two PSCs, our Sarawak state government must be resolute and more aggressive to ask for shares of equity and direct participation in the upstream petroleum PSCs involving the exploitation and production of oil and gas and related products in Sarawak," See said.

He demanded:"We call on the state government to demand for such equity holdings, through a state-owned sovereign wealth fund, in the PSCs that are to be awarded and those that are up for negotiation for extension of their terms."





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