Far East: Malaysia

FAR EAST

Tony Sitathan, Contributing Editor, Singapore (Indonesia, Malaysia, Thailand, Viet Nam, Myanmar, Brunei, Cambodia and MTJDA)

Malaysia

Malaysia has come back strongly from its economic crisis years of 1997 and 1998. Using prudent economic policies and fiscal measures initiated by Daim Zainuddin, Finance Minister, it has managed to experience real GDP growth rates of 7.5% in 2000, but GDP growth for 2001 is forecast to slow to less than 5.6%.

Malaysia has crude and condensate reserves of around 5.0 billion barrels, down from 5.5 billion in 1996. This has prompted its state oil and gas company, Petronas, to look for international exploration ventures and partners. In terms of gas reserves, Malaysia has 81.7 Tcf. It exports 150 MMcfd to Singapore, and it also imports gas from Indonesia.

Exploration. To increase crude output, Petronas has started several initiatives to arrest the fall in its reserves, as well as find prospective sources of oil fields outside its national boundaries.

   Beyond Petroleum (BP) intends to double its investment by 2010 in oil exploration in the Malaysia-Thailand Joint Development Area . The MTJDA covers Blocks A-18, B-17 and C-19. Lundin Malaysia, a subsidiary of Lundin Oil AB, recently announced an oil discovery in offshore Block PM-3 CAA. Production is expected to climb to 40,000 bopd and 450 MMcfd by late 2003. The main well, East Bunga Raya 1, has some seven new oil zones and two low-CO₂ gas reservoirs; oil rate was tested at 5,500 bopd. It also intends to increase exploration activities in its newly awarded Block PM305 (2,200 km²), which contains the Ophir oil discovery.

   Amerada Hess has announced a significant offshore oil / gas find. The Cendor 1, in PM304, had a TD of over 4,000 ft and flows of 2,480 bopd and 5,000 Mcfd. Petronas exploration and production subsidiary, Carigali Sdn Bhd, made an oil discovery in the Samarang-Asam Paya PSC area offshore Sabah with its Alab 1 wildcat.

Amerada Hess struck a significant discovery in its second wildcat offshore Malaysia, in Block PM304. Last March, the Cendor 1 was drilled to 5,873 ft, TD, in 207 ft of water and flowed 2,840 bopd and 5 MMcfgd. The find will now be appraised. (Photo courtesy of Transocean Sedco Forex)

   Murphy Serawak Oil, a subsidiary of Murphy Oil Corp., successfully set up its first exploration well, the West Patricia 2, operating offshore in Serawak on Block SK309. Its tested oil flow was 2,900 bopd, with a gas / oil ratio of 290, from a single zone at more than 3,000 ft. Murphy also holds interest in Block SK311 and deepwater Block K. It intends to carry out 3-D seismic surveys in the latter part of this year.

Drilling / Development. Esso Production Malaysia Inc. (EPMI) has awarded three-year drilling contracts worth $98 million to Smedvig ASA to operate its rigs T-2 and T-3. EPMI has decided to invest in five offshore satellite platforms, to be placed in Seligi, Irong Barat, Raya, Lawang-Langat and Serudon fields, 124 to 173 mi off the coast of Trengganu.

   Lundin Oil, together with Petronas Carigali and PetroVietnam Exploration and Production, has started two additional development wells and workovers for four existing wells in the Bunga Kekwa field. Two development wells, BK A8 and A, tested 5,880 and 4,375 bopd, respectively. Drilling started in East Bunga Raya 1 exploration well in PM 3 CAA at mid-year. Phase 2 of the project has been already planned for third-quarter 2003, to exceed 40,000 bpd and 250 MMcfd gas.

Production. In terms of gas production, Malaysia produced about 5 Bcfd in 1999 and 2000. It intends to be a major producer and processor of gas. To that end, it intends to expand its Bintulu LNG complex in Serawak. It has signed a contract with a consortium headed by Kellogg Brown and Root to construct the MLNG Tiga facility, with a capacity of 7.6 MMt or 370 Bcf per year.

   EPMI, an affiliate of ExxonMobil, accounts for nearly half of all crude oil production in Malaysia. It operates seven fields and one-third of its production comes from Seligi field. Its Seligi F platform has 28 wells.

   Lundin Oil, in joint collaboration with Petronas and PetroVietnam, has started production in long-delayed Bunga Kekwa oil field. Production in April 2001 averaged 18,000 bpd and will be ramped up to 40,000 bpd by 2003. Lundin also clinched the PM305 block in November 2000. Sabah Shell Petroleum, a unit of Shell Group, has increased production in its Kinabalu field to 36,000 bopd, plus 28 MMcfd gas. This is located in the SB 1 block, off the coast of Labuan.