KUALA LUMPUR, Feb 24 (Bernama) — MIDF Research said the heads of agreement (HoA) inked between Petronas Carigali Sdn Bhd and Sabah’s SMJ Sdn Bhd paves the way for both parties to unlock the full potential of Sabah’s oil and gas industry.
In a research note today, MIDF Research said as a zone with hydrocarbon-rich bedrock, Sabah has a high potential to leverage its economic development on the oil and gas industry.
With the HoA, SMJ could potentially acquire 50 per cent participation in the Samarang Production Sharing Contract (PSC), a producing asset encompassing key oil and gas hubs located about 50 kilometres offshore of Sabah.
“With the elevated and stable crude oil prices year-to-date, we opine that the upstream will remain operational for the year.
“While rig counts are not expected to rise in the short-to-mid-term, Petronas’ auction of its PSCs had seen positive responses from at least 500 vendors in the last three years,” the brokerage said.
Meanwhile, MIDF Research maintained its positive stance on Malaysia’s oil and gas industry, notably on its upstream subsector.
For the long term, the brokerage said its top pick would be Dialog Group Bhd, considering that the group had recently signed the Baram Junior Cluster Small Field Asset Production Sharing Contract with Petronas, for feasibility studies and subsequently the exploration/development of the Baram Field in Sarawak.
To date, the Sarawak Basin had produced over 160,000 barrels of oil per day and 4.0 billion standard cubic feet of gas, with an estimated unexplored prospect of 11.0 billion barrels of oil equivalent worth of hydrocarbon.
