Coastal Energy inks small risk service contract with Petronas (5071)

KUALA LUMPUR: Toronto-listed Coastal Energy Company will develop and
produce oil from three small fields offshore Peninsular Malaysia under
a small field risk service contract with Petroliam Nasional Bhd.
According
to Coastal Energy, it would focus on the Kapal, Banang and Meranti
cluster of small fields (KBM cluster) where 17 wells would be drilled
of which 10 would be at Kapal, four at Banang and three at Meranti.
The
KBM Cluster fields are within 20 kilometers of each other in a water
depth of 60 meters. The main oil reservoirs are Miocene aged sandstones
ranging in depths from 3,800 feet to 7,800 feet.
Under the
contract, Coastal is finalising an arrangement for a Malaysian company
to participate in the Small Field RSC for 30%-40% equity interest.
"Coastal
will provide the upfront development capital, undertaking the
development drilling and production of the KBM Cluster. Petronas will
remain the owner of the project," it said.
Costal expects would
be paid a remuneration fee based on key performance indicators
including the timely implementation of the agreed field development
plan and budget.
First oil from the Kapal field is scheduled
within one year followed by production from the Banang field a year
later. Coastal will develop the fields using mobile offshore production
units (MOPUs) and floating storage and offloading tankers.