Petronas and Brunei petroleum authorities sign agreements for mutual benefits

by **Cals** Mon 09 Dec 2013, 13:35

Business & Markets 2013

Written by Surin Murugiah of theedgemalaysia.com

Monday, 09 December 2013 12:13

KUALA LUMPUR (Dec 9): National oil firm Petroliam Nasional Bhd (Petronas) has signed several agreements with the Brunei petroleum authorities towards deepening mutually beneficial cooperation in the oil and gas industry between the two parties.
In a statement Monday, Petronas also said an MOU was signed by Malaysia Marine and Heavy Engineering, a unit of Petronas’ subsidiary MISC Bhd, with PB Services Sdn Bhd, a subsidiary of PetroleumBRUNEI, to explore the possibility of setting up a 30:70 joint venture to provide engineering and fabrication services.
Petronas said the agreements inked on Dec 8 in conjunction with the 17th Annual Malaysia- Brunei Leaders’ Consultation held in Bandar Seri Begawan, include the following:
• A Head of Agreement (HOA) towards formalising a unitisation arrangement for Malaysia’s Kinabalu West NAG field and Brunei’s Maharajalela North Panel field
• A Head of Agreement towards a provisional arrangement for joint development of Malaysia’s Gumusut/Kakap field and Brunei’s Geronggong/Jagus-East field
• Two Production Sharing Agreements (PSAs) awarded by PetroleumBRUNEI to Petronas Carigali Brunei Ltd and Shell Deepwater Borneo Ltd for Brunei’s offshore Blocks N and Q
• An agreement for PetroleumBRUNEI to acquire an interest in Petronas’ Canadian shale gas asset and in Petronas’ proposed Canadian LNG facility, as well as a share of the facility’s LNG production
It said the HOA to formalise the unitisation arrangement for the Kinabalu West NAG field and Maharajalela North Panel field was signed between Petronas and the National Unitisation Secretariat of Brunei Darussalam.
“The HOA paves the way for the two parties to resolve a number of issues relating to the unitisation and future development of these straddling fields,” it said.
Petronas and the National Unitisation Secretariat of Brunei Darussalam also signed another HOA to establish joint development parameters for the Gumusut/Kakap and Geronggong/Jagus-East fields based on a provisional production and cost sharing arrangement until a further agreement is reached on the status of the fields.
PetroleumBRUNEI, the national oil company of Brunei, has awarded Petronas Carigali Brunei and Shell Deepwater Borneo the PSAs for Blocks N and Q, which are located in the eastern shallow water areas offshore Brunei.
Petronas said the two partners had equal 50:50 equity interests in the two blocks, where Petronas Carigali Brunei is the operator of Block N while Shell Deepwater Brunei operates Block Q.
Petronas and its Canadian subsidiaries Progress Energy Canada Ltd and Pacific NorthWest LNG Ltd have also signed an agreement with PetroleumBRUNEI for the latter to acquire a 3% equity in Progress Energy Canada’s natural gas assets and in the proposed Pacific NorthWest LNG’s export facility.
“As part of the proposed transaction, PetroleumBRUNEI has agreed to buy a 3% share of the LNG facility's production for a minimum of 20 years,” said Petronas.
Petronas said it viewed agreements reached with the Brunei petroleum authorities as a positive step forward in strengthening its presence in Brunei and deepening its relationship with its Brunei counterpart for mutual future growth in Brunei, Malaysia and elsewhere.