KUALA LUMPUR (April 21): Petroliam Nasional Bhd (Petronas) has awarded the production sharing contract (PSC) for the South East Collins Cluster under the newly introduced small field asset (SFA) PSC terms to Vestigo Petroleum Sdn Bhd.

Petronas said in a statement that the South East Collins Cluster, located in water depths of 42 to 45 metres, 70km northeast of Labuan Island, comprises two fields — South East Collins and Lokan, which were discovered in the 1980s.

“With combined estimated recoverables of 10 million stock tank barrels (MMstb), the South East Collins Cluster is now primed for development under the new SFA PSC terms,” it said.

The PSC was signed today where the companies were respectively represented by Petronas senior vice president of Malaysia petroleum management Mohamed Firouz Asnan and Vestigo chief executive officer Hazanie Jamian.

Mohamed Firouz said the award of the cluster of fields under the much-anticipated new fiscal terms is expected to spur the development and production of more small fields in the future.

He added that the new SFA PSC is aimed at monetising an inventory of small discovered resource opportunities available in Malaysian waters.

According to him, Vestigo was chosen based on its track record as a low-cost operator in developing and operating small fields.

“We welcome operators who are specialised in the development of small fields to extend their capabilities here in Malaysia. For many of these fields to work, we need operators with the right mindset and business model to take advantage of the customised fiscal and non-fiscal terms offered by Petronas. Under the current volatile oil prices, these operators must also employ innovative solutions to ensure the lowest total life cycle cost,” he added.

Vestigo, a subsidiary of Petronas Carigali Sdn Bhd, currently operates the Irong Cluster PSC, SK315 PSC, PM335 PSC and the Tembikai Chenang small field risk sharing contract. In addition, it also holds non-operating interests in PM9 PSC and SK407 PSC.