KUALA LUMPUR (April 22): Petroliam Nasional Bhd (Petronas) has signed a production sharing contract (PSC) with its new investor SK earthon Co Ltd and Sarawak-owned oil and gas company Petroleum Sarawak Exploration & Production Sdn Bhd (PSEP) for Block SK247 off the coast of Sarawak.

Block SK427 is located within the prolific area of Balingian and Tatau hydrocarbon provinces covering an area of 3,349 sq km, according to Petronas in a statement on Friday (April 22). 

“The block is situated in a proven hydrocarbon system and has promising hydrocarbon potential to be unlocked. Several significant hydrocarbon discoveries were made in 2021 in the Balingian province near the block, namely Sirung-1 and Hadrah-1 wells,” Petronas said. 

SK earthon, a wholly-owned subsidiary of South Korean company SK Innovation Co Ltd, is the operator of unit SK427 with an 85% stake, while PSEP holds the remaining 15%. 

Petronas senior vice president of Malaysia petroleum management Mohamed Firouz Asnan said SK427 PSC is one of the six blocks awarded in Malaysia's 2021 bidding round. 

This demonstrates the country's potential as an attractive investment destination for companies looking to expand their energy portfolio and thrive in the energy transition, he said. 

“We welcome SK earthon to Malaysia’s upstream industry and as a new player, they bring vast experience in exploration and production, garnered from their worldwide exploration activities. Petronas will also collaborate with SK earthon in the Carbon Capture and Storage sector, in line with Petronas’ aspiration to achieve Net Zero Carbon Emissions by 2050.

“Under our ‘right asset, right player’ strategy supported by a progressive fiscal regime, we hope to fully maximise the long-term value of the nation’s hydrocarbon resources,” Mohamed Firouz added.