KUALA LUMPUR (Jan 13): SapuraOMV Upstream Sdn Bhd announced the first production from its Larak gas field under the SK408 production sharing contract (PSC) following the start-up at the end of December which was delivered within the budget.

In a statement today, it said the fields are tied back into an existing processing facility and gas is transported through existing pipelines for onward gas processing at the Petronas LNG complex in Bintulu, Sarawak.

SapuraOMV's partners under the SK408 PSC are Sarawak Shell Bhd (30%) and Petronas Carigali Sdn Bhd (30%).

The SK408 gas fields are a part of discoveries made by SapuraOMV in a drilling campaign in 2014 and is SapuraOMV's second major upstream gas development project in East Malaysia, following the successful development and commencement of production from the SK310 B15 gas field.

It said the development of SK408 aims to commercialise gas reserves from the Gorek, Larak and Bakong fields which will help meet the growing gas demand in Asia.

SapuraOMV chairman Tan Sri Shahril Shamsuddin said the achievement will strengthen the group's presence in the existing market, propelling SapuraOMV to become one of the most significant gas producers in the country and in the region.

"This will further cement our position as a trusted and reliable oil and gas company," he added.

Johann Pleininger, executive board member responsible for upstream and deputy chairman of OMV, said, "This production start is a positive signal and demonstrates OMV's commitment to the Asia-Pacific hub. It shows once more the strengthening of the gas focus in our production portfolio."

According to the statement, following the full ramp-up of the first phase of SK408, comprising the Gorek, Larak and Bakong fields, SapuraOMV's production is expected to increase to more than 30 kilobarrels of oil equivalent per day, with the majority being gas.

SapuraOMV is a strategic partnership between Sapura Energy Bhd and OMV Exploration & Production GmbH, a subsidiary of Austria's OMV Aktiengesellschaft.

Shares of Sapura Energy closed unchanged at 29 sen, with 48.34 million shares traded and a market capitalisation of RM4.63 billion.