KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) has discovered oil in its Tembikai field off Terengganu, which is being developed and operated by Vestigo Petroleum Sdn Bhd, a wholly-owned subsidiary of Petronas Carigali Sdn Bhd.

Petronas awarded the Tembikai-Chenang cluster to Vestigo Petroleum in October 2013 under the small field risk service contract (RSC).

The field, in a water depth of 70m, marks the fourth RSC which has successfully achieved first production after the Kapal-Banang-Meranti (KBM) cluster, Balai cluster and Berantai RSCs.

“Tembikai is the first small field RSC that has been successfully executed by a Petronas Carigali’s wholly-owned subsidiary. This achievement marks another milestone for Petronas in its journey to monetise and add value to small and stranded oilfields despite the challenges currently faced by the industry,” Petronas vice-president of Malaysia petroleum management Muhammad Zamri Jusoh said in a statement yesterday.

The scope of the Tembikai oil project includes the installation of a central processing platform connected to a floating storage and offloading vessel via a flexible subsea pipeline.

Vestigo Petroleum chief executive officer Keith Collins said the company has managed to deliver the project within budget and ahead of schedule.

Currently, Tembikai production is only from one well and two more production wells are now being drilled. Upon completion, the three wells are expected to achieve peak production of about 2,000 barrels of oil per day.

Apart from Tembikai, Petronas has five other RSCs, namely Berantai, Balai cluster, KBM cluster, Tanjong Baram and Ophir. Berantai and KBM are currently in production while Ophir, being the latest RSC awarded, is in the early stages of development.

This article first appeared in The Edge Financial Daily, on July 15, 2015.