PETRONAS and Shell Sign Heads of Agreement for New Enhanced Oil Recovery Production Sharing Contracts

The HOA will see staged work activities and new investments from Shell and its joint venture partner PETRONAS Carigali Sdn Bhd (PCSB), to extend the life and increase the recovery factor of the Baram Delta (BDO) and North Sabah fields.

The improvement in the recovery efficiency of the oil fields may result in an additional 90 to 100 kboe/d of oil production and extend the field life to beyond 2040.

Peter Voser, Shell’s CEO, said: “This new agreement confirms Shell’s commitment to continue investing in Malaysia and its position as a heartland for Shell. The agreement also provides an opportunity to work together with PETRONAS on building local knowledge and capabilities in enhanced oil recovery.”

Shell Malaysia Chairman Anuar Taib added, “This development will positively impact Malaysia’s oil reserves and benefit the country as a whole, adding further value to the country’s upstream oil and gas industry. Shell, as a long term partner in Malaysia’s progress, is pleased to be able to continue contributing towards the national aspiration to become a high-income economy.”

The new agreement will build upon the existing BDO and North Sabah production sharing contracts, located offshore Sarawak and Sabah, respectively.

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Notes to editors:

 PETRONAS Carigali holds a 60 percent equity interest in the BDO production sharing contract (expiry 2018) and is operator while Shell holds the remaining 40 percent interest. The North Sabah PSC (expiry 2019) is Shell operated with each company holding an equal 50 percent equity interest.

The projected increase in the average recovery factor in the BDO and North Sabah fields will see a rise from 36% to 50%, adding significant value to the upstream industry in Malaysia sustainably over the coming decades. The technology employed in the North Sabah fields could potentially lead to the first field-scale offshore Chemical EOR in the world. To date, Shell has participating interests in 14 PSCs in various offshore blocks in Sarawak and Sabah.

Peter Voser, Chief Executive Officer for Royal Dutch Shell PLC signed the agreement on behalf of Shell companies, witnessed by Malcolm Brinded, Executive Director, Upstream International, Royal Dutch Shell PLC. Dato’ Shamsul Azhar Abbas, President & CEO signed for PETRONAS;

Dato’ Wee Yiaw Hin, the Executive Vice President for Exploration and Production signed for Petronas Carigali; while Ramlan Abdul Malek, the Vice President, Exploration and Production Business, PETRONAS and Nooruddin Abdullah, Head of Legal for Exploration and Production were witness.

Also in attendance were Anuar Taib, Chairman Shell Malaysia and Managing Director of Shell’s upstream companies in Malaysia and Michiel Kool, Executive Vice President for Shell Upstream International, Asia Pacific.

Photo caption:

PETRONAS and Shell Sign Heads of Agreement for New Enhanced Oil Recovery Production Sharing Contracts

(seated, L-R): Dato’ Wee Yiaw Hin, Dato’ Shamsul Azhar Abbas, Peter Voser and Malcolm Brinded

(standing, L-R): Nooruddin Abdullah, Michiel Kool, Anuar Taib and Ramlan Abdul Malek

Enquiries:

Shell Malaysia Media Relations

Peing Tajang: tel: +6 03 2091 2161, email: peing.tajang@shell.com

Stephanie Khoo: tel: +6 03 2091 2115, email: stephanie.khoo@shell.com

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