JX Nippon Oil & Gas Exploration announces production sharing contract for deepwater block 2F, offshore Sarawak, Malaysia

Friday, Sep 20, 2013

JX Nippon Oil & Gas Exploration Corporation (President: Mr. Shigeo Hirai) is pleased to announce that JX Nippon Oil & Gas Exploration Corporation has entered into a Production Sharing Contract (PSC) for Deepwater Block 2F, Sarawak with PETROLIAM NASIONAL BERHAD (“PETRONAS”), the national oil company of Malaysia, through its subsidiary, JX Nippon Oil & Gas Exploration (Offshore Malaysia) Sdn. Bhd. (President: Mr. Hironori Wasada) to be effective from September 19, 2013.

Deepwater Block 2F is located in the northwest of Sarawak, with approximately 5,500 square kilometres surface area and 100-1,200 meters water depth. JX Nippon Oil & Gas Exploration (Offshore Malaysia) Sdn. Bhd. holds 40% Participating Interest and will conduct exploration activity as the operator at Deepwater Block 2F.

Deepwater Block 2F is our 6th project (and 4th project as operator) in Malaysia.

In Malaysia, we are operator for Block SK10, offshore Sarawak which is now in the 10th year of gas production and studying further development. We are also the operator carrying out exploration activities in Block SK333 onshore Sarawak and Deepwater Block R offshore Sabah. In Block SK333, accumulation of oil and gas were confirmed at Adong Kecil West-1 well which was drilled in 2012 and we are currently conducting detailed reserves evaluation. In addition, we are participating as non-operator in gas production activities in Block SK8 and also as non-operator in exploration activities in Block PM308A offshore Peninsular Malaysia.

We consider Malaysia as one of our important core countries and will seek to increase our activities and presence in Malaysia.

Source: JX Nippon Oil & Gas Exploration

Lundin Malaysia’s Bertam Oil development

Petronas has approved the Bertam oil field development plan for Lundin Malaysia BV, the first Lundin-operated development project in Malaysia.

The development plan, which Lundin Malaysia submitted in July, looks toward drilling in 2014 and a production start in 2015. Proved and probable reserves total 17 million bbl of oil, and peak production is pegged at 15,000 b/d.

Lundin Malaysia will develop Bertam using a 20-slot wellhead platform in 76 m of water on the 6,126 sq km PM 307 block adjacent to a spread-moored floating production, storage, and offloading vessel. The subsurface development concept consists of 14 horizontal production wells completed with electric submersible pumps.

Gross capital investment associated with the development is $400 million excluding costs related to the FPSO. Working interests are Lundin Malaysia 75% and Petronas Carigali 25%.

News Source : http://www.ogj.com/articles/2013/10/petronas-okays-lundin-malaysia-s-bertam-oil-development.html

Oil Country Tubular Goods (OCTG)

OCTG refers mainly to casing and tubing but also can refer to line pipe and other pipe used in producing or transporting gas and oil. Casing is the pipe that is used while drilling the well. It is placed in the well, cemented in place, and is what keeps the hole from sloughing in while drilling or producing.

Picture  Source : http://www.aogr.com

It “cases” the open hole. It comes in sizes ranging from 30” to 3 ½” in diameter. Usually several “strings” of casing are using in each well. Tubing is the pipe that is inserted in the well during well completion operations. This is the pipe by which the oil and gas flows to the surface. It is frequently removed from a well during workover or completion operations.

Tubing comes in sizes from 4 ½” to 1 ½” diameter. Casing and tubing each use special connectors in order to screw the joints together. These connectors are called connections and come in all types of sizes and thread profiles depending on the intended use.

Picture source : http://www.imoa.info

A joint of tubing or casing is made up of the “tube” and the “connection.” Connections are sometimes separate items called couplings or they can be integral or a part of the tube. Again, the intended use dictates that type of connection. Line pipe is a separate type of tube from tubing and casing. Line pipe is what makes up a pipeline. Pieces are connected together by welding. Line pipe is less expensive and less rigorously used than tubing or casing. Companies that manufacture these items are Tenaris, Vallourec, Sumitomo Steel, JFE  and others.

Malaysia Oil and Gas Feilds

Following are maps / illustration of Malaysia Oil and gas blocks :

Sources : http://investvine.com/malaysian-oil-and-gas-sector-to-keep-bullish-trend/

Supply Base In Malaysia

Following are two major supply base at Malaysia that has been supporting offshore drilling operation ever since. Both  supply bases is a fully integrated logistics hub tailored to the requirements of the Oil and Gas exploration, development and production activities in this region.

1. Asian Supply Base (ASB)

• ASB situated at Ranca-Ranca Industrial Estate, Labuan Island - the base sprawls across more than 345 acres of developed land areas.

          http://www.asiansupplybase.com/

2. Kemaman Supply Base (KSB)

• Loacated at Kemaman, Terengganu State. Kemaman Supply Base (KSB) which provides supply base services specifically catered to the oil & gas offshore industry in West Malaysia. KSB are wholly owned by EPIC Group.

          http://www.epicgroup.com.my/

Introduction to Malaysia Oil and Gas

Who spark Oil and Gas industry in Malaysia?

PETRONAS was not the first company to extract oil or gas in Malaysia. It was Royal Dutch Shell that began the oil exploration in Sarawak, then under the White Rajahs, at the end of the 19th century. In 1910, the first oil well was drilled in Miri, Sarawak. This became the first oil producing well known as the Grand Old Lady. Shell was still the only oil company in the area in 1963, when the Federation of Malaya, having achieved independence from Britain six years before, united with Sarawak and Sabah, both on the island of Borneo, and became Malaysia. The authorities in the two new states retained their links with Royal Dutch Shell, which brought Malaysia's first offshore oil field onstream in 1968.

Meanwhile, the federal government turned to Esso, Continental Oil, and Mobil, licensing exploration off the state of Terengganu, in the Malay Peninsula, the most populous region and the focus of federal power. By 1974, however, only Esso was still in the area. It made its first discoveries of natural gas in that year and then rapidly made Terengganu a bigger producer of oil than either Sarawak or Sabah. By 1974, Malaysia's output of crude oil stood at about 81,000 barrels per day (12,900 m³/d).

The Government of Malaysia contributes significantly towards policy and macro-economic planning to secure a sustainable and long-term success of the oil and gas industry. The Government’s main objective is to increase aggregate production capacity by five per cent every year up to 2020 to meet domestic demand growth while sustaining crude oil and LNG exports to overseas markets. In the Asia Pacific region, Malaysia aims to be the number one oil and gas hub by 2017, taking advantage of its strategic location at key shipping lanes as well as strong economic fundamentals in China, India and within Southeast Asia.

In Malaysia, energy policy for the upstream sector is determined by the Economic Planning Unit (EPU) and the Implementation and Coordination Unit (ICU), both of which reports directly to the Prime Minister. The Government focuses on efforts to enhance output from existing oil and gas fields, new marginal fields as well as exploration and development opportunities in deep-water areas. To this end, new tax and investment incentives under Petroleum Income Tax Act (PITA) were introduced in 2010 to promote oil and gas exploration activities.