Talisman-Petronas to inherit Malaysia Kinabalu oil fields

Petroleum Nasional Bhd. will assign operatorship of the Kinabalu oil fields offshore Sabah at the end of 2012 to a combine of Talisman Malaysia Ltd. and Petronas Carigali Sdn. Bhd., who will invest more than $1 billion on production and enhanced oil recovery.

Alan Petzet

May 29, 2012

A production-sharing contract with current operator Shell expires in late December, and a new one will be signed that gives Talisman 60% interest and Petronas Carigali 40%.

The mature Kinabalu Main, Kinabalu East, and Kinabalu Far East fields have "significant development upside," Talisman said without giving figures. The PSC is adjacent to the Talisman-operated Sabah exploration block.

Talisman said the agreement is the first of a new "progressive volume-based" PSC to be awarded by Petronas that was specifically designed to incentivize contractors to improve oil recovery and increase production from mature oil fields.

About the Author

Alan Petzet

Chief Editor Exploration

Alan Petzet is Chief Editor-Exploration of Oil & Gas Journal in Houston. He is editor of the Weekly E&D Newsletter, emailed to OGJ subscribers, and a regular contributor to the OGJ Online subscriber website.

Petzet joined OGJ in 1981 after 13 years in the Tulsa World business-oil department. He was named OGJ Exploration Editor in 1990. A native of Tulsa, he has a BA in journalism from the University of Tulsa.