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Oil and gas search in East Coast

Published on: Thursday, August 26, 2021

By: David Thien

KOTA KINABALU: Oil and gas exploration on and off Sabah’s east coast has started with the recent award of Sabah Block 405 (see red circle marked in map) to ConocoPhillips and Petronas Carigali.

This is set to bolster offshore exploration activities off the east coast of Sabah, according to O&G industry players, and deep-water ports like Lahad Datu are poised to benefit from more of such developments, if properly equipped with talents and facilities.

“The recent award of SB405 is expected to open up opportunities near East Coast Sabah,” said Ir. Mohamed Firouz Asnan, Petronas upstream business senior vice president for Malaysia petroleum management, in his presentation on “Oil and Gas in Sabah: Opportunities & Challenges” at the BIMP-EAGA Energy Online Conference & Exhibition, recently.

“Several blocks there offer further opportunities and East Coast Sabah would benefit from integrated development.”

He said the development of marginal resources in oil and gas exploration for the east coast of Sabah is considered challenging, as it is a frontier area with a lack of oil and gas infrastructure.


What is needed is low-cost, fit-for-purpose new technology for integrated upstream-downstream development, Ir. Mohamed Firouz said.

“Opportunities also exist in small fields which require niche operators with innovative solutions to monetise,” he said, noting that such fields require cost-efficiency and economies of scale as among the challenges besides limited data and limited pool of competent low-cost operators with strong financials.

For industry players, a broad range of opportunities await them, and for service providers, their cost competitiveness would be able to support more projects, growing the industry for shared success.

“Petronas continues to nurture a strong ecosystem to support the efforts to maximise the full potential of the oil and gas industry in Malaysia.”

Under Malaysia’s oil and gas bid round 2021, 13 exploration blocks bundled with six fields consisting of nine shallow water blocks and four deep water blocks comprising 98,269 square kilometres acreage are on offer to interested companies for bid submission on Sept 3.

“Sustainability is at the core of our strategy,” Ir. Mohamed Firouz stressed.

Meanwhile, nearby in the Sulu Sea and Mindanao Sea of the Philippines, the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) since August 20, 2019, had requested the Philippines’ Department of Energy to hold in abeyance the bidding of petroleum development agreements or PDAs in the Bangsamoro jurisdiction territories to provide for joint development on such fossil fuel resources in the region, according to Ricardo B. Dela Cruz.

He is the assistant director of the Energy Resource Development Bureau of the Philippines’ Department of Energy.


Ricardo presented his paper titled: “Philippine Oil and Gas Opportunities and Challenges” at the BIMP-EAGA Energy Online Conference & Exhibition on August 23.

“Processing of PDAs in the BARMM were held in abeyance subject to formulation of joint policies and guidelines for licensing of areas in the Bangsamoro Region through an intergovernmental Relations Body,” Ricardo B. Dela Cruz revealed.

In a graph, he showed that the

Philippines offers favourable fiscal terms to industry contractors between 35 per cent and 45 per cent of income post-

government cut and taxes compared to Malaysia’s 12 per cent to 15 per cent under Petronas’ production sharing contracts.


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