SABAH ACQUIRES STRATEGIC 20 PERCENT STAKE IN NORTH SABAH EOR PSC

KOTA KINABALU, Feb 9 (Bernama) -- The Sabah government, through its wholly-owned entity SMJ Energy Sdn Bhd (SMJE), has solidified its position in the upstream oil and gas sector by acquiring a strategic 20 per cent participating interest in the North Sabah Enhanced Oil Recovery Production Sharing Contract (EOR PSC).

The acquisition followed the signing of a “farm-out agreement” (FOA) with PETRONAS Carigali Sdn Bhd (PCSB) at the Kuala Lumpur Convention Centre today, marking SMJE’s second major upstream investment after entering into the Samarang PSC in April 2023.

Chief Minister Datuk Seri Hajiji Noor said the initiative reflects the state government's long-term strategy to strengthen Sabah's energy sector through high-quality investments and close collaboration with PETRONAS. "With opportunities now expanding across the state from the west to the east coast, we welcome reputable investors to partner with us in ensuring sustainable and lasting benefits for the people of Sabah," he said in a statement after witnessing the exchange of documents in conjunction with the collaboration today.

PCSB was represented by its chief executive officer, Hazli Sham Kassim, while SMJE was represented by its CEO, Datuk Dr Dionysia Kibat.

The acquisition, effective last Jan 1, follows the Heads of Agreement (HoA) signed between SMJE and PCSB in November 2025, paving the way for today’s final transaction. 

Following the transaction, SMJE will hold a 20 per cent non-operating partner interest. SEA Hibiscus Sdn Bhd will continue as the operator with a 50 per cent participating interest, while PCSB retains the remaining 30 per cent.

The North Sabah EOR PSC asset comprises four producing oil fields located in shallow waters about 70 metres deep offshore Kota Belud. It includes 20 offshore platforms connected by a 143km, 24-inch pipeline that transports crude oil to the Labuan Crude Oil Terminal.

Deputy Chief Minister II Datuk Seri Masidi Manjun, also Sabah Finance Minister and SMJE chairman, described the asset as strategic, noting that the acquisition signals a maturing role for the state in upstream activities. "This move secures long-term value, builds commercial capability, and ensures more benefits flow directly to the people of Sabah," Masidi said, adding that SMJE continues to accelerate value creation through strategic partnerships and local participation.

The event also witnessed the exchange of documents for the Mutiara Cluster Heads of Agreement (HoA) between PETRONAS and Sabah Energy Corporation (SEC) to facilitate the cluster's development by the first quarter of 2029. Additionally, documents were exchanged for the Permata Cluster PSC between PETRONAS and Bridge Petroleum Limited, a newly appointed Petroleum Arrangement Contractor for the cluster located offshore Sabah.

-- BERNAMA