Hibiscus Petroleum’s subsidiary SEA Hibiscus has completed its acquisition of a 50% participating interest in the 2011 North Sabah Enhanced Oil Recovery Production Sharing Contract (North Sabah PSC) and the joint operating agreement (JOA) in relation to the PSC.
To recap, SEA Hibiscus had, on October 12, 2016, entered into a conditional sale and purchase agreement (SPA) with Sabah Shell Petroleum Company Limited and Shell Sabah Selatan to acquire Shell’s participating interests in the PSC between Petronas, Shell and Petronas Carigali, and the JOA between Shell and Petronas Carigali for the total purchase consideration of $25 million.
The deal was subject primarily to obtaining regulatory approval of Petronas and its subsidiary Petronas Carigali, which Hibiscus obtained last December.
The North Sabah PSC includes 20 offshore platforms across four producing fields located in the South China Sea, off the west coast of Sabah, and the Labuan Crude Oil Terminal located in the Labuan Federal Territory, in Malaysia.
The fields, St Joseph, South Furious, SF 30, and Barton, have been producing since 1979 and the PSC provides the group with operatorship and production rights up to 2040.
Hibiscus Petroleum Chairman, En Zainul Rahim said, “The North Sabah PSC constitutes our second producing asset, providing Hibiscus with another revenue stream after the Anasuria Cluster. It is an exciting time for Hibiscus Petroleum as we expand and strengthen our technical and operating capabilities, profitability and balance sheet.”
The North Sabah PSC will significantly boost the group’s production and proven and probable reserves (2P Reserves). On a 100% PSC basis, the total oil production averaged approximately 14.6 kbbls/day in 2017, with 2P Reserves and contingent oil resources (2C Resources) as of January 1, 2018 at approximately 40.9 mmbbls and 79 mmbbls, respectively.
Having met all the conditions precedent under the SPA, the transfer of operatorship from Shell to SEA Hibiscus concluded on March 31, 2018 and SEA Hibiscus thereby assumed the role of operator of the North Sabah PSC. As operator, SEA Hibiscus will be responsible for the day-to-day operations and management of the work activities of the assets within the North Sabah PSC.
Dr Pascal Hos, Chief Executive Officer of SEA Hibiscus, said: “Whilst we are excited to develop the opportunities that have been identified to realize the considerable potential within the North Sabah PSC fields, our focus will be to improve the performance of the asset in a safe and environmentally responsible manner.”