Tuesday 3 April 2018

Hibiscus Petroleum Berhad announced that its indirect wholly owned subsidiary SEA Hibiscus Sdn Bhd has completed its acquisition of a 50% participating interest in the 2011 North Sabah Enhanced Oil Recovery Production Sharing Contract and the joint operating agreement in relation to the PSC.

To recap, SEA Hibiscus had, on 12 October 2016, entered into a conditional sale and purchase agreement with Sabah Shell Petroleum Company Limited and Shell Sabah Selatan Sdn Bhd (collectively “Shell”) to acquire Shell’s participating interests in the PSC between Petroliam Nasional Berhad (“PETRONAS”), Shell and PETRONAS Carigali Sdn Bhd (“PETRONAS Carigali”), and the JOA between Shell and PETRONAS Carigali for the total purchase consideration of US$25 million.

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 have been producing since 1979 and the PSC provides the Group with operatorship and production rights up to 2040.

Furthermore, 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 1 January 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 31 March 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.