As reported by The Borneo Post, Petroliam Nasional Bhd (Petronas) has announced plans including the development of enhanced oil recovery (EOR) costing RM46 billion as part of its comprehensive RM300 billion capital expenditure (capex), affirming its commitment to catalyse productivity in the industry.
According to Petronas, the capex was boosted in part to venture into more challenging and green field projects such as EOR, deep-water and unconventional hydrocarbons.
The focus on EOR was brought about by declining output at mature oil fields, where the average recovery factor was only about half the 46 per cent average.
HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) analyst Quah He Wei remarked, “Since 2010, Petronas has made sustainable oil production a priority because of shrinking hydrocarbon reserves locally and abroad.
“Malaysia and Brunei are now the only remaining oil net exporting countries in Southeast Asia. Increasing consumption has been seen across the region and oil production has been falling in the region as a whole.
“Petronas has geared up its exploration and production activities to meet increasing demand. It has plans to implement EOR technology programmes that focus on water alternating gas EOR and chemical EOR at its fields in Malaysia such as Angsi andDulang.”
Four key contracts were awarded to MMC Oil & Gas Engineering Sdn Bhd, Ranhill Worley, Technip and Aker Solutions for the Sumandak, Dulang, Tapis and Bokor oil fields.
Following the announcement of the RM10 billion ExxonMobil Tapis EOR project in January 2011, Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) was recently awarded the RM1.5 billion central processing platform fabrication contract.
Quah expected more contracts from six other fields (Seligi, Guntong, Semangkok, Irong Barat, Tabu and Palas) that were part of the deal announced by ExxonMobil and Petronas.
Meanwhile, Royal Dutch Shell (Shell) signed US$12 billion heads of agreement with Petronas last November for two 30-year production sharing contracts (PSC) for EOR projects off East Malaysia. Both parties aimed to increase recovery factor at the North Sea and Baram Delta fields from 36 to 50 per cent, and extend field life to beyond 2014.
The Baram Delta EOR project covered Bokor, Bakau, Baram, Baronia, Betty, Fairley Baram, Siwa, Tukau and West Lutong oil fields. When combined with the North Sabah EOR development comprising the St. Joseph, South Furious, SF30 and Barton fields, these development opportunities could be the largest offshore EOR project in the world, according to Shell.