Publication Source: Upstream Online
Sapura Exploration & Production is the quiet achiever of the Malaysian upstream sector, staying out of the spotlight while it progresses its plan to become a major gas producer.
The company's low-profile approach is partly due to the fact it is a division of the large integrated services company Sapura Energy (formerly SapuraKencana Petroleum), which itself prefers to avoid the limelight.
Before the group completed the acquisition in early 2014 of Newfield Exploration’s Malaysian business, its exploration and production division was insignificant.
However, the injection of the former Newfield assets added serious heft in the shape of producing fields, exploration licences and, significantly, a large volume of discovered undeveloped gas off Sarawak.
Maiden development
For the past three years, Sapura E&P has continued producing oil and gas at the East Piatu and East Belumut fields off Peninsular Malaysia, drilled new gas discoveries off Sarawak, and progressed its maiden field development — the B15 gas project in Block SK 310, which is due on stream in October 2017 at peak output of 100 million cubic feet per day of gas.
The industry downturn scuppered some of its growth plans — namely, the acquisition of a suite of assets in Vietnam from Petronas, and the addition of marginal field developments.
Its exploration successes off Sarawak have lifted its total net reserves and resources to about 243 million barrels of oil equivalent, and the company is hoping that by 2022 it could be producing a gross volume of between 800 MMcfd and 900 MMcfd, making it a major Malaysian gas producer.
Its portfolio of gas off Sarawak is central to this growth.
Block SK 408 contains seven discoveries from eight wells drilled. Five of the seven are understood to be commercial, and three are in the development stage – Gorek, Larak and Bakong, which have resource sizes ranging from 0.5 Tcf to 1.5 Tcf. Sources say talks for gas sales agreements will take place this year before moving into a field development which is a likely tie back to Shell’s F6 platform, with a projected start up in late 2019 or early 2020.
Jewel in crown
The jewel in the crown in Block SK 408 is the 2016 Jerun gas discovery, which contains up to 3 Tcf.
First gas from Jerun is targeted in about 2022, while the B14 discovery in Block SK 410 is the last cab off the rank given the high hydrogen sulfide volumes in the reservoir, say sources.
In the coming year, Sapura E&P plans to drill 11 wells — seven are infill wells at the West & East Belumut fields; one is the B15 development well; and three are exploration wells in SK 408.
The jack-up drilling rig Ensco 106 is already working for Sapura E&P on a five-well contract that began in March, and it is understood another jack-up will be hired for the remainder of the Kuala Lumpur-based operator’s 11-well campaign.
All of the company's Sarawak gas will be supplied to the Bintulu LNG facility in Sarawak.
The company currently has operator and non-operator interests in nine production sharing contracts including three permits off Sarawak and two onshore Sabah; its deep-water permit off Sabah was dropped about one year ago. Malaysian securities firm TA Securities says Sapura Energy is still keen to acquire new oil and gas assets.
Beneficiary
“We are positive on this, given that it benefits Sapura’s internal EPCIC fleet.
Recall that the latter is a key beneficiary of jobs dished out by the E&P segment via open tender,” says TA.
Indeed, Sapura Energy’s engineering and construction division is tasked with the fabrication, transportation and installation of the B15 production platform and 35-kilometre subsea pipeline, which it will no doubt perform quietly and effectively.