CHINA'S SINOPEC IN A CONSORTIUM TO DEVELOP MARGINAL OIL FIELD OFF TERENGGANU

KUALA LUMPUR, July 26 (Bernama) -- China' Sinopec Petroleum Services Corporation will be taking a major stake in a consortium to undertake the development of a Petronas' marginal oil field located off the coast of Terengganu which may require up to RM2.067 billion (US$697.156 million) in investment.

It will become part of a consortium to be formed by newly established Sabio Oil and Gas Sdn Bhd (SOG) and International Oil Design and Construction Sdn Bhd (IODC), a unit of ODCC Group of Iran which will be the main technology provider.

Sinopec will hold 40 per cent stake in the consortium, while SOG, a unit of Sabio Technology Bhd (STB), and IODC will have 30 per cent stake respectively.

Incorporated in November last year, STB has obtained the approval to list on Bursa Malaysia and soon will be issuing its public prospectus.

SOG, which was set up primarily to grab the opportunity from the national oil company, Petronas, hopes to seal the agreement with the latter soon, its
executive chairman, Ahmad Sukimi Ibrahim said Monday.

"We hope to secure more similar contracts in the future," he told reporters after the signing ceremony between SOG and IODC here, Monday, while representatives of Sinopec were unable to attend.

The ceremony was witnessed by Minister of International Trade and Industry, Mustapa Mohamed.

"About US$400 million to US$700 million will be required to develop the site, which is estimated to contain 30-50 million barrels of crude," he said, adding that SOG was the Bumiputera stakeholder in the consortium.

Malaysia has 106 marginal oil fields containing 580 million barrels of oil, with Petronas has firm plans to develop 25 per cent of the total marginal oil fields to replenish its oil reserves and generate revenue.

A marginal oil field can produce 30 million barrels of oil equivalent or less.

In January, national petroleum company Petronas awarded the first marginal field contract via a risk service contract method to a consortium that consistedof Kencana Petroleum Bhd, SapuraCrest Petroleum Bhd and Petrofac Energy Development Sdn Bhd to develop and produce petroleum source from Berantai field, off the coast of Terengganu.

The move to develop the marginal oil fields is part of the government's Economic Transformation Programme (ETP).
-- BERNAMA